A Value Proposition by Any Other Name...
By Nima Parikh, Principal at Mezzanine Consulting LLCWhat
do you call that all-important phrase, paragraph or one-pager that articulates
what you want your business to be - that which you define in order to drive and
fulfill your company's business objectives? Companies use various terms, sometimes interchangeably, to
describe these strategic documents - strategic propositions, positioning
statements, brand propositions, brand statements, to name a few. While most companies tend to gravitate
towards one or another and use it consistently within their organization, going
across companies you will find what is one person's value proposition is
another's positioning statement.
Within a business, you may find that these terms are used distinctly to
articulate the strategic intent at multiple levels, from the overall business
all the way down to tactical executions like print ads or email campaigns.
I put
forth Value Propositions as the superset, under which the rest fall. The word "value" serves as a constant
reminder that you should be primarily focused on bringing value to your
customers. The word "proposition"
further conveys the understanding that your business or brand is "offering" or "putting
forth" this value in the marketplace, again focusing on the customer
perspective. Given this
combination, any qualifying word can be added in front of the term to clarify
the specific type of Value Proposition.
For example, Business Value Propositions are Value Propositions that
describe the differentiated value a particular business intends to provide in
the marketplace. Brand Value
Propositions are simply Business Value Propositions for a deliberately branded
business - not just a business with a name, but where a strategic plan is in
place and an appropriate budget is set aside to bring meaning to the
brand.
With
the primary emphasis on value, you should also ensure the value you offer is
differentiated from that of the other providers in the marketplace - those who
would also appear to satisfy the same need. The term "positioning statements", which some use
interchangeably with Value Propositions, tends to put the focus primarily on
differentiation from competitors.
But should not the focus be placed on the customer first and foremost,
and how he/she feels you are different from competitors? If you are different, but not in a way
that provides value to the customer, then who cares? Moreover, positioning is often used to refer to how your
business compares to that of your competitors on specific characteristics, some
of which may or may not be a part of your Value Proposition. A perceptual map is a common way to
depict positioning. It portrays how
buyers perceive different companies on 2 or 3 characteristics. The perception may be that your
business is actually on par with your competitors for certain characteristics,
which is fine as long as they are not those which appear in your Value
Proposition. So while using a
derivation of the term "position" tends fall short of conveying the importance
of focusing on the value you bring to the marketplace, it is also too broad to
convey a description that highlights only those characteristics upon which your
business Value Proposition is built.
Therefore, the term Value Propositions is preferred in lieu of
positioning statements.
Within
a company Value Propositions may exist at multiple levels. There are two types of architectural
structures that should be addressed in this situation. The first type of architecture addresses
the situation where there are multiple businesses within an organization, each
having an associated Value Proposition.
These Business or Brand Value propositions should be developed within a
synergistic architecture across the company. You may have one at the corporate level and then at
subsequent category levels. These
categories will vary based on your business model. In some instances you may have brands and sub-brands. In other instances you may have a more
horizontal relationship of sister or complementary brands. You may also have multiple related
product lines within a business.
Regardless of the relationship, these various Business or Brand Value Propositions
speak specifically to how an organization deliberately decides they want each business
to be represented in the marketplace.
The architecture helps depict the role of each Value Proposition and the
different types of relationships among them. The manner in which you develop and execute upon Value
Propositions should take the position within the architecture into
consideration.
The
second type of Value Proposition architectural structure does not pertain to
different businesses within an organization, but rather to help execute the
strategic intent within a particular business. The Business or Brand Value Proposition describes the
strategic intent of the business itself.
Mezzanine Consulting LLCTM introduces the term �Operational Value Propositions�
which are versions of the Business or Brand Value Proposition, tailored to help
implement the strategic intent of the business within an organization. For example Operational Value
Propositions may be specifically created for various functional areas within an
organization, or they could be developed for specific countries executing a
global Value Proposition. The next
level down in this architecture is what Mezzanine Consulting LLC calls "Tactical
Value Propositions." These are
meant to inform an individual or group of tactics, to ensure they reflect and
properly execute the strategic intent.
For example, when developing a print ad with a creative group, whether
internal or external, it behooves you to have a Tactical Value Proposition that
highlights and elaborates on those specific aspects of the overarching Value
Proposition that you intend to convey through that particular marketing
vehicle. You may also use Tactical
Value Propositions to bring the value to a client-specific level when
developing responses to requests for proposals (RFPs) and other client-ready
presentations. Given these
examples of how Tactical Value Propositions are used, it is not surprising that
they often define a more narrow audience than what the business as a whole may be
targeting. But that is just one aspect to keep in mind when
working with this type of architecture.
So while the architectural chain of Business/Brand Value Propositions to
Operational Value Propositions to Tactical Value Propositions requires a more
robust approach, the fact that it takes the strategic intent of a business and
enables implementation by multiple areas within an organization as well as
execution through various tactics makes it well worth it.
Overall,
while it may seem somewhat superfluous to debate the name used to describe them,
a name can have a direct influence on the crux of these strategic documents and
the perspectives that are applied.
The term "Value Propositions" not only ensures the essential focus on
the customer, it serves as a good superset that covers numerous types within.
Once
the concept of the value proposition is solidified, only then can you discuss
the implications and necessary considerations that must be taken into account
when working with multiple Value Propositions within and across the businesses
within an organization that together make up the Value Proposition Architecture
of a company. So now that the
terminology has been clarified, next comes the hard part - creating and
implementing high performance Value Propositions to drive your company's
objectives.
A Value Proposition by Any Other Name...