Five key questions to shape a compelling value proposition (Part 2)

Not long ago, we explained what a value proposition is, why it’s important, and how to overcome some of the most common challenges in crafting one. Actually starting the exercise is often the hardest part, as you face the tyranny of the blank page (or blank screen). So we’d like to share a few questions designed to prompt thinking about value from different angles, that should help provide ways to move past this initial hurdle.

1. What does your company do – and not do?

This question may seem simplistic, but it encourages zooming out for the big-picture view and explaining plainly and accurately what the company actually delivers. The goal should be to answer this question in the most succinct way possible and ideally, to aim for a single sentence. This will help you drill down to the fundamental characteristics of your company, as the provider of a range of products or services.

Add some dynamism to the sentence by using an active voice, and more verbs than nouns. An example of an active sentence is: “We develop software that helps users stay informed about real estate transactions,” rather than, say, “We are a software company with 10 years in the real-estate market and have operations in five countries.”

In the process of forming this sentence, you may discover that you need to word it in a way that doesn’t accidentally make a false claim, or give the wrong impression. It can be useful to define the boundaries and limitations of your product or service, so that your value proposition does not mislead or cause confusion. Clarifying what your product does not do can be a useful exercise in the following scenarios:

• Something might be expected of you because your competitors do it
• You may have provided something in the past which has since been discontinued
• Your communications so far have given potential customers the impression that you do something you actually don’t

2. Where does your product or service sit in your customer’s workflow?

Describing how your product or service fits into a current or potential client’s day-to-day workflow will make it easier to help them visualise the value your product or service adds to their operational process.

This can also be a good opportunity to explain how your product or service addresses common pain points. In the real estate data company example, the product could save time spent gathering, cleaning and aligning data from many different sources, reducing the chances of human error and allowing users to allocate finite resources to more pressing tasks.

3. How does your product or solution benefit customers?

Based on your previous answers, you probably already have some initial ideas on how to answer this question – so you’re hopefully off to a good start. This is also an opportunity to dive deeper into the benefits, which your value proposition is fundamentally based on. Here are some ways to do this:

• Consider what values are most important to your client base and how your company delivers on those
• Be specific about the value your company adds for each of your major client segments and any differences among them
• Go beyond using general adjectives like ‘efficient’, ‘durable’ and ‘sustainable,’ and so on; speak to the more distinctive qualities that ensure your product or service brings your clients tangible results

4. What is your competitive advantage?

While the previous question is designed to help you define your value relative to client needs, this question encourages you to compare your offerings to competitors in the markets where you operate. Because they are looking to solve similar problems, reflecting on how your approach is different – and most importantly, why – can lead to useful insights.

If this line of thinking leads to the uncomfortable discovery that there are no or few factors differentiating you from other enterprises in the market, it is probably a good idea to investigate why. Although this important task is beyond the scope of a value proposition exercise it can help to informally interview long-standing clients or run consumer surveys, to understand why they chose you over the competition.

Another often-overlooked area is to evaluate how combining your organisation’s various areas of expertise and experience can give you an edge in serving a niche requirement – and ensuring this edge is communicated. The real estate data company in our example might stand out by hiring people who have a background in both real estate and data analysis – talent that competing or less-focused data providers might struggle to find or retain.

5. What do you do to ensure quality?

You probably have embedded processes in the organisational workflow to ensure your product or service consistently meets a high standard. These may be considered business-as-usual in your company, but now is the time to shine a spotlight on them.

A company that ensures the basics are robust and focuses on consistency of delivery – in a time when many are focusing on bells and whistles, or grandiose statements – can reassure clients that its offerings are fundamentally sound and will continue to deliver value over time. External recognition, such as awards, certifications, rankings and validated statistics can demonstrate the extent of your commitment to quality, and how your company excels in its field.

Discovering your story

As you and your team ponder and discuss your responses to these questions, you’ll find yourself covering a lot of ground, and it won’t be in vain. The narrative that unfolds should help uncover valuable facets of your organisation that may have previously gone unnoticed, or at the very least, bring a new perspective to aspects that were undervalued. You can harness all of these findings for greater clarity on what the company does and why. This in turn will help your team to better articulate the organisation’s value proposition.

While this entire exercise can be undertaken internally and inspire productive, energetic discussions, it may be worth considering bringing in an outside consultant to provide a fresh perspective. A third party can help address all the challenges covered in Part 1, and more efficiently and effectively guide conversations towards productive and novel results.

However you choose to approach the challenge, investing the time and effort required to frame your value proposition will help you stand out based on your core strengths, get you noticed by the right people, and pay off in the long run.