Creating your Value Proposition
Introduction by Company Connecting
Mark Gillanders of Kingman Lennox is the author of 'Creating the Value Proposition'. The article complements our current series on the startup phase of a company. Much has been written about ‘The Value Proposition’. Two of the books which are part of the Strategyzer series are an excellent introduction: ‘Business Model Generation', and ‘Value Proposition Design’ (authored by Alexander Osterwalder & Yves Pigneur). These books are used by business accelerators such as Highlands & Islands Enterprise Pathfinder.
Mark’s article explains the Value Proposition in a down to earth manner and provides a link to a ‘Value Proposition Builder’ which you can download. He has used his own company as an example in building up the value proposition.
It’s a useful read for any IT company (or any company), and food for thought in developing your own Value Proposition.
The problem with the term value proposition is that it means different things to different people. Mostly however it is thought to mean a benefits statement or USP's. Googling ‘how to develop a value proposition’ gives a myriad of views and perspectives, many of which contradict one another. The purpose of this article is not to say that this is absolutely the right way to develop a value proposition, moreover it’s a way that I have found actually works without being overly complex.
So, in its simplest terms a value proposition is a statement that explains what benefits you provide, for whom and how you are different (and better than) alternatives.
Creating the Value Proposition by Mark GIllanders
For young and more established businesses alike one of the most important things that you need to do is develop your value proposition. The value proposition is an essential component in defining and directing your sales and marketing strategy and tactics, and some time should be devoted to getting this right.
However, the value you deliver to customers cannot be defined by benefits alone – it also has to take into account costs. Therefore, Value Delivered = Benefits minus Cost.
In developing your value proposition, you need to consider the following elements:
Your Target Market - Who you are selling to or want to sell to
Your Offerings – The product / services you are selling to each market sector
Benefits – How your products / services deliver clear customer value
Value Experience – The benefits minus cost, as perceived by the customer
Alternatives – How you are different from and better than the alternatives
Proof – Substantiated evidence and credibility of your offering
The first step is to define each of these elements in writing. To make this easy I have uploaded a template that we used to develop our own value proposition at Kingman Lennox. I have left in the contents of our own workings as a guideline and something for you to work with. However, it’s essential that you work through this thoroughly in order that you don't end up with glib statements that are not based upon true value within your competitive environment. You can download the document at the link here
Having done this ourselves I found that it was a little more challenging than I'd expected to get it right, but the experience was certainly invaluable in ensuring consistency and maximum impact in terms of sales messages.
By working through this template it will give you the building blocks that you need to develop an overall value proposition for your business. However, given that many of us are selling into a variety of sectors and targeting a number of specific individuals/functions within target organisations then to have real impact we need to adapt the value proposition relative to the specific needs and challenges of that sector and for the function that you are addressing.
For example, in our case the overall value proposition is “We work with ambitious SMEs and corporates helping them to achieve their ambitions by ensuring that they have the very best sales talent, performing to full potential. Unlike generalist recruitment agencies, we have a deep understanding of effective sales people, processes and practices, ensuring that we get it right first time, every time.”
The value proposition would typically be used on the company website, marketing and promotional material and possibly stationary. In other situations - for example in person, in a proposal or specific sales communication you would want to fully tailor the message to the recipient. That could look something like:
“Based on our experience (in doing what generally) we have the ability to (contribute what specifically) resulting in (what business improvement) for (customer).
Please go ahead and download the template and work through developing (or refining) your own value proposition, I’m sure that you’ll find it worthwhile.
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"Creating your Value Proposition" First published on Company Connecting