Six Actionable Steps to Preparing Financially Quantified Value Propositions *

Abstract

This practitioner-oriented article represents a strand of research by the author into the practice of developing financially quantified value propositions for customers, which is the focus of this article. There is an appendix that spells out other meanings of the word ‘value’. The data used were gathered over a 5-year period from attendance and keynote addresses on the topic of value. In total, twelve conferences and 1,200 marketing practitioners were asked about their value propositions (defined in this article) via audience response systems in order to guarantee honest answers.

The results indicate that fewer than 3% have financially quantified value propositions. This compares with a verbal estimate from McKinsey of 5%. The main conclusion, while only indicative, is that it is a very low percentage of UK companies.

A review of the literature on value propositions failed to reveal any kind of quantitative process for developing financially quantified value propositions, so the author developed such a process and tested it on 20 organizations, global and local in order to refine it.

This article sets out the results of this work and is summarized here as a six-step process.

It is important to point out that the author of this article is deeply involved in the growing community of academics and practitioners who are striving to convince organizations that it is not only about creating value for customers, but also about creating value for employees, for all stakeholders and, of course for the Planet. All of this, however, is contingent upon creating value for customers, the major issue spelled out in this article.