Steering Uphill: Refining Value Propositions in a Difficult Economy
By Kathleen M. Hosfeld
It’s not what Seth Godin may have said. It’s what someone else heard in what he said that I found intriguing. In a recent radio interview, a Seattle entrepreneur quoted Godin, a celebrated marketing author, as advising people to refine their strategies when times are difficult. He said Godin had written that it’s difficult to steer when one is going swiftly down-hill (i.e. when times are good). That much I’ve been able to confirm is Godin’s advice. The interviewee went on to say that it’s when you’re on the uphill climb (visualize riding a bike uphill) it’s time to focus on the right destination. So far, I’ve not been able to find where Godin says this exactly, but I think the entrepreneur has the right idea.
Many of us are seeing signs that the economy is improving, although long-term forecasts for jobs and therefore consumer spending predict a long recovery process. For this reason, now may be an excellent time for companies to invest in clarifying their value propositions and refining their competitive strategies.
What’s your personal value proposition? What’s the value proposition of your firm or its products or services? The term value proposition, like many, gets tossed around fairly indiscriminately. When we use it we mean a value propositions formulated according to a defined process. A formal value proposition can be a useful tool for clarifying and stating what you offer, who you serve, what benefit you create and how you are different from other resources available to customers. Clarifying the value proposition allows firms to identify what is extraneous, what can be cut without compromising what keeps customer relationships strong, and what strengths to leverage.
For those who may never have created a value proposition before, or those who need to refine theirs, we offer a worksheet to guide your reflection.
Research becomes useful in two key places of establishing or refining a value proposition. The first place is understanding the benefit or value you create for the audience. Many a company has mistakenly offered a benefit to an audience that the audience didn’t fully appreciate. Companies that failed during the dot.com bust offered a value proposition that users didn’t want. It’s important to use research to see from the audience’s perspective how the firm, individual, product or service can create value.
The second place research is valuable is in defining the difference between your offer and that of the competition or substitutes. Many service firms and service professionals don’t know how they are different. Some firms don’t know the importance of defining that difference. Sometimes it takes research or an outside evaluation to determine how you are different, or how to build more unique advantage into what you offer.
Social and environmental benefits or differences are emerging as important criteria to all stakeholders as the economy recovers. If your prior value propositions have not addressed them, now is a good time to review and update them.