As someone who has helped startups with their business plans I understand that to capture the interest of the investor community it is hugely important to articulate your value proposition right from the start. Clearly representing the problem or need you address for your target market, listening to your target customers and understanding how you will drive revenue growth is essential to ensure you get the kick-start of investment you need to scale your business.
Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.” Robert Kaplan and David Norton (Strategy Maps)
Business plans typically only get shared with a targeted group – generally the leadership stakeholders and potential investors. The continued articulation of the value proposition within the company, especially as the number of new employees grows, can be ad-hoc at best.
A company that has captured initial investment through a clearly defined business plan will move quickly to focus on the execution of this plan – hiring engineers, marketers and sales personnel. As time progresses and they learn more about their target market they may change their initial corporate strategy and re-evaluate their initial hypotheses of what the customer needs. Somewhere along the line their “internal” value proposition changes but often this is not captured or re-communicated clearly to everyone in the organization.
Once the company begins to execute the business plan different dynamics can occur across the organization.
- The background and focus of the engineering team means that they will generally position the product from a technical standpoint, often failing to understand or demonstrate the “business value” of what they are creating.
- Marketing will battle to understand the technical complexities of the product and might fail to create compelling positioning material.
- Sales will struggle without a clear view of the target market, the value the company brings or the product’s unique selling points.
Without a defined value proposition the company will struggle to position the product and potential opportunities will be missed. Articulating your value proposition across the organization allows you to:
- Create an aligned and collaborative organization that shares a common understanding of how the business will create value
- Ensure the organization remains focused on corporate strategic objectives
- Maximize ROI for corporate resources and ensure all resources are delivering effectively
- Support decision making for all employees
- Enable Sales and Marketing to clearly position the products and solutions to the target market and thereby drive revenue growth
Whether you are a startup or SME you should take the time to ensure that your“Internal” Value Proposition is clearly articulated inside your business so that everyone can clearly represent it outside your business.
Product development, sales and marketing teams are often too busy delivering current project priorities to focus on the company’s value proposition and it can be beneficial to bring the team together under a moderator to focus efforts in this area.
I have recently spent time running “internal” value proposition workshops with technology companies and the exercise has been enlightening for everyone – particularly those companies that have spent a lot of time focusing on the “execution” rather than the “strategic” part of product management.