Your value proposition: critical to your business survival

As a part-time university instructor, where I teach business strategy, business analysis and accounting I am always reading up on related topics. A few weeks ago, I came across an article by Clayton Christensen, which makes the prediction that, of the ~4,000 colleges and universities in the United States, half of them will no longer exist in the next 10 to 15 years.[1]

I started thinking about what makes a strong value proposition in a world where technology is continually changing and consumers buying habits are evolving. How do companies transform their business models to remain relevant? Best Buy now sells everything from electronics to baby clothing, Amazon launched a debit card, Walmart delivers fresh groceries to individual homes, the University of Aspen offers its degrees for a monthly fee. And then you have those who haven’t been able to adapt, such as Toys R Us, which is closing down in the US and the fate of Canadian stores is still being evaluated. 

The world is full of choices, therefore organizations must have a viable and adaptable business model. Equally as important, they must be able to effectively articulate their value proposition. There are several ways to look at it: from the customer, employee and management perspectives.

Let’s look at the external view first. The customer’s perceived value is the most influential to your organization’s success. The more quickly a customer is able to determine the value your company brings them, the more likely they are to consider your product or service. They must be able to quantify how much that value is worth to them. If your prospect is unclear of that value, or can’t attribute a fair cost to it, you will lose them to a competitor.

From an internal perspective, there are a couple of ways organizations typically look at the value proposition. Employees across the organization must be able to understand and explain the value proposition vis a vis the competition. However, it also must make financial sense to the organization. Key questions management should ask include:

1.    Can our employees easily express our value proposition in an elevator pitch?

2.    Are our prospective customers valuing our offering and buying it?

3.    How easily can competitors replicate our value proposition?

You need to do find ways to differentiate the value you bring from that of your competitors. This goes well beyond simple marketing and positioning. It goes to the core of your business – it’s what you offer your customers at a price they are willing to pay for it. From top-level executives through to front-line employees, everyone must be able to effectively communicate that value to your customers and prospects.

As competitors shift and your customer buying behaviours change, your organization must be agile enough to quickly adapt, including modifying your value proposition.


[1] Hess, A. (2017, November 15). Harvard Business School professor: Half of American colleges will be bankrupt in 10 to 15 years. Retrieved March 20, 2018, from

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