Friday, June 26, 2009

Value Proposition - How to Get on Target

By David Capece

We live in a world of overcapacity, where consumers are empowered to choose. With a market-driven approach you can stay focused on delivering outstanding value to your consumers to weather the downturn and be in great position for the upturn. It all begins with an on-target value proposition.

While a value proposition may sound complex and intimidating, the framework is quite straightforward. We focus on 3 questions: Who? What? Why?

The framework is simple (explained in more detail below), but getting it right, and making it stand out from the competition, is the hard part. Market-driven organizations should be constantly garnering feedback from customers and prospects through interviews, focus groups, quantitative research, competitor visits, shop-alongs, and web analytics. The more feedback you have, the more you understand your customers, and the stronger your value proposition can be.

For illustrative purposes, our team has imputed the value proposition of Apple in the following series of statements:


Convince (Who?): For talented creatives who aspire to share their story

That (What?): Apples offers creative expression through human technology that is easy-to-use

Because (Why?): Apple consistently innovates with breakthrough, well-designed products...iPod, iTunes, iPhone, iMac.

Below, we have outlined the questions you should be thinking about to help you develop a value proposition. This exercise should facilitate good discussion among your team, and can be repeated and refined over time to incorporate more market feedback.

Who? Your statement should read something like this: "For (target customer), Who (statement of need or opportunity)." Use the below questions and tips to guide you and read through our advice on customer segmentation.

* Develop a comprehensive list of your audiences and prioritize the top 2 to 4 audiences that you need to deliver against in order to succeed.

* What is your customer's "statement of need" or opportunity (what do they want)?

What and Why? The structure of your "What" statement: "The (product / service name) is a (product / service category) that (statement of key benefit - that is, extremely compelling reason to buy or use)" The structure of your "Why" statement: "Unlike (primary competitive alternatives, including "doing nothing"), our product / service (statement of primary differentiation)." Use the below questions and tips to guide you.

* What are current and future market trends (innovation, keys to success)?

* Who are competitors and why would they be selected?

* What are the key benefits -- the extremely compelling reasons to buy or use your company's product / service?

Once you have an on-target value proposition, align your team and organization to deliver on your promise. Beyond revising your marketing messages, you should think about the implications for product strategy and customer experience. If you have done it well, your value proposition will help clarify your organization's objectives and enable your team to rally against a clear vision.

Executive Prospectus Growing Your Business > Marketing