Value Proposition – The Big Lie

Value Proposition – The Big Lie

All businesses, but especially small and medium businesses need a unique value proposition to compete effectively in the marketplace. Market leaders can be categorized as technology leaders, cost leaders and more, but a high tech or low cost solution that simply does the same as a bevy of other players will have only short term success at best.

Value Proposition Example

What is necessary for long term success in a market is a unique value proposition with products that support that position in the marketplace. Take for example, Starbucks in the 1990’s. Starbucks accounted for one third of all coffee bars in the United States. They provided a commodity that had been around for a very, very long time. They poured water over beans and charged around $80 per gallon. Starbucks made a concerted effort to provide unique value to the consumer to support their high priced coffee drinks.

How could a new coffee shop charge more for a commodity and be so wildly successful? They created a unique value proposition to the consumer. The value proposition, which they termed “Live Coffee,” centered around sustaining the culture and keeping alive the tradition of a coffee break. They attempted to maintain consistency and excellence with their product by controlling the variables in their product at all points. They purchased green coffee beans and oversaw their roasting. The shops were kept clean and had a trendy appearance. Baristas offered a smile and customer intimacy by allowing for customization of the beverage and your name written on the cup. Coffee was cool again… but more importantly, the coffee experience provided a unique value proposition to their consumers that made a coffee break a regular part of their daily routine.

Value Proposition and The Big Lie

Everyone would promote their coffee using words like hot, fresh, rich aroma, or even friendly. These words are what we, at Marketplace Consulting Group, call “The Big Lie.” These are words used to describe your product, service or experience that are the same as everyone else. You say the same thing, essentially, as all your competition. In a country that is bombarded with advertising, these words simply fly right over the heads of consumers and create no traction.

The process of creating a unique value proposition is an exercise by which you determine what is your sweet spot and niche. You overlay that with what your competitors are telling the marketplace. Eliminate the substantive words that are common between competitors in your space and avoid them. Developing a unique value proposition to your customers in a market position of leadership that you can sustain is a good brew for success.