Companies often come to us wanting to generate growth, but don’t know where to start. We are often touted for our work with T-Mobile U.S. as the quintessential example of how to generate incredible growth in a mature, competitive market. But many companies that we work with are not in the same situation – they do not need to, or are not able to, completely reinvent their entire business. However, almost all of our clients do come to us with a strong, solid business that needs to identify and capture new growth opportunities.
Regardless of where a company falls on this spectrum, given today’s agile landscape, we believe that strong leaders need to apply a ruthless focus on underserved customer needs and quickly develop new offers and experiences that deliver on these needs through pragmatic, high impact go-to-market strategies.
In the articles that will compose this three-part series, we will describe three unique tools that we have been using to capture business growth in a pragmatic way; the first of which is the customer value proposition.
Why is a Value Proposition Important?
At its core, a value proposition is developed when a company has a desire to capture customer-led growth but lacks a compelling reason why a certain target should buy from them vs. the competition.
More specifically, a value proposition is developed for a specific target customer, unifies how a company (or a line of business) creates value across product, service, experience, channels and other business levers, and identifies the necessary proof points to bring it to life. More importantly, a value proposition should be customer-led. So, before you decide whether you need a value proposition, ask yourself the following questions:
- Do I have a well understood customer segment?
- Have I developed strong insights about their motivations and needs?
If the answer to the above two questions is yes, it’s time to develop a value proposition, starting with thinking about all the possible levers that impact your target segment.
The Components of a Brand’s Value Proposition
The key touchpoints consumers have with your brand are the components of your brand’s value proposition. Optimizing them will drive growth, but some will be more important to focus on than others. A company may already have a very strong offer in some areas, so they will not require a lot of change (i.e. we have a great product). But others will require significant adjustments (i.e. we need to reach out to our segment via different channels), while others may not be relevant at all.
A Real-World Value Proposition Example
An example of this is a recent project Prophet worked on with a leading insurance company in Latin America. It had a great product aimed at a specific socio-economic sector, which was selling well through a defined marketing approach. It wanted to expand this product into a new segment with the same socio-economic level but different work environment or industry. To appeal to this new group, it was clear that certain aspects, such as the product and price, did not need to change, but other pieces did. So, the company developed a channel strategy that would allow it to penetrate the new industry, a marketing model that was adapted for the new environment, and a messaging strategy to promote the product to a fresh audience.
As illustrated by this example, the key to driving growth in a pragmatic way is to identify which elements of the value proposition bring value and which need to be reinvented. Then focus on leveraging the ones that will have the most impact on your target audience.