Unpacking the Value Proposition
For everyone who has ever struggled with identifying a clear, concise, and compelling value proposition, Barry Horwitz shares an article that clarifies the issues and identifies the pitfalls.
In his book, Your Music and People, Derek Sivers addresses a problem faced by musicians: being asked to describe the kind of music they play.
Saying “all kinds,” doesn’t help. That, according to Sivers, is like saying, “I speak all languages.” Nor does claiming to be unique, since all musicians rely on “notes, instruments, beats, or words.”
A better approach, he advises, is to come up with an interesting phrase that will get people thinking. Something like, “We sound like the smell of fresh baked bread.”
Sivers wasn’t talking about “value propositions” per se. But he was making a related point — the way you describe your organization’s work can have a profound impact on both how well you are understood and how long you are remembered.
What is a Value Proposition?
A value proposition is a simple concept (maybe that’s why the really good ones are so rare). One definition I like is:
“A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you.”
Notice that it is fundamentally based on the customer’s perspective, something that distinguishes it from its sometimes jargony brethren, the vision statement, mission statement, and purpose statement.
What a Value Proposition Is Not…
… full of business or technical jargon — and simply descriptive:
Here’s an example a student submitted to me as stated by the CEO of the startup at which he was interning a few years ago:
[COMPANY] is a SaaS-based technology platform that leading organizations use to design, run, and measure positive impact programs, including, but not limited to, corporate culture, well-being, social impact, and sustainability.
In addition to the excessively formal phrasing (“including, but not limited to”), and the large number of buzzwords, this description is generic; it could be applied to all sorts of organizations serving any number of markets. It may capture how those inside the company think about their offer, but I doubt it connects with prospects, investors, and others on the outside.
… a list of features:
As the old business adage goes, people don’t want to buy a quarter-inch drill; they want a quarter-inch hole.
Likewise, people don’t select your product or service because of its features, but because it fulfills a need or solves a problem. Your value proposition should focus on that.
… a tag line:
While it is possible for a tag line to also work as a value proposition, these are the exceptions; in most cases, the two are not the same and serve different purposes.
Key points include:
- The music analogy
- Value propositions for nonprofits
- The tagline value proposition combo
Read the full article, Music that Sounds like Fresh-baked Bread, on HorwitzandCo.com.