Value Proposition Examples: the Good, the Bad, the Ugly

Continuing from my last post, writing a strong value proposition is critical to communicating how your product or service is relevant to your customer segment. Now, there’s the easy way and the right way to write a value prop. The easy way is to craft one in half a day that is written well and sounds good, but that doesn’t include any specifics. The right way is to first gather quantified data which proves your value to your customer. From my experience, this is by far harder than the actual writing because you need to be able to make a claim against the competition that you can legally stand behind.

One grand example is Larry Ellison’s announcement in 2001, that Oracle saved $1 billion by implementing its own solution across the company. The easy way would have been to say “Oracle’s solution saves customers time and money.” Not very exciting. But in typical Ellison fashion, he went big. Think about how much resource and focus needed to be dedicated to be able to say four words “Oracle Saved $1 Billion”. He put the entire company behind making that claim. Was it worth it? Absolutely. Was it painful? Most probably.

Let’s take a look at an example of a weak and a strong value proposition.

From McKinsey’s Corporate Finance Site

Our value proposition rests on an unrivalled package of strategic, transactional and financial advisory services, uniquely linked with independent judgement and deep industrial/commercial insight.

Our reward is not “transaction-based”, so we can maintain genuine objectivity in our client’s long-term interest. In negotiating and carrying out an engagement for a client, we participate fully in the client’s corporate thinking, and take into account not just the immediate value and impact of the project, but its context and implications over a longer period of time.

 We work closely with management and other advisors, such as major investment banks, to leverage and complement their knowledge and ensure maximum impact. We try to foster senior management’s commitment to our recommendations and actively support implementation and skill building.

Analysis

  • Above is the type of statement I often see passed off as a value prop, but it really falls somewhere between a mission statement and a description of capabilities. It’s very difficult to write a general value proposition that is not targeted to a specific audience and does not contain examples.
  • It’s missing a quantified value. This could have been added in the form of an example or a claim such as “Our services have demonstrated an average of 20% ROI improvement.”
  • It’s also missing a competitive differentiator. How is this approach better than any other consulting company?

Result: not a value proposition. It does succeed at describing what sounds like it might be relevant to their clients, but it’s missing any quantified results or competitive advantage.

How would we make it better?

Gather the data

  • Brainstorm with the right people in the organization and list as many quantified factoids and data points as possible. (eg. saved xyz customer 20% in operations. Cut time-to-market in half from two to one year.)
  • Run all of these data points through the sieve. Are these defensible, sourced? Are they actually better than something the competitor could do?

List competitive differentiators

  • Create a list of the First, Best, Most, and Only claims your service or product could make.
  • What capabilities do you have that your competitor doesn’t?

Make sure it’s relevant

  • Talk about what you have done for customers, how you understand their industry.
  • Are the values you are citing helping them improve their business by:
    • Increasing revenue
    • Decreasing cost
    • Speeding time to market
    • Improving agility (ie time to react to market changes)
    • Making better use of resources (ie requires fewer people to accomplish something, or resources can be reapplied to more strategic areas)
    • Providing better customer service for their customers
    • Improving organizational intelligence and insight
    • Improving accuracy of forecasts, predictions, market conditions
    • Reducing the burden of compliance

Good value proposition example from VMWare

For IT organizations wrestling with the high cost and inflexibility of the old “one server, one application” model, VMWare can improve the efficiency and availability of IT resources and applications through virtualization.  About 70% of a typical IT budget in a non-virtualized datacenter goes towards just maintaining the existing infrastructure, with little left for innovation. VMWare can free your IT admins from spending so much time managing servers rather than innovating. An automated datacenter built on the production-proven VMware virtualization platform lets you respond to market dynamics faster and more efficiently than ever before. VMware customers typically save 50-70% on overall IT costs by consolidating their resource pools and delivering highly available machines with VMware vSphere.

Analysis

  • This value proposition starts by describing the target customer’s problem their product solves
  • It quantifies the problem: 70% of an IT budget spent towards maintenance
  • It describes the benefits of implementing a virtualized data center
  • It offers a range of IT cost savings from their typical customers
  • The only thing it doesn’t do is offer an advantage over the competition. However, it is using the non virtualized datacenter as the alternative in this case.

Result: This is a good value proposition. Even though it didn’t go into the competition, it called out the customer problem the product addressed, described how it addressed it and offered tangible and relevant results.

If you would like my analysis on your value prop and don’t mind public scrutiny, send it to me and I’ll take a look.

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33 Responses to “Value Proposition Examples: the Good, the Bad, the Ugly”


  • Comment from Laura Lee

    Alex,
    This is a REALLY good read!!
    Will definately bookmark this.
    Cheers,
    L2

  • Contrary to popular belief article marketing imposes competencies which are not so easy to learn and make money from; say for example a keen sense for discovering hot sources of targeted readers.

  • [...] Value Proposition Examples: the Good, the Bad, the Ugly – B2B Marketing Stories [...]

  • Comment from Gary Ares

    Your writing is superb! Clear, to the point, and sharp as a razor. I just recommended your 2 VP posts to my Execs as they are very interested in getting this critical piece of the messaging correct. Again, well presented, without extraneous fluff, and with 40% more clear examples (just pulling the chain).

  • Comment from Gemma

    Hi… Learned a lot….I am working on my value proposition for my outsource contact centre.. and with your guidance I have penned my value proposition….Will you please check and give me your feedback….thanks…

    “Customer Service is essential to any company that claims share of the market and any company has to be able to deliver this service better than the competitor. Adding a measurable value to clients by collecting critical business intelligence that increases the customers dependency on the company’s services and products. Switchboard Contact Center can support the organization increase their competitive edge, while reducing 50% of their operational expenses and cost per call to deliver better and more profitable customer experience.”

  • Comment from rachel

    I am attempting to write my value proposition. How does a new Financial Advisor with no experience but who’s working for one of the largest brokerage firms go about writing a value proposition? Do I focus mainly on value proposition of the company I work instead since I have no experience to brag about yet? Thanks for any advice because this is a very difficult task!

    • Comment from aflagg

      A value proposition sounds like a formal statement, but it’s really as simple as a claim that your audience (whomever that is) finds of value. It can be from you to another individual, a parent to a child, a corporation to a customer. The promise has 3 main elements.
      1. a claim that can be quantified against something, either growth, savings, or comparison against a benchmark or competitor.
      2. unique
      3. relevant

      That’s it!

  • Comment from aims

    Hi,I’m attending my 1st marketing class and the Prof.has asked us to submit an example of a value proposition. Help,I’m clueless! Need guidance
    Thank you

    • Comment from aflagg

      Sorry, my reply is probably too late for your class. Read through my older posts. Good example there.

  • Comment from Rose

    Hi,
    You have been very helpful. I am working on a proposal for my company and always have difficulty to pen a strong VP (because of my tendency to write it in lengthy). I have benefited much out of this article. Thank you.

  • Comment from Charles Stack

    Hi, Alex, that is great advice! I’m pasting a Value Proposition for our new cleantech company (algae biofuel), please let me know your thoughts. Best, Chuck Stack, VP of Neochloris Inc.

    —–
    For large-scale generators of carbon dioxide including power utilities, refineries and other industries, Neochloris Inc. offers a breakthrough technology to capture these greenhouse gas emissions and convert them into algae biofuel. The Neochloris process has been demonstrated by the University of Illinois to require much less land and produce far greater quantities of algae biofuel than our competition, and the Neochloris process can be built in any location, regardless of climate, latitude and sunlight availability. Neochloris Inc. provides all major carbon dioxide emitters with a robust tool to maintain compliance with regulations, reduce greenhouse gas emissions and generate cash flow from the sale of drop-in biofuel.

    • Comment from aflagg

      I’m not an expert in your area, but I would make sure you have some sort of quantified value/ comparison in your claim.How much less land? How much more can you produce? How does this translate into cost savings or revenue?

  • Comment from Chris

    I’m using your suggestions to rewrite my LinkedIn summary. I’m a job seeker so my primary service is my know how. Verbalizing my value proposition in the manner you described sounds a lot more effective than copying stuff from my resume.

    Thank you for being clear!
    Chris

  • It?s really a great and useful piece of information. I am happy that you simply shared this useful information with us. Please keep us up to date like this. Thanks for sharing.

  • Comment from Judy Caroll

    A value proposition is very important to our business simply because it’s a key phrase that will tell our customers what value they will get for doing business with us. There are several businesses who are still guilty of creating broad messages that people find hard to understand. Our value propositions should be clear, concise and simple. Thanks for all the tips you have here. All the best.

  • Comment from Julia

    Excellent explanations. Now I see why it made the top 3 on my Google search

    I value this proposition :-)

  • Comment from anita

    sounds like a positioning statement. what is the difference between the two?

  • Comment from Anushree

    B2B Marketing has totally evolved over the years as correctly pointed out here & it is more important than ever to have some value proposition in your offering. Here’s another expert article from the Marketing Head of Nokia Siemens Networks on B2B marketing & its evolution: http://www.strategycentral.in/evolution-of-b2b-marketing/

  • Comment from Allison

    Thank you – excellent piece and I appreciate the examples of “needs improvement” and good value propositions. Elements listed are very helpful.

  • Comment from Joyce

    Hi Alex, can you give soem suggestions on the value proposition for our team? (ver 1 we are currently using, I’m still working on ver 2, and any insight would be greatly approeciated.

    1. The [team] has over 80 years of combined financial services experience. We offer holistic individually tailored financial solutions to high net worth professionals, business owners and retirees. Our experience, integrity and proactive service instil confidence in our clients that we are acting wisely on their behalf. Our clients have peace of mind knowing that we will bring in specialists to ensure that their dreams and goals are being realized.

    2. For small businesses, doctors, and business professionals, we create time in your busy schedule by helping you to simplify your financial picture. We become your first point of contact for all your financial and banking needs. In an independent survey, our clients have consistently given us a 4.6 out of 5 for overall satisfaction. We help you reach your retirement goals by guiding you along the road to peace of mind and financial freedom.

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  • Comment from Jim

    How would the process of defining a value proposition be started if your product is process improvement that might be applied to multiple types of manufacturing businesses. We are trying to start up a network of businesses that would allow one manufacturer’s waste to become an input to another manufacturer’s product. The value as we see it, is reduction in waste generation (and disposal costs) and in the comparative cost for recycled materials compared to virgin materials.

    • Comment from aflagg

      Jim, Thanks for your comment. A value proposition is simply making your selling pitch as relevant, quantified and differentiated as possible to your audience. So think about first who this message would be targeted to, what are their drivers and how your reduction in waste material would be interesting to that person. I find the best way to do this is put yourself in their shoes and think about what would interest you most.

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