Only 7% of Leadership Teams Can Articulate a Common Value Proposition! Can you?

June 04, 2019 / By Bruce McDuffee

According to the Newport Board Group, only 7% of leadership teams can articulate a common value proposition. This is an astounding statistic. Think about it. If your leadership team can't articulate the company's value proposition, how in the world can employees be expected to articulate the VP? Taking it one step further, if the employees can't state the VP, how can they ever hope to convey the value of the company to customers and prospective customers? The short answer is, they can't.

Reflect on yourself. Are you able to respond quickly and automatically when someone asks you to state the VP for your company? Most of us are not able to articulate a good value proposition whether it's the VP of the firm we work for or our own personal VP. Today, I'll discuss in the context of the firm and leave it to you to ponder your own personal proposed value.

Why is it so hard to articulate what should be ingrained in your corporate mindset? Most of us, when asked to state our VP, default to describing the offering. It might go something like this: "What's XYZ company's value proposition?" "Well, ahm, we're the global leader in the manufacture of premium widgets. Our widgets are the best, most reliable and most cost effective on the market. ABC, DEF, and GHI are some of our global customers. Oh, and we just released version X which is our fastest widget yet."

If I'm a prospective customer, I ask myself, WIIFM (what's in it for me). I don't see any value in this statement unless I draw conclusions about 'fast' or 'reliable' which I'm too lazy to do. Perhaps a fast widget is important to me and there may be some value to speed, so why not make those features into a value proposition? For example: "Our widgets are fast (as proven by an independent testing lab) which means your manufacturing time is reduced by 15% translating to a 25% increase in operating profit." Hmmm, your prospective customer thinks, Now I see some value in the increased speed of your widget and there may be some value to me after all."

How is a firm to determine their value proposition? The VP is born out of the strategy, assuming the strategy is more than just another 'me too' offering. Strategy development is beyond this discussion, however if you are able to extract these components, you should be able to craft a good value proposition:

  1. Why do your customers choose your offering? Avoid generalizations. Break it down to buying criteria. You should see at least 2 common themes to use in crafting your VP.
  2. Survey your target market to determine the buying criteria and the associated priorities. Ideally the results will be statistically significant. However, at the very least you will have some qualitative data. Align your core competencies and/or defensible differentiators with the buying criteria to help craft the value proposition.
Tip 1 - Don't only ask your customers what is most important, ask them about their buying criteria. The two may be very different. For example, if you ask someone what's most important to them in choosing an airline, the answer is likely 'safety'. Ask the same person what factors they use to make an air travel purchase decision and you'll likely get a different answer because 'safety' is a given (in most cases).

Tip 2 - Don't rely solely on input from your customers for they have already chosen you and may not reflect the buying criteria of the target market in general. Survey those people in your target audience who have purchased from your competitor and who have never made a purchase but could some day.

Check out for some very good discussion and research about developing and evaluating value propositions.
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