Value proposition creation – set high ambitions and change development order

(C) Tweeter Linder 2015. All rights reserved. Photo by iStock

(C) Tweeter Linder 2015. All rights reserved. Photo by iStock

Crafting value propositions is one of the most important arts in new business creations. Often they get trapped in dilemma. High level trends, customer needs and proposition statements tied to a crisp solution. The idea here is about changing the order for how you create your pitch to make it crisper and to set a higher ambition on what you aim for. These ideas assume you have done pre-work in developing brutal truths and key insights and that you have articulated the business model on a canvas.

Poor value proposition are often based on poor articulations of customer needs and insights. Instead we often see high level trends, implied needs and generic market information. When the target is insights and inflection points. A common pattern you might recognize is the following. The market and trend description is on C-suite level. Customers business needs tend to be too high level too. The solution is crisp and concrete as discussed with the subject matter experts. The resulting value proposition is high level and not crisp enough. The art of value propositions is even more difficult when you deal with many tiers in the customer organization. Finally you might have to provide propositions towards end-users and partners for complex offerings.

When scrutinizing value propositions, your start to see patterns on short-comings. Here are a set of value proposition quality levels. Use them to test you current propositions and set an ambition level for what you think you can reach the next 3 months. Too often we use a common name for all 5 ambition levels.

  1. Value claims – Qualitative proposition where claims match trends and implied customer needs. These are of no value to customers.
  2. Value argumentation – Qualitative proposition with sharper statements to argue customer overs. These could work late in sales cycles for well defined opportunities.
  3. Value proposition – Qualified and quantified statements mapping on a generic problem statement. The added numbers stimulate concrete business discussions.
  4. Tailored value propositions – Focused on 3-4 propositions matching customers explicit needs. These make sense throughout the whole sales cycle. Close but not always a cigar.
  5. Differentiated value proposition – 1-2 propositions towards market makers. With 1-2 differentiators towards explicit needs. These ones are a clear winner.

When focusing a value proposition towards a specific deal you might cast the net too narrow. Consider expanding your scope. Move from an = opportunity (cookie) towards a set of related opportunities (cookie-jar). In this way you have expanded the possibilities to gain customer traction. To address the broader opportunities focus on a 10-page pitch format for a 60-90 min conversation is suitable. It is an art to decide what to pick and how to develop the proposition. The most common approach is to develop the material from 1 to 10. This is in my view the root cause to why we end up with the poor propositions. A better alternative is to develop the 10 elements in an alternative order.

5. Define scope (Your cookie jar) – for a set of related opportunities

4. Articulate customer pain-points and expected gains – crisp and with numbers

6. Opportunities for customers – to take action towards the challenges (i.e. select from your cookies)

9. Map reference cases on the opportunity – Cases with applicable experiences.

7. Timeline – as seen from a customer perspective – what do they need and when?

3. Market statistics – Numbers that back your story. Only include numbers that match the rest of your story line.

10. Why your company? – Relevant reasons, addressing both opportunity specific and the broader cookie jar scope.

2. Industry development – 3-4 inflection points that trigger customer actions now. Also here be selective in what you aim to talk about.

8. Value proposition – 1 slide representing 50% of the value with your pitch.

1. Title & 1 one-liner – Easy to get, the essence of the scope

The reason this alternative model produce superior results is simple. It start with the framing of concrete opportunities and customer needs. In a way putting the task with most of the thinking up front, and the easier tasks at the end.

Here are few suggestions for further reading in this field

With these ideas I hope I have given you insights into different value proposition ambition levels. Also how you can choose an alternative development order to generate crisper value propositions.

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