Customer Value Propositions

‘Customer value proposition’ has become one of the most talked about jargon in the corporate world. Yet most companies fail to figure out what is exactly customer value proposition and what it constitutes. A product or service may provide superior value but if the supplier doesn’t demonstrate that claim than it will just be taken as marketing puffery.

Some managers believe that customer value proposition is a form of spin their marketing departments develop for advertising and promotion. This limited view often neglects the very real contribution of value propositions to superior business performance.

What managers usually do when they asked to list the value propositions –

List all benefits

Most managers usually list all the benefits the product delivers to the customer. This approach requires least amount of customer and competitor research and the list is based on how the management perceives the product or service. Secondly the managers usually end up listing the advantages which can be derived from the product but the customers not at all value those benefits.

Positive Differentiation

The managers end up listing the features in which the product is offering superior value compare to the competitor product. The biggest drawback is that the superior feature either may be valued low by the customers, for example car companies provides accessories incentives to customer but the customer rank of those feature is very low in their car selection process.

What should managers focus on

Resonating Focus

The resonating focus approach acknowledges that the managers who make business decisions have increasing level of responsibility and limited time so they want to do business with partners who understand the critical issues in business and delivers an ever evolving customer proposition. It is about integrating the system with an understanding of customer purchase usage and his priorities. This approach can only deliver superior customer value proposition resulting in sustainable competitive advantage.

By   Adam   Harris