Value proposition and portfolio management

To win in the market, you need to provide superior and customer-validated commercial value to your customers as well as effectively communicate it in your key sales and marketing channels.

In the Growth Diamond, you are here:

Value proposition and portfolio management

A strong value proposition is a key driver for growth

A value proposition is the answer to the fundamental question: “Why should I as a customer buy your product or service?” It is a compelling and tailored message about the value you create and that guides your organisation in interactions with customers and partners. It is the foundation for consistent and impactful value-based sales and marketing communication.

Over the past five years, we have seen that strong, differentiated value propositions can be a key driver for accelerated growth. We have had the privilege of being involved in 60+ projects focusing on developing and implementing high-impact value propositions for global clients. Here are some of the results:

  • Double the win rate: Global shipping segment leader doubled their win rate on tender bids, going from a 23% to a 45% win rate since project launch
  • USD 40M increase in EBIT over 9 months: Global shipping company changed their sales conversations and were able to offer a premium rate relative to the competition, which resulted in an increase in EBIT of USD 40M in the first 9 months
  • 12% increase in sales volume: Nordic logistics company increased package volume by 12% (4,000,000 packages)

However, most companies still fail to leverage the full potential of their value propositions

A recent survey revealed that:
  • 75% of companies are not able to communicate their value proposition clearly to their customers; and
  • 50% of all value propositions are not based on what truly drives value for customers
  • Yet less than 15% of companies have committed investment to redesigning their value propositions
  • Looking at the increased pace of change and the need to future-proof offerings, this is simply not enough.

We have identified three critical levers to consider when designing value propositions

We believe that strong value propositions have three characteristics:

  • They resonate – meaning that that they are built on the current and future needs of your target customers
  • They differentiate – meaning that you are perceived uniquely in the eyes of your customer
  • And they substantiate – meaning that you can clearly prove the financial value you create for your customers

Strong value propositions must be designed on different levels – from an overall market promise to segment and channel-specific value propositions and even down to customer-specific messages. But how do you do that?

Companies that design winning value propositions share some commonalities

  1. They always start with a deep outside-in perspective
  2. They are obsessed with proving the value they create for their customers
  3. They create prototypes and invite their customers to participate in the validation process
  4. They focus on building the organisation’s capabilities in terms of developing value proposition
  5. And they create a shared value mindset throughout the organisation

Before you get started, you should ask yourself three questions:

  1. Are we ready to become a value-driven organisation?
  2. Are we spending our resources in the right way to market and sell our offerings with the highest possible impact?
  3. Are we developing future offerings based on customer-validated needs that are truly differentiated and that can be substantiated?

The best way to get started is to start now

What if you could deliver superior customer value and drive commercial impact? The best way to get started is now. So go ahead and test the strength of your current value propositions.

How we have helped clients develop impactful value propositions

Key account acceleration

Global shipping company

As part of a global growth strategy - customer specific value propositions towards their largest accounts were designed as an integrated part of their key account plans.

Increasing win rate on yearly contract negotiations by 5 percentage points.

Increased NPS score after yearly meetings.

Design of commercial operating model

Global furniture manufacturer

Design of new value propositions for entering B2B project sales market with focus on residential construction. Focus was on the design of stakeholder-specific value messages.

Detailed business case.

And a commercial operating model for entering new business area.

Growth strategy

Manufacturer of lab equipment

Development of growth strategy for different applications and markets.

A key element was the design of application-specific value propositions describing the specific customer value and differentiation elements.

Driver for company-wide growth (CAGR 7-8%).

Changing customer conversations

Global logistics provider

Formulation of winning value propositions that clearly state the advantage of using their services against competing options

Development of sale material to be used in customer conversations

Changing conversations with customers.

Continuous growth since launch.

Winning large tenders

Global service provider

As part of growth strategy, several new differentiators were identified with the purpose of increasing the win rate on global tenders. The differentiators were clearly proving a superior customer value, which was communicated as part of RFP’s.

Increase of win rate from 23% to 45% on global tenders.

Product launch

Global paint manufacturer

When launching a new solution – a commercial launch strategy was developed. Key elements were a segmentation of customers and identification of future positioning, including segment-specific value proposition and market communication material.

220% sales performance compared to the initial launch forecast.