For years, most business executives and writers have known and used “value propositions” (aka “elevator speeches”) and use them not only at conferences in their industry, but also more generally in daily communication. I’m interested in this post in the concept of the “value proposition” and in how thinking about the way we define ourselves can make an entrepreneur more aware of the marketing that goes on, on a daily basis, all around us.
First, in Jill Konrath’s 2009 study, Get Back to Work Faster: the Ultimate Job Seeker’s Guide for Professionals,” she defines the value proposition as “a clear statement of the tangible results a customer gets from using your products/services,” and how these results differ from other service providers. A strong value proposition answers the questions: “How can you help my business?” and “what difference do you make?” The goal should be to communicate your particular area of expertise, and not that one is “versatile” (no one wants a “well-rounded candidate” these days).
Here’s an example of a value proposition: “I help professional associations and speakers increase their memberships by 5%, and to better sell their services by 4% and to increase participation in their special events by 6% (figures quoted here are fictional, for explanatory purposes only).
An example that Konrath cites is this: “I help construction companies increase margins by negotiating contracts with large homebuilders. The companies I’ve already helped have increased gross margins from 32% to 40% in just six months.”
And here is her own value proposition: “I help sellers crack into corporate accounts and speed up their sales cycles – critical issues in today’s economy. One of my recent clients achieved an 87% call-to-appointment conversion rate, in pursuing appointments with large national accounts; resulting in millions of net new business in the following 12 months.”
Does your value proposition need some fine-tuning? Let’s return to what makes a good value proposition. To be strong, Konrath says, it must have three parts:
(1) a Business Driver focus – a focus on business issues that are relevant to key decision makers (e.g. length of sales cycles, lead generation, call-to-appointment conversion rate, etc.). In the case of the third example (above), that would be her ability to secure corporate accounts and increase the speed with which they make sales.
(2) Movement – the statement must show a change from the status quo, such as a speeding up, reducing or increasing trend. Again, from the third example, this would be speeding up sales.
(3) Metrics – statistics are always important to decision-makers. “The larger the numbers the better,” Konrath writes. Clearly the 87% conversion rate, the millions of earnings, and 12 month period of the third example (above) make it a particularly strong one.
Last summer, while revising value propositions for myself and others, I noticed that these kind of condensed statements with promotional purposes are commonly used not only at business conferences, boardrooms, and social media profiles, (websites, business cards, email signatures and so on), but also in real estate placards, commercial signage and, of course, in popular culture. It was serendipity that I was thinking about the concept of the value proposition when I watched last summer’s surprise hit, “The Best Exotic Marigold Hotel.” If you missed it, the film tells the story of a group of seven financially-disadvantaged British retirees (played by a star-studded cast) who relocate to India, to what they believe is a newly-restored hotel.
Once there, they find a building “less luxurious than its advertisements” (IMDb). Sold to them in a brochure as an “Indian palace” in Jaipur, a “luxury development,” with “arches and canopies [and] balconies,” the retirees instead find a ruin of a hotel, infested with pigeons and cockroaches, and featuring rooms without doors, failing telephones, no electricity and singularly spicy, and unusual, indigenous food. Throughout the story, Sonny Kapoor, the young owner and CEO of the establishment, struggles to promote the hotel that his late father bequeathed to him. To the particular guest who persists in whining the most and adapting the least to these surroundings, Sonny advises: “In India we have a saying. Everything will be all right in the end. . . . if it is not all right, then it’s not yet the end.”
But what caught my attention was the placard advertisement in the hotel’s courtyard that Kapoor writes and revises zealously, over the course of the film. The sign initially reads: “The Best Exotic Marigold Hotel,” to which he adds, at various intervals: “Now with Guests,” and later, “for the Elderly and the Beautiful.” With each revision, he explains the new terms to one or other of the invariably uninterested tenants, with an enthusiasm that borders on frenzy.
To be sure, Sonny’s signage and promotional efforts do not really conform to the formal marketing strategies that Konrath advocates. It would be absurd to try to apply her theory of the value proposition (i.e. the business-driver focus, metrics and so on). But the need that Sonny faces in his marketing strategies certainly do apply to us as business people. And the unfailing dedication he shows to running his business, against all odds, does inspire.
For centuries (if not millennia), writers have observed that “art imitates life.” “The Best Exotic Marigold Hotel” reflects some of the harsh (economic, domestic, geographic) realities faced by aging consumers, in the 21st Century (both in England and in urban India). But the film also reflects the required work of explaining well what work one does and how one does it, as an entrepreneur, in the contemporary world of business.