This is an essential question that every entrepreneur must ask when taking the risk of creating a new business, yet few seem to do so.
The value proposition is what makes Coca Cola different from Pepsi Cola, Apple from Huawei, Bosch from Siemens, FedEx from UPS.
And the issue is not a minor one, because the value proposition has a great influence on how the company defines itself, how it operates and how it treats its customers.
And the risk of not defining it is that it can have counterproductive effects on sales and marketing efforts, customer retention and prospect attraction, or the company’s work culture.
For many it is easier to use common and inconsequential words:
- A cliché.
- An easy word.
- Quality.
- Personalized service
- Gourmet.
- Unique
- The best choice.
- And even worse things…
So that later on in the daily operation there are problems such as:
- Low volume of new customers.
- Difficulty to convince with simplicity how our company is a better option than the others.
- The price sensitivity of customers.
- The ease with which they leave us to go with others.
- Or simply how to align teams around a strategic point.
The value proposition is essential to develop a business model.
It is the essential step that precedes the development of the basic areas of a business project, and is subsequent to having asked what are the central factors that influence a person to make a purchase decision and how the company is going to solve them.
This means that we cannot take lightly any idea we have as a value proposition and take it for granted, especially if we have not based it on what the brand solves.
It is a big risk.
On the other hand, it is worthwhile to analyze Value Propositions of recognized brands:
- iPhone — The experience is the product
- Uber - Your ride, just a click away
- Airbnb - Our home is your home
- Spotify - Music for now
- Waze - The best route, every day
And, as you may have noticed, your perception of the brand is very close, or is around the words that define the value proposition. And there is a reason for this: the value proposition must be supported by company actions, and these are executed by the team that makes it up.
The value proposition acquires its full power when delivered to the customer in terms equal to or greater than the promise made.
When a brand’s value proposition is positively massified in a population, the business is capitalized, and the possibilities of continuing successfully in the market expand over time.
It is then that the power of defining a unique and consistent value proposition becomes evident.
What tools help to develop a Value Proposition?
The first is the Value Proposition Canvas, developed by Alexander Osterwalder, creator of the Business Model Canvas and the Butterfly Diagram, which is part of the course “The Secret Power of Brands” of the East Anglia University.
I will not dwell on the methodology of both options, because the first has its own book, and the second deserves a special article dedicated expressly, but consider this reading as a first step and take the tool that best suits your needs, and explore.
