A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition replies to question asked by the client: “Why should I buy from you?”
Creating a value proposition is a part of business strategy. Kaplan and Norton say "Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation."
Developing a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to its customers, prospective customers, and other constituent groups within and outside the organization. It is also a positioning of value, where Value = Benefits - Cost (cost includes risk).
Knowing your client
1. Discover the expectations and need of the customers. Study, what kind of solutions are available to the customers at the moment
2. Define the target groups, where you can be in the leading position.
3. Design your value creation process
Jim Collins in his book „Good to Great“ about hedgehog concept:
1. Know your true interest
2. Select your target group so that you can be the best in value delivery
3. Motor generates enough Money for sustainability