Every organization has a competitive value proposition. Do you know what your organization’s value proposition is?
In 2010-2011, the value proposition has become very important. So, what is a value proposition and why do we bother addressing it?
Definition: The proposition is primarily the underlying reason(s) why your stakeholders desire to do business with your organization rather than with your competition. It describes what your organization offers in terms of tangible benefits and results so that it attracts attention to create a desire to learn more. It is part marketing, operations, strategy and consumer perceptions/ expectations on conscious and subconscious levels.
The proposition must convince a potential stakeholder that one particular product, service or brand will provide better added-value to fill a need or solve a problem than other competitors.
It evokes a powerful emotion that validates and reinforces the stakeholder’s unmet need. It should create a perception and expectation that the unmet need will be completely satisfied. The ideal value proposition is short, precise, customer-focused and appeals to the stakeholders’ strongest decision-making drivers.
It is the sum of all benefit(s) and product, service and brand differentiation with perceived value in the customers' mind. Remember that most purchase decisions are based upon perceived value. Perceived value is the trade-off between the quality of the most desirable benefits and the price paid for those benefits by the consumer.
It becomes embedded into the stakeholder’s mind and represents the full range of market positioning of the brand. Positioning describes market differentiation and makes comparisons. A value proposition is unique that it must also create stakeholder demand, desire and a stimulus for action on an urgent level. The value proposition represents and incorporates the full market positioning into a specific offer for the stakeholder.
If you are going to effectively manage this value proposition, then the first step has to be learning how your targeted customers define value. In other words, what are those quality drivers and surrogates and which ones are the most important?
The second step must define how the stakeholder view the trade-off between quality and price and the level of importance of one over the other?
The third step is to better understand how those targeted stakeholders perceive the value your products, services and brands offer relative to the value to what they can receive from your competitors. It must be remembered that “value” perceptions are comparative assessments and this becomes your value proposition.
Remember that the primary outcome to managing your value proposition is to generate profitable increases in market share and ROI. The value proposition must attract new stakeholders while simultaneously enhancing the retention and loyalty of existing cutomers / clients. Besides these basic outcome objectives, a quality value proposition contributes to enhancing mission and goal creation, targeting, branding, strategies/ tactics, integrated communications and the overall cost-effectiveness of the marketing plan.
Developing a great value proposition requires constant attention and customization to the uniqueness of the organization, its marketplace and stakeholders. For example, the following value proposition for a marketing consulting firm is a good first attempt. It can be improved over time but the positives are that it focuses on the customer, the customer’s objectives and the differentiation attributes are specific and “offer value”.
EXAMPLE:
One of XYZ Consulting’s primary objectives is to exceed expectations, satisfy marketing consulting needs and reach your goals. From innovative and cutting-edge services that accelerate the marketing planning process to cutting-edge technology that provides you with the more cost-effective way to market, we're committed to enhancing your ability to be a market leader and succeed.
The firm’s core competencies are centered on strong leadership, a hands-on approach, extensive experience, excellent customer service and engagement and a dedicated focus on quality and a striving for a positive return-on-investment. These abilities allow the client’s leaders to leverage their time and focus their efforts on strategic and business development activities.
Our clients expand their businesses by a minimum of 25-50% over a two-year period that allows for a well-balanced personal and professional lifestyle.
These outstanding core competencies and results combine to offer outstanding added-value for our clients. Our ultimate goal is to enhance your likelihood of success and lower the risk for potential failure with your strategic marketing endeavors.
