“Everybody is ignorant – just on different subjects”

Will Rogers

At the start-up of every business and the creation of every brand it is likely that a Value Proposition will have been carefully considered and clearly defined. However, organisations change. They grow opportunistically as well as strategically. Which is why regular re-evaluation of the Value Proposition ought to be a fundamental discipline for every business. So when was the last time you reviewed your Value Proposition? If you haven’t taken a fresh look at it for a while, then there couldn’t be a more important time to do so than when faced with the worst recession for decades.

A Value Proposition should define the unique essence that a business or brand delivers for its customers. It should explain the competitive advantage – why customers want to buy from that organisation rather than another; and it should be easy to understand and clearly evidenced. Organisations who build brands understand the importance of a strong Value Proposition better than most. Yet it is a constant surprise in my discussions with client companies, from SMEs to the biggest corporate organisations, how rarely Value Propositions are reviewed and reassessed.

We all recognise that the speed of business change is accelerating and that being responsive and dynamic are valued business attributes. So, even assuming that a Value Proposition is strong (and far too many aren’t), it needs to evolve with the business. Ideally it should be reviewed at least every three years but also whenever there is significant change in the business or the market. Even if this appears to be something of a post-rationalising of the Value Proposition, the alternative is to carry on running a business without stopping to consider why customers are buying from you – or more importantly… not!

From my experience, most business leaders (at least when pressed) will acknowledge the importance of understanding their Value Proposition. However, that understanding is rarely as common or as up-to-date as the business leaders might like to think.

The endemic neglect of Value Proposition is even more surprising when you understand the exceptional value of the reassessment process itself. When I run a Value Proposition workshop, it is not uncommon at the outset to find that board members will define their Value Proposition in strikingly and occasionally disconcertingly different ways. However, identifying this invariably stimulates a very valuable debate that results in a much clearer, shared vision of the business and its potential. It is always a valuable and stimulating exercise for a business leadership team.

Value Propositions are not only relevant at business and brand level. Individual products and services, and even specific corporate projects such as HR and change programmes can benefit from a clearly articulated definition of the Value Proposition they deliver – whether it be for customers, staff or shareholders.  Propositions can also address both strategic and tactical ways of delivering value. Strategically the core of a Value Proposition should evolve rather than change suddenly and radically. However there are times when a Value Proposition can be modified tactically to respond to short term needs and market changes – and the current economic climate is a perfect example.

One of my clients is a financial services company in the automotive sector. Its Value Proposition has been that it makes buying a car easily affordable because of the competitiveness of their finance products and the ease of the application process at the point of car purchase; and this is supported by a secondary offering of related insurance products. In the current market they are simply changing the emphasis within the Value Proposition from finance to risk protection. Now their message concentrates on making a car easily affordable by reducing the financial risk and uncertainty – protecting a customer’s investment in a significant asset and their extra financial responsibility through asset and credit protection insurance that safeguards against the financial repercussions of redundancy or accident. The result is that while the market for finance is falling, their insurance sales are strengthening.

Taking time to re-evaluate your Value Proposition now might appear an unnecessary distraction and expense at a critical time. However, four key reasons make it essential.

1) Responding to changing customer needs

In such extreme economic conditions, customer requirements have undoubtedly changed as they seek to reduce expenditure. Added value becomes less important as buyers become prepared to downgrade or focus on essentials – which can lead them to switch from the comfort zone of higher priced brand leaders to lower priced or challenger brands. Competition becomes keener as price grows in importance and decisions become short-term.

Despite this emphasis on pricing, value will remain important, especially as a differentiator; although customers will have new priorities by which they define value. For example: versatility can become more valued than specialisation; reliably acceptable quality becomes more important than buying the best; function becomes more desirable than fashion. The perceived value of any given proposition can change significantly in such a market.

2) Saving money by ensuring marketing investment is cost effective

In recession, even if your advertising and marketing activity is heavily reduced, it is still likely to be a significant business cost and getting the best possible return becomes even more important. Just delivering less of the same messages you did a year ago is not likely to be cost-effective in this abnormal market. By reassessing your Value Proposition in response to this new economic climate, you can ensure that your marketing and sales messages are clearly focused on a valid Value Proposition for the current market and deliver what is important to your customers right now. It will ensure that you are not wasting money producing sales and marketing collaterals and buying media that is simply delivering the wrong messages to the wrong people at the wrong time.

3) Energising and refocusing the leadership team

With the right help, the Value Proposition reassessment process is an invigorating experience for a business leadership team. It will challenge preconceptions; force the business to look outside of itself and see itself through its customers eyes; identify differences and create a common understanding of direction and objectives; help to guide and benchmark business strategy; enable the business to assess itself against market opportunities and competitor strengths; and it will re-energise and re-focus the executive team involved in the process. Although it demands an investment of key people’s time, and should ideally be guided by experts who will facilitate the process, contribute vital objectivity and help to articulate the outputs, it will probably involve less time and expense than might be expected. The ROI is usually instantaneous.

4) Improving staff engagement

Staff, and especially senior management and sales teams, are more engaged when there is a clear understanding of the Value Proposition. If you as business leaders don’t understand or can’t clearly articulate it, how can your staff – and what message is your sales team likely to be delivering? Achieving effective engagement with your employer brand is never fully effective without your staff sharing a clear and common understanding of its Value Proposition.

So how do you establish whether your Value Proposition is strong and clearly understood? Start by considering the following questions for your organisation. If you and the rest of your leadership team were asked individually to define your Value Proposition…

a) Would there be a document that you could refer to which defines it – and if so, how long ago was it last reviewed?

b) If not, how easy would it be for each of you to individually write down a clear and concise definition, and how closely aligned would your individual definitions be?

In the States they have a typically up-front approach to these questions. They call it the elevator test. It’s based on the premise of being asked by a stranger in an elevator about your company. You have from the ground floor to the top floor to explain what it does and the value it delivers for its customers? If you can’t do it without hesitation, or you’d need to be in the Empire State Building to have time to explain it, then you’ve failed.

If this thought makes you head for the stairwell for fear of being accosted in a lift, then its time to starting thinking about your Value Proposition and calling on some expert help to review it, articulate it and disseminate it. Do it now and you’ll be taking a positive and pro-active step to steering your business through this recession.

“No passion in the world is equal to the passion to change someone else’s draft.”
HG Wells

Whilst English rugby fans have been amused by the slightly arrogant reaction of New Zealanders to the RFU daring to use black as the colour of their change strip for the world cup, I think the bigger issue has been missed. Why are England once again introducing another new shirt design? Whats wrong with the purple one or the grey one? The answer is of course MONEY!

I appreciate it has been going on with soccer clubs for years and that rugby clubs are now on the bandwagon. Now the RFU are exploiting the support of loyal England fans by asking them to buy yet another expensive shirt. The attitude is summed up by the number of clubs and associations that are now starting to use the term ‘customers’ rather than ‘fans’ or ‘supporters’.

Sports clubs and governing bodies need to realise that to develop long term support and increase their fan base they need to build loyalty not exploit it.

Welcome to the Words and Images Partnership Blog. We’re going to use this blog in lots of different ways; all of which we hope you’ll find informative and enjoyable. We’ll pass on some hints and tips about things we’ve learnt. We’ll raise questions and even ask for comments about things we’d like to know (such as when we want to hear your opinions or test reactions to something).

We’ll also be talking about things that are important or of interest to us. Usually these will be related to design, digital marketing or communication – what we do. But sometimes they may be more general or just something we found amusing – like great quotes which we’ve come across. And, of course, there’s sport, which we’re mad about – so expect the odd comment on sporting topics (and especially grass roots community sport).

NB We normally hate acronyms but still often refer to ourselves as WIP. So we’ll be calling this the WIPblog for short.

It’s easy to forget that digital marketing (or web marketing or online marketing or whatever you want to call it) is a relatively recent phenomenon. That it has rapidly become the single most significant element of the marketing mix for many organisations is beyond question. But it is also easy to focus solely on this new phenomenon and forget the rest. Even more dangerous is forgetting that the lessons learnt over decades of traditional marketing are still relevant and can, be applied to the new digital technologies and communication media.

The new kids in the business, who have been playing with this new technology at home and in their colleges and universities, are bringing great new ideas and fresh thinking about how technology can do things differently – and often in really exciting new ways. But we think you need to be careful not to get carried away with the web and the latest sexy digital stuff; unless you’re sure of its business value, where it fits and that it will get better results.

We believe that businesses should embrace the new opportunities available from new digital marketing technologies – and we help them do that. But we advise our clients to also focus on using them as part of holistic brand, marketing and communications strategies. We try to think about how the audience (customers, staff and other stakeholders) want to engage with our clients and try not to force everyone to engage with them digitally if they don’t want to.

So what am I trying to say? Firstly, web/digital technology is exciting. It is critical to adopt and use it effectively wherever appropriate, but it would be dangerous to ignore everything else or treat it in isolation. Secondly, do the new kids who understand the technology also understand marketing? At the risk of sounding like a grey haired marketing dinosaur, the best digital marketing is based on harnessing the latest technologies and blending it with proven marketing experience to deliver cost-effective marketing results.

For information on our digital marketing services – click here.

Writing is no trouble: you just jot down things that occur to you. The jotting is simplicity itself – it’s the occurring that’s difficult.
Stephen Leacock