In this week’s article, I am going to cover how to develop a unique value proposition. There are, of course, a number of different approaches to this, but this is the approach that I have used in the past and found to be useful in thinking about my client offer. To describe this, I am going to break the approach down into the component parts of ‘unique’, ‘value’ and ‘proposition’ to keep it simple. Consideration of each of these areas can prove valuable in testing your market offer.
One of the key goals of your strategic planning process should be to make sure that you are competing to be unique* and this is the first step in defining the value proposition. You will need to be able to articulate how you are dramatically different to your competitors and that you are the only player in the market that can do what you do in the way that you do it. The Holy Grail here is ensuring that your offer meets two key criteria:
- There is limited supply for what you offer (because only you can do it in the way that you do it)
- There is unlimited demand for what you offer (clients are always going to need the outcome that you provide)
Ideally, you are looking hold a position where clients recognise this ‘unique’ quality as owned by you and you have a clear reputation for it.
- Have we worked out how we will compete to be unique and so do not compete on price alone?
- Can we show limited supply for limitless demand?
The next consideration is value. We primarily get paid for the value we bring to the marketplace and not for our time. On this basis, we should consider how we can increase value for our clients and clearly articulate it to them. What is the value of our offer? Does it improve quality? Does it reduce their costs? Does it deliver more quickly for them?
In terms of how we might be able to improve value, it can help to think about value as a function of benefit over cost i.e. how much does a client have to pay to get a benefit that they need. Another way of expressing it is ‘outcomes that matter to clients’ over the ‘money that they have to spend’ to achieve those outcomes.
Once we understand this relationship, then we can look at the ways in which we can increase value. For example, we can do the following:
- Create additional benefit/outcomes for the same cost
- Reduce the cost of getting the same benefit/outcomes
- Increase benefit and reduce the cost
When we consider the top line of the value equation, we may want to review the levers that make us more valuable. How do elements like the quality of our people (and how well they are developed), our culture and approach to collaboration, our methodologies/IP, our capabilities and our brand/reputation contribute to the value offer? Making improvements in these areas that clearly link to driving the outcomes that matter to clients will help to differentiate away from cost.
- Are you clear what the foundation of value is for your clients?
- What is the benefit over cost?
- Do you know where your delivery of high value could be vulnerable?
The final area for consideration is the actual proposition itself. Are you able to describe to clients in a simple way what it is that you do? It is important that everyone in the business can clearly express it i.e. quite simply we….
- Is the proposition clear, compelling and backed by artefacts (white papers, articles etc.) that reinforce it?
- Can everyone in the business express it?
I hope that the questions outlined above will help you to think through your proposition…in my experience it’s worth spending some time considering these. It is not always an easy thing to do – which reminds me of the words of the late business philosopher Jim Rohn – ‘don’t wish it was easier, wish you were better’.
*In this article, I am making the assumption that you are seeking to compete by differentiation rather than lowest cost.