The Value Proposition

In delivering superior value to customers, as an organization, the organization needs have a well positioned value proposition. In my research on what this value proposition really contemplates on, I came across this interesting definition put forward by Aaker & McLaughlin (2007).

A customer Value proposition is the perceived functional, emotional, social or self expressive benefit that is provided by the organization offering. And the most important attribute of a good value proposition is that the proposition should be sustainable overtime to differentiate the offering from its competition to support the organizations long term strategy.

This definition signifies the importance on customer perception, which is molded external, internal factors which has a unique moral definition for each person. A company should be very careful in mingling with the psychological transaction between the customer and the seller since once perceived as distrustful will lead to cascaded social perception.

For instance, Volvo positioning the brand as the worlds safest car brand could tarnished if proven otherwise. Most of the companies find it difficult to understand the level of match between the presented value proposition VS the perceived value proposition.

Hence it is always vital that as a company conscious efforts are put to understand this gap. And also critical aspect would be to benchmark against the competition which targets the same consumer segments and focus on the tangible KPIs like money spent on the transaction.