“Marketing is Everything” is the title of a famous article by Regis McKenna in the Harvard Business Review (HBR) from the mid-1980s. McKenna argues that the marketing function should be embedded in every function and activity throughout the organization, to ensure a customer perspective everywhere. As a recovering marketer I agree with this sentiment. Except not really. All too often, marketing gets lost in the tactics and the cool factor. All too often, marketing slips away from the customer benefit into a list of features, or a list of the cool people who use or design the product.
If I was to write my own HBR article, it would be called “Value is Everything”. Value propositions have recently become a hot thing, a part of the Business Model Canvas, which is a strategy design tool for startups, nonprofits and existing organizations. A value proposition is the way that an organization creates and delivers value to customers and stakeholders, using a group of products or services that deliver specific benefits to their target stakeholders. You start with a task or job that a customer needs to accomplish. Then, by looking at the pains (or problems) that the customer has doing the task, and the gains (the outcomes or benefits that the customer wants), identifying the relevant, important pains and gains, you develop a product or service that delivers value by addressing the most important pains and gains. For more on value proposition design, check out the new book, Value Proposition Design: How to Create Products and Services Customers Want, by Alexander Osterwalder, Yves Pigneur, Gregory Bernarda and Alan Smith.
I’ve recently been working with three organizations, all at various stages of maturity, all of whom have problems with their value proposition. One team believes that they’ve done the work to develop a solid value proposition, but if they have, I can’t figure out what it is in their communication materials. This might be “lost in translation” from strategy language to execution, but my bet it that the hard work of writing down a clear, concrete value proposition for each stakeholder hasn’t been done, so the value proposition is still in the founders’ heads.
The second team is much farther along, and has done an amazing job developing and promoting their organization. The only issue is that the value proposition for a key stakeholder group isn’t compelling enough (at least in my opinion). But, due to a sense of urgency, we’re going to start branding and promoting before we’ve really got the value proposition well supported for a critical stakeholder group.
The third team is the most established, having been around forever. They know their value proposition. The problem is that they don’t know whether this value proposition has any meaning to their various stakeholders, especially to the people who pay. Over time, the environment has changed, and what was once a valid, meaningful, important value proposition, may not longer be relevant.
So what’s the problem? If your value proposition addresses an unimportant job, minor pains or unessential gains, all the marketing in the world will not help your organization. If your solution is unrealistic and too complex or asks too much of the customer, the value proposition will not draw customers. My advice to all organizations, for-profit, nonprofit, social enterprise, social purpose, government, and everything in between, is to have a concrete value proposition, that you have validated, eyeball to eyeball with the customer/stakeholder. Taking the effort to do this before you write the plan will save a lot of pain. It’s better to hear that your idea won’t attract customers before you’ve spent several hundred thousand in a new initiative.
Value is everything.
Categories: Books, Entrepreneurship
Thinking is Hard Work 