December 24

4 Perspectives That Should Shape Your View of Value Propositions

Marketing Strategy


If you think a value proposition is just a catchy phrase or the elevator speech your salesmen can spout off to customers, consider what Michael Lanning, the creator of the term, has to say.

“It should drive what you communicate, but more,” he explained. “It should be the heart of your business strategy — and articulation of how customers will be better off if they do what your business proposes.”

Three decades ago, Michael invented the concept and coined the phrase while a consultant for McKinsey & Company. I recently had the privilege of speaking with him about how this term should be applied in the B2B context. (For an overview of what every value proposition should include, go to my MarketingExperiments blog: Direct from the Source: What a value proposition is, what it isn’t, and the five questions it must answer.”)

Here’s a summary of what Michael revealed:


1. A fundamental value proposition defines the purpose of your business model.

A value proposition is  a strategic choice — agreed to by all business functions — that details:

  • Your target customers are what you want them to do in what timeframe and the competing alternatives.
  • As a result, what specific, measurable experiences these customers will get, including price. How do these experiences compare to the alternatives? This includes both superior and inferior experiences.
  • How your business improves your customers’ business more than competing alternatives.

“Your business should then be completely integrated around delivering that value proposition. Every business function should agree on it, then be controlled and driven by it,” Michael said.

However, what typically happens in practice is that value propositions are developed too late to serve this purpose.

“People decide what product they want to make, how they want to make it, and where and how they want to sell it. Then they write a value proposition to dress it up,” he said. “They should carefully choose a superior value proposition, then design and improve their products, services, and other functions to deliberately deliver and communicate that superior value proposition. Please don’t write a value proposition to help sell your product; create a product and communications to help deliver it. ”


2. Insights into better value propositions come from studying your customer.

To take a fresh approach, Michael advises stopping staring at lists of competitive features or what customers say they want and, instead, climbing into their life and business. In essence, become them:

  • Identify and deeply understand what’s happening in their business right now and what’s imperfect about it for them. Understand what they are trying to accomplish and where they fall short.
  • Think about how your products and your competitors’ products help or hinder them.
  • Imagine an improved scenario in which they derive a much better set of experiences than they get today from you or your competitors.
  • That improved scenario is the basis for a winning value proposition. Ask yourself, “If we make that scenario happen for the customer, will they see it as a superior solution?”

“Seriously, try to think like the customer. Get as close as you can to their current behavior and experiences,” Michael said. “Understand what’s happening. Define how ‘better’ would look to them — better than their current experiences, better than they could get from competitors — and then analyze how close you can get to make that happen, profitably.

“This perspective is different from trying to sell the products you enjoy making or dutifully making what customers tell you to make. It’s about creatively discovering and then profitably bringing about the outcomes they would value most,” he said.


3. A B2B value proposition isn’t a once-and-done deal. Consider the entire customer chain.

According to Michael, B2B businesses shouldn’t deliver a single value proposition to all customers your product touches or treat them as equally important. Customers at different levels of the chain have different agendas and priorities, sometimes in conflict with each other. Customers at some levels will be more crucial to the success of the business.

“With B2B, you have to deliver value and influence behavior across that whole, long, complex chain,” he explained.

The chain may begin with the immediate customer, who incorporates your product into their product that is sold to a distributor, who in turn, sells it to a final user.

“You need to think about what value needs to be delivered across the spectrum of businesses, and perhaps, ultimately consumers, that your business and its products touch,” he explains.

Then, you need to prioritize these value propositions.

“Think about where in that chain it’s most crucial for a superior value proposition to be delivered,” he advised. “With a long B2B chain, the answer isn’t obvious. It often is not the one you deliver to immediate customers, even though they literally write the check. All value propositions you deliver across the chain must support and complement the most crucial one.”


4. A value proposition is not your whole strategy — just the driving vision for it.

Your strategy comprises your value propositions and how you will profitably deliver them. That strategy should include every nuance of how your business interacts with and benefits customers across your chain. It should inform how you:

  • Provide the value proposition, such as products, services, operations, distribution and partnering
  • Communicate it, such as through sales, advertising and packaging

Everyone in your business, and sometimes your partners as well, must understand and buy into this vision and how you will make it happen.

Through this strategic, customer-focused approach, your value propositions will still inform and determine what you communicate to customers. But they will be much more — they will form the heart of your winning, profitable business strategy.


You can follow Brian Carroll, Executive Director, Revenue Optimization, MECLABS Institute, on Twitter @brianjcarroll.


You might also like

Direct from the Source: What a value proposition is, what it isn’t and the 5 questions it must answer [More from the blogs]

Michael J. Lanning’s Academic Lecture Series [From]

Powerful Value Propositions [MarketingExperiments resource]

Value Proposition: 4 questions every marketer should ask about value prop [More from the blogs]

About the author 

Brian Carroll

Brian Carroll is the CEO and founder of markempa, helping companies to convert more customers with empathy-based marketing.

He is the author of the bestseller, Lead Generation for the Complex Sale and founded B2B Lead Roundtable LinkedIn Group with 20,301+ members.

  1. @Mark Evans Thanks for reading and taking the time to comment. I agree that it needs to be understood that the value proposition needs to be known through the entire organization. Not just sales/marketing.

  2. Value propositions are ultra-important because they establish a foundation for a company to drive its marketing, sales, HR, partnerships and financing. They clearly articulate what you do and why you matter (to customers).

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