CUSTOMER VALUE PROPOSITION
A business model for creating a compelling purchase motive
The concept of customer value propositions originated in the 1980s when Ray Kordupleski published his book Mastering Customer Value Management. The emphasis changed from picking out points of differentiation to determining what customers’ value.
In most markets, customers face a choice of alternative products and services. Many of these products and services fulfil similar needs. Customers need a reason to buy your product (or service) rather than any other. This reason could be tangible and logical or intangible and emotional. A good customer value proposition focuses on the main factors that drive customer choice. Keep it simple; in fact think of developing a USP.
In building a customer value proposition consideration should be given to all sources of intelligence:
• Customers and potential customers (from interviews and market research reports)
• Competitors products
• Technical staff
• Marketing staff
• (Indeed all staff)
Customer value propositions are best built in workshops where representatives of different parts of the company can come together to debate the subject. It is possible that the workshop will find that there is a current customer value proposition and one that would be more desirable (a future customer value proposition).
When developing a CVP have in mind a very clear persona of the target for your customer value proposition.
Also, focus on just one or two of the most important benefits or features of your product. Don’t present the customer with a laundry list that will dilute the importance of all the attributes.