Inspired business through architecture
5th December 2017
Business viability and architecture
5th December 2017

Value Propositions

Value Propositions

Of late I have been intrigued with the concept of creating value propositions. I’m concerned by the clear lack in ability of business owners and entrepreneurs to effectively identify and communicate these propositions to their customers. I count our business as one of these as we had debate after endless debate about why customers should buy from us.

Let’s look at it more closely. Simply put, a value proposition is “the promise of value to be delivered and the belief from the customer that value will be experienced” (standard definition from Wikipedia). Creating a value proposition is an integral part of business strategy. Kaplan and Norton for example stated: “Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.”

We are keen users of Alex Osterwalder’s business model canvas during our business design efforts. Alex and partners Yves Pigneur and Alan Smith has further explored this concept of creating solid value propositions because the business model canvas relies so heavily on the value propositions (one of the building blocks) provided for each customer segment.
In their Value Proposition Canvas® they relate value propositions directly to one of three key aspects:

  1. pains the customer are experiencing,
  2. gains that the customer will have and
  3. making the customer’s job easier.

They use words like positive and negative emotions, social or emotional support and customer experience. However, these words do not relate directly to the functional benefits of a product or service that we would normally try to communicate. There seems to be something deeper at play here. What type of value propositions do customers really want to hear?

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