Where Do Value Propositions Come From?

Value propositions are the core of all business opportunities but where do value propositions come from?  A value proposition is an idea (the recognition that something has commercial value) embedded in enduring customer needs and in your company’s ability to deliver it to the market.

Ideas are not value propositions

We all have ideas – many ideas.  It’s fun to have ideas.  We all enjoy the entrepreneurial flash, the cognitive gratification of drawing disparate concepts together into something valuable.  Ideas are like having children – fun to conceive of but hard to deliver.  Most organizations are awash in ideas.  They’re a dime a dozen.  We have more ideas than we know what to do with.  Ideas alone are of little value.  So why do we continue to have so many “ideation” sessions?  – Because we are really looking for value propositions.

The problem comes when we think ideas are value propositions.  We can all have “good” ideas, however, value propositions need information and insight from external sources.  No one is smart enough to come up with a value proposition in isolation.

“The answer is not in the room”

You cannot discover the value of an idea sitting in a room no matter how smart you are, no matter how experienced you or your team might be.  Value propositions need connection with customers and your company’s delivery mechanisms.

The insight that value propositions need connection with markets and abilities is a “good idea.”  We have sophisticated methods to understand our customers’ needs such as Voice of the Customers, lead user, site visits. Our understanding of how to build the ability to deliver has increased dramatically through product development processes, open innovation, supply chain management and sales force management programs.

Information alone does not create a value proposition 

These information-gathering techniques provide the substance to value propositions.  Neglect these techniques and you will only have ideas and never a value proposition.  In another post we describe a powerful method to arrange the information in a value proposition format that other people can readily understand.

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