Value propositions: 3 classic ways (+ 1 bonus way)

Everybody in business tries to be attractive to the market. That means that people need to see a certain VALUE in your proposition. A famous model by Treacy & Wiersema highlights the three default “types” of value (value propositions) that you can offer the market.

The value of the first option is obvious: tons of people appreciate a low price. The value of the second option is also obvious: tons of people appreciate superior products, even if these were more expensive than alternatives. The value of the third option has been rising over the past decades: people appreciate firms that cater for individual interaction, and/or general ways of approaching the market that are perceived to be better than others.

A bonus idea of bringing value (not part of the Treacy & Wiersema value propositions) is to make the transaction itself more attractive – to reduce the barrier to close the deal with you. You could for instance offer a bonus, a guarantee, or credit (buy now, pay later). This differs from the value options above, but it is obvious that such options are appreciated as well.

Now I can see what you’re thinking: hey, nice ideas, I’m going to bring ALL of that value. But there is a trade-off in two related ways:

• Assuring whichever type of value will cost you money (either additional costs, or margin concessions). Beware that your income potential is not wearing too thin.
• Spreading your benefits over several value propositions may erode what the client sees of it. If you do it all a bit, there will most likely always be parties that are cheaper, have the better product, the better ways to relate to the market, or the more interesting transactions. If you try to go for all, it may make you mediocre.

Your benefit is that you can now more deliberately try to experiment with and balance the options.