As regular readers of this blog will know, I am a purist when it comes to the use of the term “value proposition” and consider it to be second only to “solution” as one of the most frequently abused terms in the marketing lexicon.
Just as I require a “solution” to be defined in terms of the specific customer problem it solves, so I require a “value proposition” to be described in terms of the specific currencies in which the benefits will be received by the intended customer.
The good news is that there are a finite number of currencies in which benefits can be delivered:
- Technical performance
- Convenient to access
- Ease of use
- Time saving
- Reduction in stress
- Contribution to social status
This may not be an exhaustive list. I would welcome any suggestions for other “currencies” that should be included.
Most companies tend to focus on the first two items – largely because they are the ones that lend themselves to absolute claims (“we are the fastest/largest/most popular…” or “we will not be beaten on price”) and do not require being related to the customer’s context. But we have found that, more often than not, the majority of the value received by the customer comes from how well a product or service fits their specific context and needs. The absolute level of the capabilities of the machinery or technology matters less than how well those capabilities can be used to address a specific problem. If items 1 and 2 on the list above are about the “what” then items 3, 4 and 5 are more about the “how” – the adaptation of the capabilities to fit the needs and circumstance of the customer.
But we have found that there are three further currencies that contribute to a value proposition, even if they are not as frequently discussed in business circles. Given the nature of their jobs and personalities, senior decision makers are always appreciative of solutions that reduce the demands on their time, decrease the level of uncertainty and/or other forms of stress, and protect/build their professional reputations. And it is often on these dimensions that a B2B supplier will be truly able to make a promise of distinctive value.