What does a professional, consultant, executive or entrepreneur have in common, seeing that business success is a common driver and key performance indicator – the need for a compelling value proposition.
In the blog post “Your Value Proposition” we discussed four simple elements of a value proposition being:
- Need
- Approach
- Benefits
- Competition
We concluded that in presenting your value proposition, it is your responsibility to adapt to situations as needed and to ensure that you can validate the actual need, have reassurance that the approach will work, know that the benefits as real and that you are a competitive player in the market. How well you can demonstrate agility in aligning the right value proposition to the customer, will determine your success in business.
In this conclusion lies the clue in how you could go about when building a compelling value proposition?
- Validate the actual need
- A workable approach
- Real benefits
- Being a competitive market player
Let’s recap on a Definition of a Value Statement: It is the positioning statement that you communicate to articulate the benefits that you provide for your target audience (customer) and how you do that uniquely well.
Where to start
The need is the most important part of the value statement, the need is the source of innovation and inspiration, the starting point that defines the problem you are trying to solve. Once you understand the real need – you are halfway there, as you’ll have an offset point, a target for your solution – an audience with a the need and interest to buy you product or service.
To identify and understand a real need, you need to do some research to gather some insight in the challenges your potential customers are facing. Asking targeted “what, why, how, who” questions to guide you in finding the real need with questions like:
- what is the actual problem,
- why is it a problem,
- what are the outcome requirements,
- what does good or outcome success really look like,
- what is currently offered in the market,
- what has been tried,
- did it work,
- what works and what does not work,
- why does not work or work,
- what is the root cause of the problem
Validating the need
Once you have established the real need you should ask a very important question: “Is the problem worth solving?”
Forbes mentions for 4Us – four questions you should ask when defining your value proposition:
- Is the problem Unworkable? (if not fixing it, is their measureable consequences i.e. someone will get fired)
- Is fixing the problem Unavoidable? (i.e. driven by new legislation, or a governance mandate)
- Is the problem Urgent? (an urgent problem has the attention of the decision makers, the C-suite)
- Is the problem Underserved? (absence of valid solutions currently in the market)
If you can answer ‘Yes’ to all four questions you are on the right track in defining a compelling value proposition.
Measure if your solution and associated approach is compelling
Understanding the real need enables you to define the solution – the product or services that will address the need and solve the defined problem.
Forbes mentions having a product or service that is simply faster, cheaper and better is not enough to make it compelling – you should evaluate it in 3D.
- Discontinuous innovation – looking at the problem differently and offering transformative benefits
- Defensible technology – does it introduce intellectual property that can be protected and create a barrier to entry, hence create a competitive advantage.
- Disruptive business model – delivers value in monetary terms to incubate business growth.
A solution with benefits in 3D is worth pursuing.
Ease of Integration
You must ensure that the solution can easily integrate into the life of the customer. Defining the solution in an easy understandable language goes a long way, but if you end up with a complicated, time-consuming and costly project trying to integrate your solution with the customer’s business you are introducing an unwanted barrier of entry. For example – as technologist we can get so caught up in the fascination of cutting edge technology, the technical jargon and functionality, that we loose sight of the actual business driver – understanding and addressing the customers need – the use of the technology must make things easier and better, not more difficult and worse.
When engineering your solution focus on integration with the minimum business operation disruption while still delivering increased business value. This is referred to as the Gain/Pain ratio: the gain your solution brings to the customer versus the effort and cost to the customer to integrate and adopt the solution.
Understand your own SWOT
Remember that you are the core to your value proposition – so keep in mind your own Strengths, Weaknesses, Opportunities and Threats – focus on your Strengths to realise your Opportunities.
Build the Value Proposition
Incorporating the findings – understanding, defining and validating the need, which is addressed by a compelling, easy to integrate solution and playing towards your own strengths – you are ready to build your value proposition.
The value proposition statement could read: For (target audience), who are dissatisfied with (the current alternatives), our product or service is a (your new brilliant service and product definition), that provides (key problem solving capability) and (the benefits to the audience) unlike (the product or service alternatives).
Last tip: Ensure that you capture what you really are about – be true to yourself and authentic in your presentation, people see straight through anything else.
Related Blog posts: Your Value Proposition; Value!?
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