Value Propositions Help a Business Succeed

Date Added.: Feb 5, 2011;

In a separate article, we emphasized the importance of developing a unique customer value proposition that will be the focus of your business. Businesses succeed by satisfying their customers and customer value propositions help you identify and communicate the superior satisfaction that you provide for your customers.

We also mentioned that value propositions will remain empty statements unless you manage to deliver the promised value to your customers. Doing this effectively and efficiently requires the coordinated and motivated efforts of many other constituents. And the performance of these constituents can be enhanced substantially if you develop value propositions for each group, and organize to deliver these values also.

Stakeholders in Your Business

Even though you might see yourself as the sole stakeholder in your business, the fact is that several other groups have a stake in the success of that business. The value proposition examples below should make this point clear.

The customer value proposition articulates how customers will benefit better by doing business with you
The employee value proposition will convince prospective employees that they will benefit by working with you. For example, you can create an environment in your company that nurtures talent and helps your employees develop their capabilities, in addition to enabling superior contributions that are recognized and rewarded
The supplier value proposition has the potential to create loyal suppliers who will give preference to your needs even in times of tight supplies because you help them reduce their costs and pay them in time, for example
The partner value proposition will motivate partners to put in their best while working with you because you have taken care to help them succeed, say by providing the key inputs needed for such success
The investor value proposition can help attract external investors if you keep them constantly informed about developments in the business and provide them attractive returns on their investments

There are other stakeholders in your business, such as the government that receives taxes from you, lenders who are confident that any loans they extend to you will be repaid in time with interest and the public who finds that you take pains not to damage their quality of life through pollution or dumping waste products in the neighborhood.

In each case, if you look at what is valued by each stakeholder and how you can fulfill their expectations, you can come up with ways to provide value to them. And doing so can make it far easier to run your business effectively and efficiently compared to constantly fighting with each group. It is best to document your ideas in value proposition statements for each group so that you can monitor their implementation and improve upon them based on feedback.

Incidentally, by developing value propositions for all the stakeholders in your business, you will also be to come up with a business model that can compete successfully for resources in the market, such as talented employees and investor funds. That alone should prove worth the effort.