Value In The Eyes of the Beholder
It is an age old saying, beauty is in the eye of the beholder. We are not all in the business of delivering beautiful, but all businesses benefit from the humble realization that perceived value, that value which is seen from the eyes of the customer is the only “value” that matters!
So, when a company seeks ways to innovate in order to grow their business, delving into the state of their value proposition is time well spent. Companies who practice this introspection on the clarity and validity of their value proposition and assure it is well understood by all members of the company are more successful. When a clear, concise value proposition is at the heart of the company’s strategy, and it is well understood by every employee and/or partner of that company, they are in a position to make their every action contribute to the delivery of delighting their customers.
A useful exercise is for the leadership team to come together and challenge themselves to articulate the unique and differentiated value proposition they deliver. This exercise surfaces usually one of three different scenarios that present an opportunity for innovation or improvement:
1) Opportunity for Alignment and Clarity.
The leadership team is not really aligned on a crisp and clear articulation of the value proposition. This scenario can be the root cause of poor or less than optimal execution when functional leaders are not all aligned on what the company is trying to achieve with their offers in the marketplace. Alignment is a great start to accelerating opportunities as an organization!
2) Features Masquerading As Value Proposition.
The views on what is being delivered are primarily what I refer to as “inside out” rather than customer centric or “outside – in”. In this situation, what leaders espouse in the strategy session as the value proposition is often really just a list of features. Example: “Our value proposition to our customers is that our widgets are the fastest on the planet!” This is sometimes that often happens in technology and engineering companies, they get enamored with the function and features of their widget and begin to believe that features are in fact what makes it valuable. Sometimes they really are valuable, but in support of a customer need, want or desire that must be clearly understood and articulated first. In this case, I would challenge the team with, “But why is “fastest” equated to “valuable” to your clients?” Or hit them with the, “So what? Why do you think your customer’s care or need the ‘fastest?’?
3) There is a MisUnderstood Offer Package.
The initial response to identifying the value proposition comes out as a description of a component of the offer, maybe expressed in features or maybe even expressed in how it addresses the customer needs and wants. What is different in this situation verses # 2 above, is that the real learning surfaces as the recognition that the whole offer (product + service, as a service packaging, etc.) actually are what supports the value from the customer perspective. This is sometimes a situation that when explored, can yield incredible opportunities for innovation at the offer level. By asking the “But why does the client care about this product?” or “So what?” questions regarding the value of the offer the inherent value can be better understood, articulated, and enhanced through innovations.
The exploration of value proposition can yield incredible benefits through better alignment and focus as well as opportunities for innovation or incremental improvements. If you had your entire leadership team together do you believe they can all articulate the value proposition that differentiates you in the marketplace? It’s great exercise for a leadership team and can be conducted as part of a normal management team meeting. Alternatively, Lumen Strategies offers a 2-day strategy workshop which provides a framework for the exploration and development of actionable options for enhancing or innovating on your business’s value propositions for your current and future clients!