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.

Operational Excellence

Make sure that you keep your production thát cheap, so you can offer the lowest prices.

Product Leadership

Make your product thát good, so you can offer the most desired products.

Customer Initimacy

Approach your clients thát effective, so you can serve the market in the most desired ways.

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.

Treat yourself to complete business understanding!
Enhance your business grip. See the bigger picture for ANY business. Get many ideas for improvement.
Go for SpeedMBA Online now: the business e-course in which you get ALL OF BUSINESS explained in 300 slides and 60 videos!

Yes, send me the FREE SpeedMBA Cheat Sheet!

You have successfully signed up for the SpeedMBA Cheat Sheet.

Yes, Send Me All Of Business in 15 Minutes!

You have successfully signed up for SpeedMBA All Of Business.

Share This