The document discusses the concept of value proposition from a customer's perspective. It states that customers want the greatest return on their investment and defines value proposition as what the customer gets for what they pay. It also discusses the idea that customers traditionally want things that are good, fast and cheap, though suppliers can only provide two of those. An effective value proposition must also include desirability. The document uses examples like Dell and Walmart to show how focusing on good quality, fast delivery, low price and desirability led to their business successes.

1. October 2008 Value Proposition www.stankirkwood.com (Make a comment)

2. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com What does every customer want when making a purchase?

3. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com What are you looking for when you go to buy a car, a television, computer, house,….?

4. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com You want the greatest return on your investment

5. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com What is Return on Investment from a customer’s perspective?

6. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Value Proposition

7. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com “ What the customer gets for what the customer pays .” Wikipedia

8. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com “ A business or marketing statement that summarizes why a consumer should buy a product or use a service.” Investopedia

9. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com How do customers define Value Proposition?

10. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap

11. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com How did suppliers meet customer expectations?

12. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap: Pick Two * http://www.sixside.com/fast_good_cheap.asp *

14. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap, pick two Imagine if you are a supplier who can make all three come true at the same time? You will have the compelling Value Proposition and you will win in the market place

17. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap - Only three of the four components of the Value Proposition There is one more component

18. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Desirability

19. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com Desirability in a House: - May be style - May be landscaping - May be number of bathrooms - May be open floor plan

20. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com Desirability in a Car: - May be styling of car - May be options - May be speed - May be gas mileage

22. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com Not if you can help it. Your decision will depend on how you view the four components of the Value Proposition.

23. Relative Value Business Blueprints ™ Copyright: www.stankirkwood.com Weight of Value Proposition (VP) Components depends on customer segment Quantify the importance of each Value Proposition Component Lead Time Quality Price Desirability VP Components Car 25 25 25 25 All things equal 10 10 5 25 40 15 15 25 70 50 25 10 Empty Nester Family of five College graduate

24. Value Proposition Attributes Business Blueprints ™ Copyright: www.stankirkwood.com Value Proposition Components are made up of VP Attributes which can be further decomposed into VP Elements. Sun Roof GPS Leather Seats Options Spoiler Mag Wheels Curved bumper Styling Desirability Elements Attributes Component

25. Management by Design Business Blueprints ™ Copyright: www.stankirkwood.com The key to the Value Proposition effort: Defining and quantifying the Value Proposition so that you can measure and manage it. DQM ² = Define, Quantify, Measure and Manage You are creating a critical path for your company