If you don’t have a Customer Value Proposition, you will fail!
Let me explain!
If you’re in business, presumably you want happy paying customers? Lots of them. Because they are the reason you’re in business, and the reason you make enough money to live the life you want to live.
If you’re running a not for profit business, such as a school or charity, you still want customers. OK, so it’s not for profit, but you cannot exist unless your target audience find out about you, become interested in what you have to offer, and commit themselves to you.
I’ve worked in the school sector for years, and it still amazes me that this point is contentious. If you’re leading a school, you cannot survive and thrive without your pupil roll achieving or exceeding a certain level. Fall short of that and you’re not viable. Your customers are your pupils, or your parents who invest in the education you offer them.
So what do I mean by Customer Value Proposition?
Usually when I talk about this concept to people, it’s just after we’ve talked about vision and mission. They feel safe with the latter two, but Customer Value Proposition? Blank looks all round!
Having a Customer Value Proposition that is right for you, and even more important is right for your customers, is vital.
If you’ve ever come across Kaplan and Norton’s Balanced Scorecard, you may have come across the concept.
What is it? It’s a clear, compelling statement or expression. The Value Proposition is focused around the experience the customer will feel. Not what you will feel, but what the customer will feel from your product or service.
And it has to be measureable. The customer has to see and believe that it is a value creating offer – that by dealing with you, he or she will have an experience that will add value to them.
A vague benefit statement won’t cut the chase. It has to be compelling.
In mathematical terms, you might say the Customer Value Proposition is:
Value = Benefits – Cost
And in working out the equation, you’ll need to consider all factors – not just financial. What are the costs and benefits in time? Or convenience? Or risk?
Some of my clients are fee-paying schools. What’s the value proposition for a parent sending their child at considerable cost and personal sacrifice in so many ways to your school as opposed to the alternative free school down the road? And academies and free schools are not immune. They are under pressure to attract the parents they require to be viable, and therefore must answer the same question.
And to make a more subtle point, the answer to my question is likely to vary depending on your customer. If you’re a lawyer, you’ll know you have a whole spectrum of clients with different needs and expectations. Their requirements vary, and the things that make up the answers to the equation question will be unique to each one. But you should also be able to generalise and develop a strategic definition which articulates the essence of your business.
If this discussion has raised a few questions in your mind, or produced an “aha” moment, why not get in touch? I’d be delighted to hear from you.