The “VALUE PROPOSITION” A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings. The value proposition is basically marketing’s “internal affairs”, the checks and balances that hold the corporation accountable to promised customer value. Yet the “Value Prop” is probably the most misunderstood product framing strategy used today.

1. “VALUE PROPOSITION”
…addressing customer outcomes
Andre’ Harrell
CEO/President AH2 & Beyond Consulting
Whitepaper 2015

2. CONTENTS
Introduction .......................................................... 3
THE “VALUE PROPOSITION”........................................... 3
The “Value” Debate............................................... 5
Value Proposition (VP) Culture.......................... 7
Shared Responsibilities ................................................ 8
Building a “VP” culture ................................................ 8
Constructing the Value Proposition .............. 11
7-Step Value Proposition ............................................ 11
The Power of the Value Proposition ............... 16
Powerful Value Proposition Tips ................................. 17
Final Thoughts .................................................... 19
Selected Bibliography ....................................... 21
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3. Introduction
The “VALUE PROPOSITION”
A business or marketing statement that summarizes why a
consumer should buy a product or use a service. This
statement should convince a potential consumer that one
particular product or service will add more value or better
solve a problem than other similar offerings.1 The value
proposition is basically marketing’s “internal affairs”,
the checks and balances that hold the corporation
accountable to promised customer value. Yet the “Value
Prop” is probably the most misunderstood product framing
strategy used today. A value proposition is
a promise of value to be delivered and acknowledged, and a
belief from the customer that value will be delivered and
experienced. A value proposition can apply to an entire
organization or parts thereof, customer accounts, or
products and services.2 Building a value proposition to the
chagrin of many takes a number of bricks which I’ll outline
in this paper, however, the #1 objective of a value
proposition is “Creating Customer Value” (CCV). While “CCV”
has become just another sales & marketing buzz phrase it
nonetheless is the competency of a value proposition. A
competitive advantage for any corporation is creating a
powerful value proposition that inspires the customer, and
strengthens that relationship. Yes, I believe a well-
crafted strategically implemented value proposition can
catapult a product, service and company to the top of any
market. Take for example APPLE the world’s probably most
1 INVESTOPEDIA
2
Wikipedia (Value Proposition)
3

4. successful company and what they did to place “iTunes” at
the top of digital music:
Apple is best known for their products' innovation and
visual appeal. ITunes, the country's leading music
retailer has sold over 25 billion songs to over 500
million users. The value proposition, found on
iTunes.com, is great because it looks so clean and
concise. The headline clearly expresses the product's
competitive advantage and there is a clear call-to-
action to move the visitor down the sales funnel. The
visuals at the bottom put the icing on the creative
cake.3
Figure 1 (dcu21digitalmarketing.wordpress.com)
3
Brett Casella (Impact Branding & Design June 26,
2013)
4

5. Kantar Group a UK based market research company has claimed
APPLE’s value proposition to be the best in the industry
among PC’s. Carolina Milanesi, Chief of Research at Kantar
Worldpanel ComTech states in her report that "As you would
expect for a market that started in 2010 with the first
generation iPad, tablet awareness among consumers is very
high with only 4% of non-owners saying they have never
heard of such a device." Apple has proven that they
understand how to engage their customers by providing them
with quality designed devices that perfectly blend with
cutting edge applications and iCloud services. Apple's
iTunes is still the industry's leading music platform and
the App Store has no equal at the moment.
In the end it's about the value proposition stupid, and
Apple is the company that understands that the best.
The “Value” Debate
Most would say a marketer’s job is 3-fold to create,
deliver, and capture customer value. The question that has
elicited quite a debate is “What is value? Depending on
whom you ask the answer I guarantee will vary, which allows
for a lot of ambiguity. Louis J. De Rose, head of De Rose
and Associates, Inc, defines value: “Value is the
satisfaction of customer requirements at the lowest
possible cost of acquisition, ownership, and use”. In a
1988 staff paper by Michael J. Lanning and Edward G.
Michaels they define value from a different perspective: "A
business is a value delivery system, that should emphasize
in a clear, well-articulated "value proposition" for each
targeted market segment—that is, a simple statement of the
benefits that the company intends to provide to each
segment, along with the approximate price the company will
charge each segment for those benefits". Lanning holds that
winning companies are those that develop a competitively
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6. superior value proposition and a superior value-delivery
system. One of my favorite CEO’s from afar Jack Welch
Chairman and CEO of General Electric between 1991 – 2001
posed the challenge to GE during his tenure: “The value
decade is upon us.
If you can’t sell a top quality product at the world’s
lowest price, you’re going to be out of the game.” Many
would probably differ with that view where top quality is
perceived as having a top price. It’s that old adage “you
pay for what you get. The fact is value ultimately depends
on the perceiver…and receiver. The strategically smart
companies not only offer cost value but they also offer
service value (or extended customer value) as well. Say you
purchase an expensive $60,000.00 vehicle you expect the
dealer to provide excellent customer service when it comes
to maintenance, repair and addressing your questions
professionally. Drug companies who offer patient education
materials or programs provide value-add resources that
reinforce customer value. For most organizations a large
part of their company’s expenditures is used to satisfy
customers, and determining how to budget between value-
adding costs and non-value-adding costs. Delta Airlines may
consider offering free baggage check in for all passengers
which would raise the cost of a flight by $30. Before
enacting the policy, Delta Airlines would need to conduct
voice of the customer research to gather whether customers
would be willing to pay $20 extra per ticket for that
service. If the answer is no, then the free baggage check
is a non-value-adding cost. However, if Delta Airlines
throws in free meal service for flights over 4 hours at $30
extra a ticket and travelers think it’s worth $40, then
that would be a value-adding cost.
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7. Value Proposition (VP) Culture
An organization’s foundation should be held in place
by its value proposition. Let’s move to the side a
product’s value proposition and focus on the company’s
value proposition. If you were to survey each one of your
employees what would they say about the company’s value
proposition and how it addresses their needs? Is it free
daycare? Free health club memberships? How does an
organization “value” its value proposition internally as
opposed to the external customer? When a company’s culture
is built on a value proposition premise then it stands to
reason that a boomerang effect of that behavior will touch
the external customer. Building a “VP” culture encourages a
“profit sharing” environment in that everyone feels they
play a key role in the success of the company. A valued
employee wants to be knowledgeable about company practices
and how they can transition that knowledge to help
customers have the best experience with their products or
services. Companies benefit from having a “VP” culture
because it encourages employees to execute better customer
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8. service and not feel it’s a job requirement but overall
normal behavior in their work. Implementing a Shared
Responsibilities Platform is one way a company can enforce
but also encourage value is being executed every day:
Shared Responsibilities
1. We have a responsibility to our customers
We must put our customers first, provide superior
advice, products and services, and always act with
the highest level of integrity.
2. We have a responsibility to each other
We must provide outstanding people the best
opportunity to realize their potential. We must
treat our teammates with respect, champion our
diversity, share the responsibility for our
successes, and accept accountability for our
failures.
3. We have a responsibility to our department
We must put department A’s long term interests ahead
of each department’s short term gains, and provide
superior results for our shareholders. We must
respect the local culture and take an active role in
the communities where we work and live.
Building a “VP” culture
To ensure there’s unwavering focus on providing
optimal value to the customer, a company has to have the
same discipline and passion delivering value within its
inner walls. Creating an organizational culture based on a
“value proposition theme” is not an easy task. Obstacles
like politics, heavy turnover, and poor leadership can get
in the way and everyone ends up valuing only themselves.
The old saying there’s no “I” in team had immense
popularity in the 80’s & 90’s however the inspiration from
that message has faded. Global competition and heavy
unemployment has birthed a “survival of the fittest”
personality in today’s business. Companies who are
encouraged to find ways to inspire their employees and
ultimately the customer have to do so operationally….not
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9. philosophically. The value proposition coming from a
company and its products/services has to truly mean
something, and not be perceived as corporate speak.
Building a corporate culture that governs “value
propositioning” internally takes 8 critical steps:
1. Building Interdependent Partnerships
2. Creating Value For Customer
3. Develop People For Peak Performance
4. Frame a Vision of the Future: Execute Strategically
5. Foster Business Growth
6. Demonstrate Positive Change
7. Lead By Example
8. Encourage Innovation and Endless Learning
It starts from the top! Company’s first must create a
culture of trust and commitment to its employees well-
being…yes well-being. These 8 steps require a level of
commitment from EVERYBODY in an organization if it’s to be
about providing a strong value proposition to the customer.
For example “Developing People for Peak Performance” is a
purposeful act a company can deliver that not only
demonstrates a willingness to progress the competency of
its workforce but shows the value it places on the
person…not “employee”.
Relying on the usual corporate values and credo just isn’t
enough to inspire the employee to go beyond expectations. I
always give the example of when I started my career out of
college with Johnson & Johnson, Inc. and back then you
actually believed in the “J&J Credo”…heck it inspired you:
9

10. Figure 2 (Johnson & Johnson, Inc. Credo)
The new generation of employee requires a bit more energy
from corporate leadership which involves a much more hands
on approach. Measures that involve the 8 critical steps
I’ve outlined above opens the doors to more collaboration,
employee innovation input, and engagement. When a company
lives by a common set of values that embrace the employee,
then there’s a sense of empowerment to share that same
embrace with the customer. A happy valued employee becomes
the company’s best value proposition to its customers.
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11. Constructing the Value Proposition
Building a winning value proposition should include 4
critical components: 1) Disrupt Market Satisfaction 2)
Optimize Communication of Value Proposition 3) Generate
Broad Product Demand 4) Ensure Positive Product Experience.
All 4 components can provide a competitive edge when
focused on the right audience the right number of times.
Defining how your company is different has to be concise
and appealing to the customer’s strongest decision-making
drivers. Companies suffer greatly when customers either
lose sight of a company’s value proposition or is no longer
inspired by it. As mentioned while a winning value
proposition has to have a “D.O.G.E” theme (e.g. Disrupt,
Optimize Communication, Generate Demand, Ensure Positive
Experience) the process to building a “VP” is very
specific. Below outlines a 7-Step process to building a
“D.O.G.E.” value proposition:
7-Step Value Proposition
1.Start with product core competencies
2.Know your customers
3.Competencies=Character
4.Research the competition
5.Look at trends in your industry
6.Articulate effectively product vision
7.VALIDATE THE VALUE
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12. Start with product core competencies
• What are you really good at?
• A value proposition has to be what you do and who you
are. It can’t just be what you want to be and what
you say you are.
Know your customers
• Who are your top customers?
• What problems do you solve for them?
• What problems do they want solved?
(That no one else can fix)
• Is there a new trend in any of your key customer
segments?
1
TO DO:
Make a list of the following: what you brought
to market first, what you offer as the only
provider to the market, and what makes your
offering clearly superior to any alternative.
You are looking for what makes your product
unique. These are good differentiators and will
help the process.
2
TO DO:
Build segmentation variables that include:
• Identifying appropriate market channels to play in.
• Identify customer characteristics/behaviors that
may explain likelihood to uncover need and advocate
for a product/service
• Identify customer characteristics/behaviors that
may explain early adoption or non-use.
• Identify market characteristics that may explain
likelihood of product/service access and usage
• Build customer “Segmentation Variable
Prioritization” matrix
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13. Competencies = Character
• Ask yourself why someone should buy from you instead
of a competitor.
• Using the language of your customers, refine your core
competencies as values.
• If your answer is “it works”, “it’s new” or “it’s less
expensive” your potential success may be limited.
These qualities do not make a product unique.
Research the Competition
• Choose 3 or 4 competitors and study how they market
their company and products
• What is their value proposition?
• Can they defend it?
• Map their core competencies versus yours
3
TO DO:
Conduct a “Voice of the Customer” (VOC)
feedback mechanism that will describe
customers’ needs and their perceptions of your
product/service.
VOC data helps an organization:
• Decide what products and services to offer.
• Identify critical features and specifications for
those products/services.
• Decide where to focus improvement efforts.
• Get a baseline measure of customer satisfaction to
measure improvement against.
• Identify key drivers of customer satisfaction.
4
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14. Market Trends
• Are things changing?
• Can you take advantage of a trend and grab an exciting
position in the market? EXAMPLES
– “Quality of Life”
– “Cognitive Mobility”
– “Excellent Safety Profile”
– “Cost Benefit”
TO DO:
Complete a War Games Workshop/Session that:
• Develop and/or capture relevant, potential core
messages the competition uses or is designing.
• Build comprehensive list by grouping competitors’
messages to be used to compare/contrast against
your product/services core message.
• Identify competitor functional benefits, practical
benefits, and emotional benefits.
• Identify competitor brand communication strategy
and personality traits. This will help build your
messaging platforms to best highlight brand.
5
TO DO:
Basic Market Research that is often broken down
into 2 categories: Primary Market Research &
Secondary Market Research.
• Primary market research is research that you can
conduct on your own, rather than information
already published. Conducting focus groups,
customer surveys, and competition “Secret Shopping”
are ways to implement primary market research.
• Secondary Market Research is research already
published that may have relevancy to your business.
Exposure to secondary research can be gained by
contacting market research firms, Chambers of
Commerce Government Information etc..
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15. Articulate Effectively Product Vision
• Product Leadership
– Unique product profile
– State-of-the-art features/benefits
– Innovative solutions
• Customer Relationship
– Quality relationships with customers
– Offer “complete” solutions
• Refine your value proposition until you can articulate
it in one sentence.
6
TO DO:
Building the product/service “Vision” so that
it’s easily communicated and comprehensible to
the customer is critical. Several drafts should
be completed with milestone reviews in between
will help validate product “Vision”. The “Core
Purpose” for articulating effectively the
product/service “Vision”:
• Establishes your product/service fundamental reason
for existence.
• Provides idealistic motives for your company and
the products/services you promote.
• An opportunity to share with your customer base the
“soul” of your product/service, not just pricing or
surface attributes.
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16. Validate the “Value”
• Test the final value proposition with customers to see
whether it resonates: EXAMPLES
– Key Opinion Focus Groups
– Venue Customer Interviews
– Mock Testing Meetings (KOL Driven)
– Specialty Advisory Boards
– Product In-service programs
– Conventions-White Paper Discussion
– Regulatory/Legal
The Power of the Value Proposition
Inspiring a customer and converting them to “Loyalty”
status can be directly tied to how powerful your value
proposition garners. Understanding that customers are
assets and, like valuable assets, if communicated properly
too, can have a dramatic impact on business performance.
Creating a strong value proposition that pinpoints customer
demand/interest results in a competitive advantage for any
organization. Companies can gain this advantage by building
a value proposition that engages customers in a way that
not only strengthens a particular product’s portfolio…but
it also strengthens the relationship. If you are actively
pursuing a customer-focused mission and asking, “Who is our
customer”? Are we meeting their requirements and exceeding
their expectations?—the leap to building a value
7
TO DO:
A revisit of all 7-Steps is necessary to ensure
the finished product of your “Value
Proposition” is not only valid but is aligned
to your corporate values.
16

17. proposition that’s powerful is a positively optimistic
goal. A powerful value proposition addresses questions
like: “What will be our customers’ future needs? How can we
meet them? What must we do to gain customer inspiration?
Powerful Value Proposition Tips
• Examine everything you do well against these
criteria: “Does this message create sustainable value
to the customer? or “Does this contribute to meeting
customer demands?
• List the requirements you believe your have, then
validate them by asking your customers what their
requirements are.
• Develop an “SOP” for your products and services that
consistently meet customer requirements. In addition,
develop an “SOP” for customer service that exceeds
customer expectations. An “SOP” itself can establish
a value proposition that “Leads by Example.
• Conduct in-depth interviews with key customers to
determine how they view your product, service and
company…both strengths and weaknesses. What do they
think the focus of your product, service and company
should be in the year ahead. The results of the
interviews can help construct your value proposition.
• Interview the customers who have stopped using your
products or services. Find out their reasons for
leaving as this may identify possible gaps in your
current value proposition that can be addressed.
• Importantly, your value proposition has to be
executed flawlessly so treat your internal customers
(employees) with care and respect…customers will
receive the fruits of that respect.
• Peek at your competition. Conduct a benchmarking
research review of organizations that are known for
their strong value propositions.
In a March 2006 publication in Harvard Business Review
authors James C. Anderson, James A Narus and Walter Van
Rossum had what I thought was a great point of view on
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18. building a strong value proposition that delivers superior
business performance:
We contend that customer value propositions, properly
constructed and delivered, make a significant
contribution to business strategy and performance. GE
Infrastructure Water & Process Technologies’ recent
development of a new service offering to refinery
customers illustrates how general manager John
Panichella allocates limited resources to initiatives
that will generate the greatest incremental value for
his company and its customers. For example, a few years
ago, a field rep had a creative idea for a new product,
based on his comprehensive understanding of refinery
processes and how refineries make money. The field rep
submitted a new product introduction (NPI) request to
the hydrocarbon industry marketing manager for further
study. Field reps or anyone else in the organization
can submit NPI requests whenever they have an inventive
idea for a customer solution that they believe would
have a large value impact but that GEIW&PT presently
does not offer. Industry marketing managers, who have
extensive industry expertise, then perform scoping
studies to understand the potential of the proposed
products to deliver significant value to segment
customers. They create business cases for the proposed
product, which are “racked and stacked” for review. The
senior management team of GEIW&PT sort through a large
number of potential initiatives competing for limited
resources. The team approved Panichella’s initiative,
which led to the development of a new offering that
provided refinery customers with documented cost
savings amounting to five to ten times the price they
paid for the offering, thus realizing a compelling
value proposition. 4
4 Harvard Business Review (Customer Value Propositions
in Business Markets) March 2006
18

19. GE for years has made customer value propositions a
fundamental part of its business strategy. With laser beam
focus GE has drawn on its best practices, and have built an
approach to delivering customer value propositions that
communicate, with resonating focus, the superior value
their offerings provide to target market segments and
customers.
Powerful customer value propositions can be a guiding
lantern as well as the cornerstone for superior business
performance. Thus, it is the responsibility of top
management not just marketing management, to ensure that
their customer value propositions are just that…powerful.
Final Thoughts
There is a great payoff in building a strong value
proposition which leads to a strong corporate brand. APPLE
today can place its name on any portable electronic device
and customers will stand in lines longer than the store
itself…in the freezing cold. It has been said that if
you’re alive, breathing, and walking you’ve sold something
at least once in your life. Whether you’re trying to sell
or persuade someone your point of view, it’s all selling
and it’s important to have a solid value proposition
supporting it. In the old days selling the features and
benefits of your product/service was enough and customers
usually made the decision whether or not those
features/benefits addressed their needs. Today, there’s so
much competition and parity with products and services that
customers literally have a ton of choices within one
category. For example, let’s look at bottled water what is
the difference between Evian, Dasani, VOSS, and Fiji?
Exactly, there’s very little difference however.in a 2014
FOX News report VOSS Artesian Water was noted as the #1
sold bottled water.
19

20. Figure 3 (nkswingle.com/voss-product-photography/)
When researching why VOSS Artesian Water is popular among
the water drinkers today it’s not ONLY because of the
packaging (although a great marketing gimmick), it’s the
messaging/value proposition behind the packaging. “VOSS”
represents aristocracy, class and the perception of wealth.
While these are superficial attributes of a brand it indeed
provides a value proposition to the consumer who fits the
“Esteem Needs” level on Maslow’s Hierarchy of Needs
pyramid. A brand that has a creative and powerful value
proposition that inspires and appeals to a consumer’s “hot
button” can sell a $10 bottle of water over free clean tap
water.
To promote a product, service or company it’s no longer
sufficient just providing a sound bite feature of your
offering. Your message must focus closely on what your
customers really want and value. Whatever you or your
company is promoting a value proposition is useful, if not
essential in ensuring you are differentiated in the
marketplace. Moreover, whether your audience is external
(customers), or internal (employees), the goal is to help
them “experience” the specific value your proposition
brings to them. In achieving this goal you will grab their
attention in a way that says “Your product/service appeals
to me more than anything else”.
20

21. Selected Bibliography
Brett Casella (Impact Branding & Design June 26, 2013)
Harvard Business Review (Customer Value Propositions in Business
Markets) March 2006
Investopedia
Wikipedia (Value Proposition)
Figure 1 (dcu21digitalmarketing.wordpress.com) ...................... 4
Figure 2 (Johnson & Johnson, Inc. Credo) ........................... 10
Figure 3 (nkswingle.com/voss-product-photography/) ................. 20
21

22. Andre’ Harrell
AH2 & Beyond Consulting
http:www.ah2andbeyond.com
aharrell2000@comcast.net
andre.harrell@ah2andbeyond.com
267-221-8529
22