Nov 06 2007
What Makes a Good Cleantech Value Proposition?
The term “value proposition” is widely used by businesspeople, entrepreneurs, investors, marketers and salespeople. But I find that, as with much marketing lingo, there is often confusion about its meaning.
What is a value proposition? Why do you need one? How do you construct a good one?
A value proposition is a brief statement that summarizes the value your product or service provides, for whom, by doing what. Don’t be fooled by the emphasis here on brevity. That doesn’t mean it can be dashed off with little thought.
The value proposition forms the foundation of your communications about your product or your company. It’s the backbone of your elevator pitch. It shows up in the executive summary of your business plan. It underpins all of your sales presentations, website copy, press releases, and other communications to your customers, partners and investors.
A solid value proposition that is well-understood by all the members of your team (including service providers such as attorneys, consultants, and agencies) ensures that you communicate consistent messages that reinforce one another and have greater impact.
To construct your value proposition, replace the phrases in [brackets] below with the relevant information about your product or service.
[Name of product or service] provides [value] to [someone] by [doing something].
where:
“Value” can be saving money, improving performance, increasing revenue, increasing regulatory or policy compliance.
“Someone” is a tight description of your target customer. It could be a utility firm, a manufacturing facility, businesses in a particular industry, a homeowner, etc.
“Doing something” provides a high-level description of what your product or service does.
Here’s a deconstructed example of the value proposition used by CURRENT Group, LLC for their Smart Grid Services.
Keep your value proposition succinct. Use simple, straightforward wording. It’s not about flash. Save that for the taglines and promotional copy points. Most importantly, make sure the value you describe is truly meaningful to the customers you are targeting.