Doug Wendt is a co-founder and senior partner with Wendt Partners.
Business leaders today are constantly operating in the middle of two extremes. On the one side are all of the tactical demands of the business — tasks, issues, crises and other things that just have to get done. On the other side are all of the strategic demands - the ideas, concepts, strategies, messages and models that are essential to the future of your company. Some CEOs focus too much on the tactical side (working in the business but never on it), and others get wrapped up in strategic thinking but lose sight of day-to-day execution priorities.
Value proposition development is a process that helps you connect these two worlds, so that your tactics mirror your strategy and your strategy supports your tactics. The key is understanding how to think about and formulate your value proposition.
Your value proposition means establishing a business case for the value that your company will uniquely deliver to its target market — value that customers cannot get from anyone else.
Five Ways to Deliver Value
There are five ways in which you can deliver value to your customers:
- Economic Value - Providing a financial value to the customer (lower price, higher ROI).
- Transformative Value - Positioning the customer for success through your product/service.
- Transactional Value - Saving the customer time, resources or effort.
- Emotional Value - Leaving the customer with a greater sense of satisfaction.
- Intrinsic Value - Supporting the customer's own beliefs or vision through your offerings.
Considering Your Competitive Position
In addition, your value proposition should consider and respond to a number of factors, chief among them your competitors and their positions in the market. In order to develop a powerful value proposition, you need to select and commit to a definite (and defensible) spot on the map — a place where you can offer better, faster or different solutions in comparison to the other key players in the space.
To develop your value proposition, then, you need to keep one eye on your customers (and how you can deliver value to them across the five categories), and another eye on your competitors (and how you can mark out a position on the playing field that is unique and supports the value of your offerings).
Developing a Clear Message
Once you have identified and made decisions regarding those two points, then you need to organize your findings by developing a clear message. Your value proposition should be general enough that customers can understand it in non-technical terms, and specific enough that you can benchmark key areas of your business in light of the specific values you promise to deliver.
The results of the value proposition development process provide a solid basis for improving your sales and marketing efforts while also benchmarking internal operations against the values that are essential to your customers.
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