Every business pundit has said at one time or another, “There’s no more misunderstood, argued about topic in business than <insert topic here>, but it’s really not that complicated. Here’s the secret to understanding it.” The concept of value proposition falls into this same category.
On the one hand, it’s a pretty simple concept to grasp. But like all simple, important concepts, it takes some thinking to understand it deeply and use it to your advantage. Let’s first look at a definition of a value proposition, then we’ll look at the three major components that comprise it so you can put it to work for you.
A value proposition is the collection of reasons why a person or company benefits from buying something.
This, at least, is our definition, and we put it in Professional Services Marketing (Wiley, 2009). Not everyone agrees.
From Investopedia:
What Does Value Proposition Mean?
A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.
Investopedia explains Value Proposition
Companies use this statement to target customers who will benefit most from using the company’s products, and this helps maintain an economic moat. The ideal value proposition is concise and appeals to the customer’s strongest decision-making drivers. Companies pay a high price when customers lose sight of the company’s value proposition.
You’ll note that the Investopedia definition and explanation reference a value proposition as a statement. Thinking of a value proposition as a statement does more harm than good for consulting firms. With these definitions in mind, firms head down marketing messaging and communication paths that just aren’t helpful, leading to Quixotic and circuitous journeys by marketing and firm leaders to find a sentence or two that encapsulates value of the firm while at the same time is different from all competitors. They invariably end up with some pap about how they’re an experienced, client-focused, results-focused, trusted partner, yadda yadda yadda (example – nickelharpa).
If you think of a value proposition not as a statement, but as a concept about why people buy something, then you’ve got a lot more to work with. It’s from that concept—the collection of reasons why people would want to buy from you—that you can put your marketing and sales to work much more effectively than if you try to boil it down so...
