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A clear vision is crucial for growth

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Professor Thomas Lawton from The Open University Business School looks at a value proposition and how they help connect with your customers

A clear vision is crucial for growth

Start up’s often struggle to articulate their value proposition and to be clear about what exactly their value proposition is for a number of reasons.

 

The first reason is definition in a sense.  What exactly does a value proposition mean?  To me, a value proposition is where the customer connects into what the company is trying to do or trying to provide or why they’re in existence.  So it’s how do you add value to a specific customer or a client in the market?  And what are you giving them that is better than, differentiated from, the alternatives that specific customer has in that particular market place?

 

From that one needs to think about, as I said, the issue of clarity around why are they in that particular market and what it is they’re trying to articulate.  I would say that the reason why they don’t do that very well at the very beginning is firstly they’re trying to stay alive. There’s that focus on the immediate. There’s that focus on the paying the bills, paying the payroll, ensuring that they’re just keeping the wolf at bay.

 

Secondly, there is a lack of interaction often with the market.  So for a start it’s crucial, I believe, that you have a vision and a mission which are clear, sharp, specific to you, what you’re trying to be, where you’re trying to get to as an enterprise.  Secondly, I think you have to have a business plan, a business model, which is fit for purpose and which actually shows a way to profit – a journey towards profit over the next three, four, five years or however it may be.

 

The value proposition is something which comes in between in some senses in that it is only really when you go out into the market, test your product or service against the intended customers with competitor contestation happening at the same time, that you can get a real sense about what is our value proposition? Which customers are taking this up, which customers are really attracted in to us by this value proposition and how do we reconfigure that because you will need to reconfigure it.  Whatever you’re thinking from day one, by day one hundred, or day three hundred, is going to be very different once you have tested it in your intended market place.

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