Most companies when considering the value they offer to the marketplace only consider the value that their customers or buyers receive. Your company‘s value proposition is actually a two part function. One, is how buyers evaluate your product/service and two, how non-buyers evaluate your product/service offering. If you lack the understanding of how non-buyers rate your value, or expanding that though to your competitor’s value proposition, you are fooling yourself. The object of your focus should be the market, since this is where you compete.
In the book, Dominating Markets with Value the authors compare this thought to a general about to engage the enemy. The general must not only understand how his/her troops are deployed and but must know where or in what strength the enemy is deployed. They say that many corporate “generals” engage in this very practice. Value is a relative concept. It has no real meaning when measured within a vacuum.
The authors go on to state:
Your value proposition means nothing unless it is compared to that of your competition. It is not unlike an ROA figure for a company. That ROA is useful when you can compare it to another company or an industry average. Suppose that your value score is a 7 on a 10-point scale. Is this good? Does it give you the kind of leverage that will allow you to increase your market share or your ROI? The answer is, of course, that you don‘t know. Again, you don‘t know unless you have something to compare it to. Value is relative!
Many companies are used to the practice of soliciting information from their customers and even asking lost customers. However to expand the marketplace for your products you must forego the practice of looking inward at your own customers and start receiving the opinions and attitudes of those buyers who are not customers. This comparative perspective is extremely important. Your growth in the marketplace requires the addition of new customers; those just entering the market or those that must be won from competitors. Knowledge about how these buyers view your value proposition is not only necessary, but essential.
Related eBooks:
Dominating Markets with Value
Best in Market
Related Posts:
If you want to become Best in Market, What do you do?
The Importance of the Value Proposition – Rackham
Lean your Marketing by Dominating with Customer Value :
Unclear Customer Value leads to Failure :
Get Bill Waddell’s opinion of the Value Proposition, good add on to this post. http://bit.ly/ayPDlu