The lingering pandemic, the Ukraine war, supply chain problems, and inflation has all types of organizations reviewing their “value” proposition. The idea of an explicit contract in B2B and an implicit contract in B2C used to involve fewer parties. If there were a bitter dispute, arbitration, courts, or government regulators would step in and try to sort things out. No longer valid in the world of instant social media. Think of Elon Musk’s Twitter purchase situation.
For everyday business, it’s simply keeping your promises to your customers. Our experience is that Elon Musk is pretty good with Tesla in keeping customer promises. No matter how the Twitter acquisition plays out.
Since marketing is about customer value, it’s essential to clarify the idea of value proposition in these challenging times.
Value Proposition in Marketing
The value proposition has been about what you “tell” the customer about the value you provide. For example, here are 7 Best Value Proposition examples from WordStream. And a comprehensive academic article integrates scholarly work in the field by Payne, Frow, and Eggert 2017. Their working definition is:
A customer value proposition (CVP) is a strategic tool facilitating communication of an organization’s ability to share resources and offer a superior value package to targeted customers.
Page 472, Payne,Frow and Eggert, (2017)
The word “proposition” is misleading.
It promotes the USP ( Unique Selling Proposition) idea. USP suggests that you say how you are unique and different from the competitor. Your focus seems to be on merely communicating your value to the customer. Not living it. The value proposition does not make it mandatory for the back-end value partners to buy into the value proposition. The value chain partners include the distribution channel like retailers and distributors, the organization and all its employees, suppliers, and the supply chain. In other words, at your factory, the factory manager, the janitor, and the intern would know the value proposition from day one. Not only would they “know” the value proposition, but they should actively buy into that value mission of the company.
In other words, the value proposition as part of the mission statement should be in every pore of the company and its stakeholders. That would be authenticity.
Why is authenticity more important today than ever before ?
Before the Internet and Social Media, you needed a team dedicated to dealing with public relations. Others in the organization or value chain were not supposed to talk to the press about the brand. If consumers spoke with a journalist- those comments could become widely available. But this was very rare. Often journalists would put out expanded stories based on PR releases. Or the company itself would offer paid advertising on traditional media like TV, print, and radio. Yes, in times of a product recall and health concerns, the media would be on top of the story following the “if it bleeds, then it leads” journalism principle.
The above scenario has changed radically with social media. Traditional media considers highly popular (or viral social media posts) essential sources of building a TV or newspaper story. As a result, PR departments may become extinct, as an announcement by Tesla indicates. Similarly, advertising is becoming more in tune with society’s current priorities. Why? Because it’s straightforward to find what’s on everyone’s mind from social media. Once brands have a sense of what their target market is thinking- they fall in line with their messaging for the brand.
So how do you make your value proposition more authentic?
- Why stay with the truth for the value proposition for everyone? As pointed out, the value proposition is historically a “pre-sales” thing. The pre-sales team handles the value proposition in many organizations, from consulting machinery to complex software projects. And then there is a different team that implements. Truth is simple, but mixed messages to various stakeholders are complicated. Everyone has access to social media. If there are contrary messages to pre-sales and implementation teams, it implies that if there is any mismatch between what the company says and does- you can expect to hear about it. More vocally for negative experiences. So it makes sense to stay with the truth of what you are promising your customer. It keeps things simple, and if you communicate internally and intensely, your employees, suppliers, distributors, and other stakeholders will hear you. They will support it if they understand and it does not involve more work.
- Should our value proposition change? Yes. Constant changes in the environment, social mores, technology, competitors, and customer expectations call for alert ears on the ground. Constantly ask: Is the customer experiencing value as we say we deliver? In enduring brands, you will find that the core value proposition does not change. See Coca-Cola, for example. Refresh the world endures- make a difference seems more recent.
- What is the biggest challenge in delivering an Authentic Value Proposition? The biggest challenge is not necessarily in the good intentions of company leaders. It’s in the implementation where things get lost. Mere communication is not enough. Review Company policies and processes in every function for consistency and support of delivering the value proposition.
In summary, an authentic value proposition is one where the brand keeps its promise. It involves the challenge of everyone believing that the company is honestly trying to deliver the value promised.