“Creating value”; “delivering value”; “the value proposition”; “focus on value, not cost”; “price is a reflection of value” – just a few of the statements we are using on a daily basis.

But what is value?

Value comes in different forms and types and can be different for a business, it’s shareholders, clients/customers, suppliers, employees. For example: A business might define value in recurring business and it’s loyal customers; the Board might value the increase in assets on the balance sheet; Shareholders define value in the profitability of the business that convert into dividend payments or an increase in the share price; Suppliers sees value in market penetration;  Employees perceive value in an inviting work environment, culture, recognition and benefits received from their employer.

In previous posts, we covered “how to build a compelling value proposition” and what is “your value proposition“. Value was associated with what you offer (sell) into a buying market – a product or service that addresses a specific need and is of value in a commercial world. “Remember – you define your value proposition, but it’s true value is in the eyes of the beholder – your customer.”

So you are creating value for your customers in solving a specific problem or providing to a specific need in a way that makes your product of service desirable. So when you want to describe your value, it is important to think about the customer’s need first. Being customer centric in your product or service design ensures your business is aligned to deliver to a specific customer (market) need, in a profitable way – value to the customer drives business results in revenue. Excellent customer service ensures recurring customers, customer retention means future revenue growth. Satisfied customers talk about your product and service which brings revenue growth. Thus focussing on the customer value first will lead to the other types of value, as mentioned above.

But how can you define value for your customers? Well, by simply asking if your product or service helps the customer to:

  • make their life easier or better?
  • save them time?
  • save or make them money?
  • be happier?
  • be more positive?
  • be healthy?
  • be more productive?
  • improve their effectiveness and/or efficiency?
  • achieve their goals and objectives?
  • build relationships?
  • make more friends?
  • get more customers?
  • etc…?

Place yourself in your customer’s shoes – be a customer to your own product and service. How does it make you feel? Does it help you – in what way? Use the answers to these questions to continuously improve your value.

Action: Have a look at your value chain and identify how the different processes, teams and people, add value in different ways and how these combine, to focus your value proposition onto the customer.


Related Posts:


Building a Compelling Value Proposition

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:

  1. Is the problem Unworkable? (if not fixing it, is their measureable consequences i.e. someone will get fired)
  2. Is fixing the problem Unavoidable? (i.e. driven by new legislation, or a governance mandate)
  3. Is the problem Urgent? (an urgent problem has the attention of the decision makers, the C-suite)
  4. 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.

  1. Discontinuous innovation – looking at the problem differently and offering transformative benefits
  2. Defensible technology – does it introduce intellectual property that can be protected and create a barrier to entry, hence create a competitive advantage.
  3. 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!?

Your Value Proposition

Your Value Proposition

Being in business means that you have something of value for sale, that is desired by someone else who is buying. Being in business isn’t just about running your own business, it also means that you are working within a commercial workplace where goods or services of value are being sold and delivered to a customer who is buying. These customers can be external to the business for example selling products and services to another business or to the public, or these customers can be internal if it is delivering value to another department or to your colleagues within the organisation or your workplace. Apart from providing your services to the customers, other people also benefit from your deliverables. These people are stakeholders and they can include your business partner, the board of directors, your manager or team leader, your team, the shareholders or even other businesses for example your vendors and suppliers who would all benefit from your success.

Even if you are not running your own business and are working for an organisation to earn your living, you are in business – the business of selling your own skills, experience and knowledge, which is of value to the company you are working for, in exchange for a salary or wages. The organisation hiring you is in essence your customer.

To be successful in business it is clear that you need to have something of value. Something of value means you have a defined product or services (skills, knowledge and experience) and a market with customers who value what you have on offer and are willing to exchange it for money. The customer must be aware of your product or service and more so must understand its value, before they will engage and buy. Creating this customer awareness is done through marketing, which is dependent on a clear definition of the product and it’s value to the target audience (the customers). This value definition is your value proposition.

Remember – you define your value proposition, but it’s true value is in the eyes of the beholder – your customer. Ultimately it is the benefits that your product and service bring to the customer that defines it’s value.

The value proposition is the backbone of the business – everything what your business is about evolves around delivering and continuously improving the value proposition. To gain new customers and to keep current customers and stakeholders involved and happy, you need to be crystal clear of your well defined value proposition.

Having a look at the value proposition examples of some of most successful companies like Uber, Apple, Slack, Digit, reveals that a good value proposition includes four elements:

  • Need
  • Approach
  • Benefits
  • Competition

Need – understand what your customer really wants, what do they need, what problems are they looking to solve. This is probably the most important part of the value proposition as without understanding the need, you’ll find it hard to define the solution (the product or services) that will satisfy the customers need in such a desirable way, that they are willing to spend money to get it.

Approach – having a solution to the customer’s need, your approach explains how you go about applying your solution (product or service) to satisfy the customer need – how the solution will solve their problem. The solution must be a direct fix for the problem. The approach you choose in delivering your solution must be the most effective means to apply your solution to the specific problem or customer need. Your approach will consist if specific components i.e. methodologies, solution architecture, prototyping, processes, templates, standards, etc, selected specifically to optimise the success in applying the solution (product or service) to the customer’s problem (need).

Benefits – focussed on the customer, what benefits would they get from using your services or products. Back to defining what value will you bring to the life of the customers when they are using your product or receiving your service. To understand this, you have to understand how the customer experiences your offering, answering fundamental questions like: “How much does this cost?”; and “Is the benefits worth the price?”. Benefits are tangible and measurable – usually in monetary terms. Benefits are not just ideas. Define the benefit in the terms the customer will relate to. Benefits should attract customers to what you offer.

Competition – what is your unique differentiator that sets you apart from your competition in the market. Again this should be approached from the customer’s perspective. How does your customer perceive your offering in relation to the other providers competing for their money. In what way does your offering differentiate from the competition i.e. quality, durability, reliability, guarantee and price.

Example: Let’s apply this to the Apple iPhone Value Proposition

Need: everyone uses smart phones – but it can be complicated to navigate. Your phone has become an accessory, and expression of your personality, a needed tool conducting our day to day lives.

Approach: Apple offers a unique user experience and design; it is not just a phone but also a lifestyle.

Benefits: Hassle free, superior operation – “It just works”. There is nothing quite like iPhone as every iPhone is built on the belief that a phone should be more than a collection of features. Exceptional design and state of the art engineering that oozes with built-in quality. Simple, elegant, beautiful and magical to use. (Just listen to their launch keynotes)

Competition: Genuinely unique iPhone features are highlighted on all marketing media i.e. security. Most of the iPhone features are not unique but experiencing the already known features on a iPhone is magical – that is what sets iPhone apart.

Using your Value Proposition

Breaking down your value proposition using the four elements mentioned above, puts you on the front foot to easily position all customer conversations towards insight and perspective of your proposition, to  the value you deliver for your customers and your stakeholders. Following through on all four elements during conversations takes the customer on a journey, a journey that makes it easier for them to relate to you and a clear holistically understanding your offering in context to the bigger picture. It also gives them the reassurance that you have the needed insight in what matters to them. Even if a prospect customer wants to focus on only one area for example the benefits aspects, you will be prepared for the engagement.

Keeping your value proposition front-mind during all customer and/or stakeholder engagements. This keeps you focussed on what’s important for business success – satisfied and happy customers.

To Conclude:

In real live you cannot predict the future, especially as you know that every situation is unique in it’s own right. In presenting your value proposition, it is your responsibility to have the agility to adapt to situations as needed, 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.


Also read…

“How to Build a Compelling Business Proposition” for some valuable tips to consider in compiling value propositions.

Value!? – what is value and how do you define customer value.

Costs reduction initiatives: Retain resources – incubate value innovation

Why is it that technology is always perceived as being too expensive? Do organisations really understand the underlining value technology brings to the business as a foundational enabler? If the answer is yes, then why the continued pressure on Technology Executives to reduce cost? It is interesting that when it comes to cutting cost, business and financial leaders always look at cutting technology resource head count instead of seriously evaluating opportunities to improve productivity and efficiency through value innovation.

In accounting terms there are only two main actions to improve the bottom line – increase Revenue and/or reduce Cost. In technology business operations these two factors can be influenced by several initiatives of which reduction of staff is one option. This should be the last resort, in my view. Despite the known facts that cutting heads in IT, in essence, is cutting intellectual property, knowledge and experience that resides within your team, is it still at top on the list for CFOs, other Executives and Board Members when the cost reduction discussion comes up!

Before we look at reducing the workforce delivering the technology services and products forming the enabling foundation for any organisation, surely we should look at viable alternatives, value innovative initiatives, forthcoming from our staff. Empower your staff to be an incubator for innovation.

Technology operations are all about providing services at a specific level as defined in SLAs (Service Level Agreements) for example:

  • IT infrastructure hosting email, website, file depositories and intranets,
  • Software Development of products the organisation sell to clients and/or use in-house,
  • Implementation, Integration and Customisation projects where software products are deployed,
  • Help/Service Desk supporting IT end-users, etc.

These services are all provided by technologist, by people, and People Come First (Read more…) Focussing on a professional, efficient and happy team by understanding the needs of every individual, goes a long way in ensuring the appropriate initiatives are forthcoming from your staff to make technology more proficient.

One of the key responsibilities of a technology executive is the efficient management of the resources. This is especially important when technology companies/departments are delivering services where the resources are the biggest expense on the technology P&L (Profit & Loss account or Income statement – Read more…).

Resources, as a high expense, reinforce the importance of proper Resource Management in business governance. Resource Management is not only about ensuring the right staff numbers with the right skills sets are available to deliver to business expectation and demand, but it is also about creating the right environment and support to ensure your staff flourish, grow and freely contribute. In my experience are ‘Resource Managers’ far too undervalued by business leaders not understanding the value of the role. Business leaders should work closely with the Resource Managers to ensure their staff is not seen as major expense but as a key asset contributing not only to current business operations but also future business growth and bottom line improvement initiatives.

Business are investing a lot in building teams of highly skilled and motivated people that feel valued and part of something special. These people are driving a clear and larger than themselves vision, that delivers results leading to recognition and self fulfilment. These people are full of innovative ideas on how to improve the business value proposition.

When it comes to resource management, incubating value driven innovation:

  • Ensure you have the right staff. Optimise your recruitment process to ensure that you have a robust framework for bringing the right people for your organisation onboard.
  • Keep your staff happy, mentally stimulated and intellectually engaged in all business processes and services. Make sure they are informed and are actively participating in the decisions driving the business forward.
  • Give them opportunities to learn in their delivery. Good people has a natural urge to continuous improvement – facilitate it.
  • Create communities where staff can learn and share knowledge on a formal and informal basis.
  • Plan your resourcing levels better. Ensure you have the right staff capacity with the right skills to deliver the services to the business demand and expectation.
  • Use flexible resourcing models combining permanent, temporary contracted and outsourced resources.
  • Continuously capture task and productivity data.
  • Utilise analytics, mine the productivity information to give your insight in areas/services costing the most and why. Act on these insights!
  • Build a framework you can use in planning resource capacity forecasting. Work closely with the business to understand the sales pipeline and product development strategy to ensure you optimise your resource capacity with the demand. There is nothing more disruptive to any organisation than constant resource level fluctuation (increase/hiring and decrease/firing) due to poor strategic and project planning.
  • Identify your key resources and nurture them, retain them at all cost – they are the knowledge keepers of your IP (intellectual property). It is cheaper to implement initiatives to retain staff than it is to replace them!
  • People want to feel part of something and if they are happy in their community contributing to a future and in the process they are improving themselves, they are much more likely to stay. Recruitment fees, where staff retention % are low, are a large contributor to cost.

Any cost saving initiative has a fundamentally key measure that needs to answer true: “What is the value to the business?” Revenue and cost do not always define the true value…

What is the true value your staff bring to the success of your business? Have you asked them and really involved them to work with you on ideas to improve business value through innovation rather than cost cutting?

One last point – when you have done your value analysis and it does come to letting staff go, remember this: treat them fare – you never know when you will need them again.


Are you under pressure to cut cost? renierbotha ltd specialises in the fine tuning IT operations for optimum business value – Make contact!