Successful business executives understand the importance of creating compelling business plans and models. They further understand that great plans will fail if they are poorly executed. In essence, the formula for success is one part great plan, one part great plan execution and one part great people. What is often not clearly understood is the importance early-on of creating a unique, compelling, high impact, and fully defensible value proposition. Our view is that the value proposition defines and articulates the unique, intrinsic, and indispensable value of the business to customers. History has proven that if a company cannot clearly define what it does, that business will experience material difficulty in selling what they do.

With the value proposition as the starting point, the business model and execution plan can then begin to evolve. Not only does the value proposition define the benefits and value of a company’s products and services to its customers, it also serves as the blueprint for all marketing, sales, and product development activities. Because the value proposition serves as the cornerstone for marketing, sales, and product development activities, it also becomes the architecture for defining the ‘people skills’ needed to execute the plan.
A conscious and desired outcome of a thoughtful and compelling value proposition is that it puts the customer at the center of all product development and commercialization efforts. It forces the business stakeholders to intimately understand the customer problem solved as well as the importance of the problem solved. It further serves as a yardstick for determining if the problem solved is sustainable and can be scaled.


A well constructed value proposition must also define the target market in which it will focus as well as why it is uniquely positioned to compete in that market. It is critical to understand if the market selected is growing and can support a company’s long term growth plan. The target market selection must be driven by a company’s deep understanding of how their product will be used in that market. This understanding enables a company to then identify the market that will most reward the full value of the problem solved. Accurately defining how a product will be used becomes a major factor in understanding how to articulate a company’s unique positioning. The ability to become unique mandates that you have a clear understanding of competition to include positioning as well as competitor strengths and weaknesses. Clearly articulating a company’s competitive positioning is a critical component of value proposition messaging.


Once the customer profile, problem solved, and competitive positioning are understood, phase two of the value proposition messaging can begin. This phase includes analyzing all of the previous data points and articulating ROI messaging, which allows a customer to make money, save money, or become more efficient with the product and solutions defined. Knowing how customers make money with a product becomes an essential component in determining the company’s cost structure down to the delivery of the product. Understanding the product delivery cost structure then becomes the base point for determining customer pricing and ultimately how company profits will be achieved.

Once phase 2 of the value proposition process is complete all the data points are in place to construct value proposition architecture and messaging that will win in the market place. In the final review of the message, special attention should be placed on assuring that the narrative effectively communicates to a range of constituents. Specifically customers that buy the products, existing and future investors as well as employees and business partners.


Once the first draft is complete the task must then be to continually test and refine the value proposition to assure that it is always in alignment with the most important needs of the target customer and the realities of the changing requirements of the target marketplace. Make no mistake as to the critical importance of getting the value proposition right and having it constructed early in the product development cycle. It should always serve as the most clear and concise road map to the product development and business development cycle.

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Author Accelerence

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