Value Proposition Matrix

Everyone is in sales

You have to capture attention with a succinct statement about the value you aim to deliver. The statement can be a verbal, graphic, or kinesthetic (as in tactile, auditory, musical, experiential). Try to be precise with numbers–how much; how many; what percentage…

Defining your value proposition is like catching a monkey by the tail. To help you with this elusive task, I have created the Value Proposition Matrix.

The idea is to focus on the criteria that have importance (left hand column) and evaluate them by who determines their value (top row). I have set out the matrix, reading from left to right, from production to use, but you may want to start on the right to be sure what kind of experience you are aim to deliver to your customer.

Your criteria may be somewhat different, so make sure that you are evaluating the right ones for you. Then you will test their strength or importance right across the value chain. You can even give the values different weights. For example, if ‘time’ is a complete prerequisite for the customer, then it should carry more weight than for other people in the chain.

Value Proposition Matrix

 

Supplier

Partner

Producer

Channel

Buyer

User

Price

 

 

 

 

 

 

Time

 

 

 

 

 

 

Convenience

 

 

 

 

 

 

Functionality

 

 

 

 

 

 

Originality

 

 

 

 

 

 

Style

 

 

 

 

 

 

Benefit

 

 

 

 

 

 

Effort

 

 

 

 

 

 

Ease            

Access

 

 

 

 

 

 

Security

 

 

 

 

 

 

Emotion

 

 

 

 

 

 

Ethics

 

 

 

 

 

 

Reputation

 

 

 

 

 

 

You can only deliver powerful value to your customers if you ensure that value does not dribble between the slats that separate each stage of the value chain. There needs to be strong alignment between all the people who impact the delivery of the final product to the customer. This matrix is designed to show you the weak and strong links in the chain.

Competitive offers

You can replicate the process with all the competitive offers you can identify. You will sharpen your own value proposition, by comparing its relative performance against others.

When I set up my main business in the eighties, we had a difficulty in doing this competitive analysis because we were offering something in the relatively empty waters of the ‘blue ocean1‘ rather than in the crowded ‘red one’ full of sharks and blood. However the clients’ dollars were nonetheless being spent; the budget heading had numbers in it and other means were being used to satisfy the demand. If we had pretended that what we offered was unique and had no competition we would have been deluding ourselves. Every offer has a counter offer.

You will have to be able to say something like, “Based on the economics of roll-to-roll printing, our mission is to deliver the most cost efficient solar electricity,” which is the value proposition of Nanosolar.

 


1. See the wonderful book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant.