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Value Propositions

Posted on: 29 January '10

As marketing professionals, most of us spend many hours coming up with a powerful value proposition for our organizations. Defined, a value proposition is a statement that illustrates/explains what a business’s product or service will provide to a customer through benefits and cost (price).

More often than not, many companies employ a “one-size-fits-all” value proposition to their target audience regardless of the maturity of the relationship with each client or prospect. I think it’s time we re-think this approach and create value propositions that map to different stages of the sales cycle.

Hear more at my YouTube posting:

For example, in the early stage of the sales cycle, when we don’t know the prospect well and vice versa, a value proposition should be aimed at addressing “what’s keeping the prospect up at night.” If your value proposition can have them think that you can solve their problems, they will be motivated to take action. “Taking action” in this scenario means the prospect sends an email through your Company’s Web site; places a phone call; downloads a White paper; or attends a Webinar. If your value proposition can do this in the early stages of a sales cycle, mission accomplished.

As a prospect becomes more engaged with your company, further along in the sales cycle, value propositions need to be created for different roles within an organization. Value for a CIO is much different than value for a CFO, which is different than value for a CMO and so on. With different responsibilities come different perceptions and different needs. Hence, different value propositions are needed.

Finally, as a prospect moves to the final stages of the sales cycle and ultimately turns into a client, the value proposition should be customized for the particular needs of that company (executive), not for a representative client. For example, if Nike Footwear becomes your client, a value proposition needs to be created for Nike Footwear and not for Reebok, Converse, Adidas, New Balance, Asics or any other designer of authentic athletic footwear.

The art of writing value propositions this way is relatively new. Frankly, a lot of work needs to be done by me at MindTree to match value propositions to different stages of the sales cycle. To be done successfully, companies need to do extensive research and then build value propositions looking inward based on a deep and intimate understanding of its target market, buyer profiles and its competition.

Has anyone out there done this successfully?

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  • Hi
    I found this very useful, creating a value proposition for different roles in a potential client organisation….. Hmmmmm… I’d better get back to work.
    Best wishes,

  • Interesting approach. Kind of similar to the AIDA model, except that you are suggesting further segmentation by industry or client. But at what stage does marketing end and sales begin in this case? Usually the aggregate value prop is created by marketing and the narrow value prop is the sales pitch.

  • Vijay. M

    I would like to add to the above post with the following six stages of value proposition creation:

    1. Market – who are you creating the value proposition for?

    2. Value Experience or Customer Experience – what do they say they value? This stage must include real feedback and must not be guessed.

    3. Offering – description of the product or service being offered

    4. Benefits – what are the benefits?

    5. Alternatives and Differentiation – what substitutes or alternatives are there? ‘Do Nothing’ and ‘We’ll do it ourselves in-house’ are often the biggest. How are you different from anything else being offered?

    6. Proof – what evidence have you got that you can do what you say?

    Regards, Vijay

  • Good Info – but generously what I feel is first build trust and then think about “Value Proposition “. There are hundreds of companies ready to work in day/night for their client. What’s really missing is the essence of relationship. A good Relationship will make the client to open up with his real problem. When you know what the real problem is, your job becomes more easier and we need not search for a “Value Proposition ” – It gets automatically crafted.
    Just a thought
    Kalpesh Surendra

  • Geetha

    A pretty interesting interview in Forbes India. (The Daily Sabbatical, Rotman)

    Thanks and regards,


  • Amit

    Not sure if it has been done some where , but as an MBA Student , this is being taught in one of the marketing courses. And having worked in the field had having a first hand experince of “loosing value” I can very well appreciate this. Hope to become a value merchant once I graduate this spring.