Innovation

Realignment #3: Value Propositions Are Not About You

Reprinted with permission from SocialFish Chapter summary from my book: The Demand Perspective Leading From the Outside Do you know what question stymied association executives the most in the course of my research? It was a simple, straight-forward question: “What do you think is the greatest value members get out of your association?” While they were eager to list great programs and achievements in their answers, they were unable to penetrate their customers’ thinking and understand what it was about these customers’ experience with their association that made them select its services over those of other service providers with comparable offerings.  What outcome did they achieve through their membership that was essential to their success? What solutions were critical to their careers that the association might be able to better facilitate and increase its value? There is a serious, mostly undiagnosed problem here. The majority of associations, like most organizations in other sectors, are unable to see the world from their members’ perspective; put themselves in their shoes to understand what truly matters to them and what destination they are trying to get to. Even more alarmingly, they have no interest in doing so. They believe that occasional snapshots of member opinions and factual information are adequate. Program design, “value propositions” and strategic priorities are, therefore, determined on the basis of the association’s perspective. The gap between members’ perceptions of value and the associations’ assumptions about it is an incapacitating hurdle to an organization’s ability to create products and solutions that matter “to what keeps members up at night” and make a difference. Without an outside-in perspective, you cannot discern the true market value of your assets and, hence, construct meaningful value propositions, beyond recitations of programs and products. If an intelligent and strategic CEO cannot identify (not simply guess) in depth what creates value for members at various situations and moments in time, his/her organization is in serious trouble. How could it design products and solutions that deeply resonate with its customers, let alone, grow to become indispensable to their success? This is why the book helps readers identify and articulate true value propositions before delving into customer engagement, programs and services. Three things emerged in my research as prerequisite to the construction of a true and compelling value proposition.

  1. A value proposition is not about you—your flagship programs, reputation or achievements. It is about the value a member perceives and actually experiences through the relationship with your association. Your job is not to persuade members of the value you see, but to uncover the real sources of value they see; drill beneath the surface to understand what makes them “tick” and what most matters to them.
I once joined Planet Fitness, one of the fastest growing franchises in this sector. There were myriads of choices of gyms around me. Why did I join this one? What made the difference? For me it was their carefully constructed culture that soothed my fears, and their practices that matched my wallet and allowed me the low commitment I was prepared to give at that point. The value proposition that the culture reflected — a “judgment-free zone” — cut to the core: “We at Planet Fitness are here to provide a unique environment in which anyone— and we mean anyone— can be comfortable. A diverse, Judgment-Free Zone® where a lasting, active lifestyle can be built!” Obviously the company invested a great deal of time to understand someone like me. It “got” the hurdles that kept us, slouches, away from “serious”-looking gyms and built a business, designed to deliver on the promises their value proposition made. No great financial commitment since its elite “black card” membership costs only about $20 a month. No pools, saunas, aerobic classes, or tons of choices to make me feel guilty for not wanting to commit to hours at the gym. No intimidating people and behaviors. My goal was to get off the couch, not build my biceps or enter a beauty pageant. Planet Fitness acknowledged rather than belittle this goal. Conspicuously absent were any references to the company’s prestige, achievements or great products and benefits. The gym states its value in terms of its ability to address my concerns rather than persuade me of its greatness.
  1. Look for intangible value. Customer value does not reside in the purchase of a product itself but in the way this product is experienced and the results users get from its use.Sometimes what makes the most difference is not the great quality of a conference but the speed of recapping and distributing its contents to you after the conference; the type of conversations you have in-between sessions; or the access to potential clients or suppliers you get out of it. Yet most organizations miss and squander such sources of value that, if leveraged, could become the basis for future high-value programs and targeted member experiences. The Community Roundtable, a membership organization for community managers, realized that interaction with other members—the community itself—had much highest value for members than their formal programs. Instead of continuing to push the value of these programs on members, the company made these community-based interactions the basis of its business model and value proposition. Yet most associations miss, rather than leverage, such informal sources of value because they don’t fit with their own criteria of success. By measuring value on the basis of responses to program questionnaires or attendance, they miss the far greater value that informal experiences and intangibles.
  2. Value propositions are NOT marketing tools. Constructing them is not a matter of wordsmithing or persuading as in:
“Our members don’t understand our value. We need to tell them about it; improve communication; hit them over the head with minute descriptions of programs and services to make sure they get it. It is not even enough to “understand” what creates the most value to your stakeholders. You have to deliver it. This means that instead of simply enticing with marketing promises of value, you build organizations capable of delivering this value. At the end of the day, the value of your organization is judged by the results that customers experience. Not the promises made. This requires a relentless focus on customers and a single goal for all pieces of the organization: customer success. Customer-centric organizations are focused on the single and relentless goal of constantly identifying sources of member value, and then organize around their ability to deliver it.