Do you know your business’s value proposition for your customers? Do your employees understand your value proposition, and their integral part in delivering that value to your customers? From my experience, companies whose value proposition emanates from their services and their employees are those that win market share and customer loyalty. According to Wikipedia, Customer Value Proposition can be defined as follows:
A customer value proposition is a promise of potential value that a business delivers to its customers and in essence is the reason why a customer would choose to engage with the business.
This seems pretty simple and straightforward, so why do so many companies get it wrong? I believe it’s because businesses try to develop their value proposition after the fact. They have a great idea for a new solution, often something that would solve a problem for themselves or someone they know. They develop the solution, sell it to their friends, and then finally, try to develop a succinct value proposition that they can use to communicate to a broader customer base. In my experience, this is far too late in the game, opening the business to market confusion and competition when instead they should be riding the tides of their early advantage.
Developing a clearly articulated value proposition is just as important as designing a great solution
There is another problem with this approach and it has to do with whose job it is to build the customer value proposition. Often, the customer value proposition becomes a task for marketing to figure out, while delivering the message belongs to sales. The feeling is that the solution should “sell itself” (it sold itself to the founder’s friends, right?) and all the sales team needs to do is collect the orders. I can remember being in this position for a startup business I helped launch. We were flush from our first sales and had grown a business development team that included marketing and sales. The pressure was on to grow quickly. The marketing team felt that since the first solutions had sold themselves, all sales needed to do was show it to potential customers. So marketing focused on demonstration and events to garner exposure to the solution. But as it turned out the sales team didn’t clearly understand the value proposition because it remained trapped in the founder’s head, and therefore they struggled with getting potential customers to come to a demonstration. My key learning from this experience is that developing and conveying a clearly articulated value proposition is just as important as designing a great solution.
Developing Your Customer Value Proposition
In our last post we discussed developing a mock press release to articulate a future vision for a business. A key part of that press release is the customer value proposition. This is the founding business team’s opportunity to put a stake in the ground, a goal for the value they want to deliver to their customers. It showcases how the components of their solution will solve key pain points that customers encounter as they work to complete the job they have hired your company to help them with. Alex Osterwalder developed this customer value proposition canvas to help you develop your value prop. I have created a fillable excel version that you can download here. As you work through this, here are some things to keep in mind:
- Start from the right, on the task or job the customer is attempting to complete. If you have created a journey map for your customer, you should have a pretty good idea of the gains (highs) and pains (lows) they encounter on that journey.
- Capture the pains and gains that your solution will contribute to, but also think about the ecosystem of solutions they might use. You can strengthen your value proposition by showing them a complete path for their journey, even if some of the solutions are DIY or from different providers.
- Next capture the products and services you provide. Articulate these from the view of the customer – e.g. you may call the product a drill but the customer views it as a tool to help them create holes. This is especially important at this visionary stage as it gives your team the freedom to innovate better ways of solving the customer’s problem.
- Last, fill in the features of the solution that will create the gains or relieve the pains of your customer. This is the heart of your value proposition, clearly aligning how your solution is the best fit for helping your customers complete their job.
Developing Your Business Wings
This exercise is extremely valuable for providing focus for you in developing a solution that clearly solves a customer problem. This article at Duct Tape Marketing provides different angles you can take with your value proposition. Choosing one (or more) of these angles will help you think more broadly about the business value proposition that best suits your customer value proposition. Of course the bigger gain from this exercise occurs when you share this value proposition with your team. They will clearly understand your vision for customer value and this transparency can empower them to bring their best ideas for how to deliver this value to the table. This will harness the power of innovation that lives in each of your employees. And it will give your business wings.
2 Responses
Comments are closed.