Customer Value Proposition
Key Points:
The centerpiece of a strategy is the customer value proposition. The value proposition—as its name states—should describe the value an organization provides to its customers through its products and services.
There are three kinds of value propositions: all benefits, favorable points of difference and resonating focus.
Further, there are three generic value propositions themselves: operational excellence, customer intimacy and product/service Innovation.
Main Thoughts:
The centerpiece of a good strategy is a well-crafted value proposition. A firm’s value proposition articulates the value that a firm provides through its products and services to its targetd customers. The concept of the value proposition is not new; managers, marketers and sales professionals have for years being sharpening their messaging regarding what their products are worth to customers for years. Within the past decade however, researchers have provided clarity on both the kinds of value propositions that exist and the generic types of value propositions that firms use when developing their strategies. Kinds of Value Propositions
Researchers Anderson, Narus and van Rossum identify three different kinds of value propositions from their work with organizations throughout Europe and the United States.
All Benefits
All benefits simply lists all of the benefits that an organization provides to its target customers. While comprehensive, it tends to suffer from a lack of credibility that comes when the value proposition is not differentiated from competitors or focused specifically on the unique needs of the customer.
Favorable Points of Differentiation
Favorable points of differentiation emphasizes key differences between a firm’s offerings and those of competitors at the customer interface. It takes into account the notion that
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