Value Proposition that sets direction and creates financial returns

Not many businesses have a clear executable Value Proposition. And because of a non-existence Value Proposition, it is difficult and unclear how that business can map out its entire business model on a business model canvass that demonstrates clearly especially the WHY question on customer preference.

Since customer preference is the prime focus of any business, the criticality of a Value Proposition cannot be under estimated.

A great Value Proposition is one that incorporate the net impact of the cost/improvement equation associated with a new offering that delivers the value which is meaningful to decision makers and sufficiently convincing to cause a change in their behavior ….and which only we can deliver that change to satisfy the customers’ needs.

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The shaping and development of a value proposition requires consideration on the following aspect to monetized what is being promoted.

1.  The perceive value

Value is what the customers believe it is. Value is not an absolute term but a comparative evaluation of what it means to the customers. When something is perceived to be of high value, it creates the perception that by consuming the product/services, they will enjoy a higher value. Obviously, the truth of the value must prevail beyond merely a perception and so create long lasting customer loyalty.

2. The creation of need

Bringing exposure to customers on something new over a period of time by educating them on the benefits is a key component of an effective business strategy. By doing so, customers come to learn of the benefits created by consuming that product or services which they were not aware of previously.

3. The awareness of want

Not only there is a need created but it should also drive the want to procure it which is related to affordability. Without affordability, sales will not take place, the consummation of that perceived value will not happen and the want will not be realized. 

4. The improvement of cost

Successful businesses also have built-in continuous cost improvement plan to bring cost lower so that it provides value for money. Such initiatives are part of a business planning process that benefit customers in the longer term.

5. The lesser impact of price

With the lowering of cost, businesses can afford to lower prices for the customers and yet maintain a healthy margin. In fact, it could well enjoy a much higher aggregate profitability due to higher sales volume.

This is how highly successful businesses competes. They have all these vital ingredients included into their Value Proposition to deliver a fantastic offering to the customers. Every point is related to a $ value, monetizable and it is all built into their financial planning process which aligns its resources to delivers value and keep customers coming back for more.