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I was just informed by one of my colleagues that the television program Fringe (similar to the X-Files, only with less Scully and more Dawson's Creek), I am PVR-ing at home has started ten minutes late. Therefore it will end ten minutes late, and I will have only recorded the first 50 minutes of the episode. All because American Idol ran late. I am very cross.

At the heart of my frustration lies an unfulfilled and now foggy value proposition. When I signed up for the service, the brand promise was very clear: in return for some of my post-tax income, I could record shows when I was away and watch them whenever I wanted, plus the service would manage the network juggling of timeslots for me. Wicked. Now? I'm not sure what I should expect.

There's a great lesson here for SMBs. Having a simple, compelling and very clear value proposition is critical in landing net-new business. And then delivering consistently on the promised benefits will help keep customers happy.

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I want to focus on the first half of the equation here, since refining and communicating an unambiguous value proposition is tougher than delivering on it for most SMBs. Expressing in plain English the value associated with whatever you are selling is more important today, in this economy, than it has been in north of 50 years. With lower demand overall, combined with higher competition in almost every industry, and pretty good marketing techniques in use by most firms, the battle for market share is at an all time high. And customers are looking around for options like mad. If a customer doesn't understand what your organization does, in about eight seconds, you are dead.

So then the questions are:

First, how to develop a straightforward and persuasive value proposition, and then

How to articulate that brand promise effectively.

Refining the Value Proposition

Here's an example of a well refined value proposition (from Winners): "The latest brand names for up to 60 per cent off." Everyone understands it. And it's powerful.

Value propositions boil down to answering three core questions: who are you, what do you do, and what makes you special? That's what the Winners model does. There are a lot of approaches and techniques that work in getting to a clear and compelling value proposition. Most organizations use a three step process: 1. Internal. 2. External. 3. Internal. They look internally at competencies, then they look externally to get market input, and then they finish looking internally at what it all means. In the end, the process is a combination of (sometimes painful) soul searching and research on key questions.

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Note: working through the following process steps as a group typically works better than conducting an internal survey or voting on potential options. So plan to get your team together in a room for a day, offsite is preferable as it gives distance and perspective to issues you may have been dealing with for some time. Bring a flip chart and markers to record everything your team says, so that everyone can see the progress you are making.

Step 1 - Internal: Who Are You?

Answering this question should be done by the group responsible for founding and/or running the company – the Partners, the Executive Team, the Owners, etc. And it is usually through a series of guiding questions that THE answer is arrived at. Here are some examples of good guiding questions to ask (some sound insane, but trust in the process):

  • Why did we get into this business in the first place?
  • Why not shut down the company right now?
  • How would Larry King introduce us to his TV audience?
  • What are we really good at?

If we are thinking about a book publisher as an example, the answer from step 1 might be: "We got into this business because we are great storytellers. So who are we? We are great storytellers?" The founders of Nantucket Nectars love to say "we are juice guys".

Step 2a - External: What do you do?

At this point, customer feedback is important, especially if you haven't talked to a lot of customers in a long time. Why? If what you do doesn't match up with that the market is looking for, you're going to be in a tough spot in this economy. Finding customers in their own environment, and asking them questions about what they like/dislike/want/don't want is a pretty effective way to temperature-check your offering.

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Beyond customer input, more guiding questions will get your group to the answer to 'What do you do?':

  • If we had to explain our business to a 5-year old, what would we say?
  • How do we help address a customer pain point, or fulfill a customer desire?
  • What is the outcome for customers of buying/using our product or service?

Staying with the same book publisher example, the answer from this step could be: "We write great children's fiction which tackles diversity issues." Disney is fantastic when it comes to understanding and talking about what they do – they say over-and-over "we make people happy".

Step 2b - External: What makes you special?

You can't answer this question unless you have a good, up-to-date understanding of what your competitors are offering. Internet research, mystery shopping, and placing calls to a few industry professionals – or customers of your competitors – will get you enough information to know where you stand.

After finishing the competitor research, again more guiding questions will help direct traffic:

  • How are we fundamentally different from our competitors?
  • Why do/should customers pick us instead of our competitors?
  • What or how do we do things that no one else does?

In our publisher example, the answer here could be: "Our books incorporate public figures and celebrities to make the stories real for our young readers." Vitamin water does a great job of explaining how they are special right in the name of their brand/product.

Step 3 - Internal: What does it all mean?

To complete the process, most firms look at the answers to all three core questions, and then ask "so what?" To spur new ideas, two great guiding questions are:

  • In 100 years, what do we want people to say about our company?
  • If a client from overseas called tomorrow and said “hey, I hear you're the best at X”, what would X be?

In our example, the big idea answer could be: "We are the most relevant children's book series dealing with issues of race and gender." Another killer example you probably recognize is Grocery Gateway: the most convenient grocery option for busy people.

Communicating the Value Proposition

There are no rights or wrongs here, just better and worse. A simple means of articulating the value proposition is to literally put the answers to the three core questions together as a 30-second elevator pitch for everyone in the organization, and to have them form the opening paragraph of sales and marketing materials, including the homepage of your website.

Tactically, the most important things to keep in mind are related to clarity and brand alignment.


Resist the urge to complicate, flower up, buzz wordize, or otherwise degrade clarity for the sake of fancy or cute language. The more direct the language, the better. Think of Buckley's and their "it tastes awful but it works" positioning.

Everyone in the organization, from top to bottom, should be able to understand and communicate the fundamental value proposition. Everyone. WestJet does a great job baking the value proposition of friendly service into their culture.

Brand Alignment:

The substance of your value proposition had better be in line with your brand position, or you have a fundamental problem to fix. For example, if after all the soul searching you decide your offerings' benefits are associated with value, but your brand promises premium quality, you had better go back to the drawing board on your brand. For example, No Frills promises great value, and even their store layout and look deliver on this promise.

The language you use to describe your value proposition should reflect the image of your brand. If your brand is about customer service, then try to select terms – like "fast" or "thorough" or "hassle-free" which reflect your overall brand position. Koodo is doing a great job of matching language with their brand and value proposition – using terms like "fee-ectomy".

As a leader, you may feel like you are kidney punching your team to get them to the point of clarity, but the exercise in sorting out what your real value proposition is in this market, and how to communicate it, will be one of the most worthwhile you will undertake this year.

SMB stat of the month

A study conducted by SIS International Research, involving 513 SMB "knowledge worker" respondents across eight countries, found that these professionals wasted 17.5 hours/week, or 40+ per cent of their time, due to various obstacles to communication. Time wasting included: inefficient team co-ordination and waiting on information from others. The study concluded the cost of this waste would be in the neighbourhood of $500,000/year for a 100-person firm. Ouch.

Secret behaviours of SMB decision-makers (for Enterprise executives sneaking a peek here)

When asked to define "relationship with sales rep" in the context of driving purchase behaviour, SMB decision makers noted the following attributes of "relationship", in order, in a recent study we conducted:

  • Personal rapport with sales rep.
  • Level of business professionalism exhibited by sales rep.
  • Trust level in sales rep.
  • Problem solving orientation and ability of sales rep.
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About the Author
Marketing & Growth Columnist

Mark Healy, P.Eng, MBA, is a partner at Satov Consultants - a management consultancy with practice areas in corporate strategy, customer strategy, operations and strategy implementation. Mark's focus areas inside the Customer Strategy practice include consumer insights, pricing, customer experience, innovation and go-to-market strategy. More


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