What Is Your Value Proposition?
By Tim Williams
If you’re like a lot of business executives, you may be concerned that you haven’t adequately defined your “mission” or “vision.” These often feel like buzzwords, and that offsite planning sessions that seek to define them often end in a bland statements that reflect more compromise than courage.
A well-defined mission or vision can be of immense value to an organization, but the real question agency executives should be asking is “What is our value proposition.” On the surface, this may feel like a soft concept as well until you examine what it really means. Quite simply, a “value proposition” is an articulation of the value you create for your clients. Ultimately, this is the most important question a business enterprise can answer.
A strong value proposition means a strongly focused team, a strongly appealing business model, and ultimately a strong margin. More than one observant business consultant has observed, “No margin, no mission.” The starting point for discussions of lofty concepts like mission and vision is value. A business exists to create value outside of itself. Indeed, creating value is the only reason for a commercial enterprise to exist in the first place.
Defining the value you create for your clients
How do you go about defining your value proposition? Start by clearing your mind of shop-worn concepts like “quality,” “leadership,” and “delighting customers.” It’s not that they’re not important; they’ve just lost their meaning. This kind of hyperbolic language also does nothing to distinguish your offering from others. And it does little to get you to the real question of value.
When agencies develop creative briefs for their clients’ brands, the section labeled “consumer promise” or “key benefit” is really the value proposition of that brand.
You have a value proposition whether you know it or not, and every value proposition will fall somewhere in these three areas:
Points of Parity | Points of Relevance | Points of Differentiation
Points of Parity are those that are generic to the category. A marketing communications firm is expected to deliver excellent client service, quality work, etc. In my work with agencies over the years, I have identified what could be considered the “top 10” Points of Parity. No doubt most of these will look very familiar:
We’re full service
We’re integrated
We offer a wide range of experience
We’re media neutral
We’re creative
We’re strategic
We’re your marketing partner
We’ll give you the attention of senior people
We produce results
We’re fun!
When agencies lean on points such as these as their value proposition, they are contributing to the vast “sea of sameness” described by most agency search consultants. As search consultant Bob Lundin once observed, “The common failing among agencies seeking new business is their inability or unwillingness to name what they stand for.”
Points of Relevance are a step in the right direction. Simply asking the “relevance” question means you are narrowing your target from “everybody” to “somebody.” Rather than a generic listing of generic benefits, it is a specific listing of specific benefits based on relevance to a particular type of category or brand.
Points of Difference are the highest order, and point the way the defining and articulating your value proposition. They are obviously also the most difficult to define, because they involve the most sacrifice. By articulating a Point of Difference, you are saying not only what you are, but what you are not.
Not surprisingly, most value propositions fall squarely into the “Points of Parity” for one of two reasons:
The leaders of the firm haven’t devoted the time and attention required to understand how their firm creates value. They simply assume that trying hard and “being your best” are the keys to success. But just as “hope is not a strategy,” “trying hard” is not a strategy, either.
The firm has in fact attempted to articulate its value proposition, but still hasn’t moved beyond “Points of Parity,” because doing so requires too much sacrifice. They want to be all things to all people. They want to appeal to every type of client by offering every type of service.
Getting to relevance and differentiation
Points of Relevance and Points of Difference can be defined by applying both analytical and creative thinking to questions like:
What business categories or industry segments do we know best?
What kinds of clients have we been successful in attracting in the past?
Which communications channels do we know best?
Which consumer touch points do we know best?
What distribution and delivery channels do we know best?
Which internal and external brand stakeholders do we know best?
What kinds of audiences or market segments do we know best?
What types of brands do we know best?
What differentiating methods and approaches do we use?
What kind of special knowledge and expertise do we possess?
This is much the same journey you take when developing and defining an agency positioning, because a positioning is ultimately a value proposition.
