Step 4: Value Proposition

Step 4: State the Value Proposition that was used in acquiring this customer

Cindy Barnes the author of Creating and Delivering Your Value Proposition says, “One of the outputs of the VPP is a set of messages that can be used for internal and external communication. So a value proposition statement is a clear, compelling and credible expression of the experience that a customer will receive from a supplier’s measurably value-creating offering. It is not a description of what your organization does for a customer.”

It’s about the facility or experience delivered, not the details of the product or offering. A value proposition is not about ‘us’ – our cleverness, our needs, our expectations, the bells and whistles of our offering. Rather it is about the customer’s experience of our offering in terms of his or her needs and wants.

Understood and applied properly, a value proposition is a powerful tool to help you determine your capability to succeed. Value propositions work because they force focus. The struggle is important: it’s the tool that helps you focus and get the business.

She goes on to say, “ Value proposition thinking is at the heart of any value-focused organization. It sharpens the way organizations work by focusing activity so as to serve customers profitably. Note the use of ‘profitably.

I use JTBD thinking in my interviews and developing a value proposition. I find having a strong value proposition and precise value statements when you are calling or emailing is imperative. It is one thing having this overall statement something like: Their Pain/Gain + Our Differentiator But if I can tie it to a customer initiative it really makes it much stronger: Value Statement = Their Pain/Gain or Corporate Initiative + Our Differentiator

I use the Value Propositions/Statements and the JTBD information to create marketing collateral. One of the central factors is not to try to prove your value proposition but to use it only as a starting point if needed. What we are really after is to create a value proposition that speaks to a need that someone has and are unhappy with their present solution. If you are only offering an alternative to their current solution it can be very difficult no matter how much better it is. If you have to convince them to innovate and think differently, it still can be a difficult proposition. If they do not have anything to compare, they will create something. So, the alternative is to find a sweet spot that makes a viable offering.

If you just want a Value Proposition created, Osterwalder’s work would be the minimum I would suggest and it actually follows the first 4-steps I described in FoO. His book is Value Proposition Design: How to Create Products and Services Customers Want (Strategyzer)

I think that you need to do the fist four steps of the FoO for a few key accounts, then customers, then markets. Doing it the reverse way, markets first, is easier because you don’t challenge your assumptions. It doesn’t force you to articulate the differences in customers within a given market. Marketing to a large demographic is easy, who I call and what I say on Monday morning is tough.

Step 5-6-7 in the FoO is how we validate our Value Proposition.

Beginning: Funnel of Opportunity Introduction

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