Relationships = Valued Propositions

I remember the first time I heard the words “value proposition”.  As a faculty member at a small university I had an unusual entrepreneurial bent that got me into trouble from time to time.  In search of a way to meld research, teaching and business I took up consulting for what turned out to be the next 20 years, shuttling back and forth between academia, government and industry.

One day early on in my practice with a new client, I was ushered into a conference table equipped with a computer and projector, handed a stack of paper and asked to brainstorm (with two or three others)  a “winning value proposition” to take to the company’s government customers.  Puzzled, I simply nodded, but when my new colleagues arrived I asked what the words “value proposition” meant.  I understood each word, and I had a vague sense of what they pointed to when linked together, but I was also pretty sure there was a specific business meaning eluding my academic brain.

I did not – could not – never did – receive a coherent answer.  Nothing, nada.  No concept I could use in a sentence, let alone something actionable.  Nor do I remember much about the afternoon.  I have no idea what we came up with after 3 hours of  sitting around the table, but I’m fairly certain it was worthless.  I do remember leaving the room determined to find out what the term really meant.

I’ve had many deja vu moments over the ensuing 20+ years, which is why I remember it so well.  The confusion about what a value proposition is crops up in places you’d think it wouldn’t – business schools and corporate suites, for example.  There are equations, and complicated discussions about philosophy, and economics, and what started out as jargon ends up that way, too often.

Several years ago, a client helped me understand the true meaning of the words

We had been working for months on a huge upgrade to the services offered by his company – a software company specializing in Human Resources.  They were doing some innovative work, and I was leading the charge from our side to get the use cases documented.  Just like our “winning value proposition” assignment years before, this project suffered from a lack of firm definition at the outset.  Attempts to bound the problem by limiting the actors and scope of behaviors that were available to the system were faced with pushback by our client, who wanted to make as broad an array of services available to his customers as was possible.  Ditto my effort to get a vision firmly committed to.  Requirements crept, and the schedule slipped.  All of us were frustrated.

One afternoon I decided to give him a call.  I didn’t want to talk about the project; I wanted to learn more about him.  What was driving him?  What did he like to do?  Where did he see himself in a few years?  We’d talked alot about the company when I first came on board.  I was impressed by the distance he’d already come, building it up from scratch to a  respected small business that was starting to give some of the larger, more-established brands a run for their money.

Near the end of the conversation, I asked him what his value proposition was – not for the project, not even related to his company – but for him, his life.  His answer?

“I’m very good at creating relationships that last – in my family, in my work, in my community.”

It was one of the best value propositions I’ve ever heard. Still is.  It rang a bell for me, and I still hear them chiming every day.  The rest of the conversation just flowed.

“So…if you expand your services as you want to and experience the rapid growth you’re seeking as a result, what’s going to happen to those relationships that you’ve nurtured?  Will your sales and service staff be able to maintain “by-name” connections with those core customers who have brought you this far?”

He was very quiet.  Then we went on to talk about his core value proposition – establishing real relationships with customers, and maintaining them.  A smart man, he saw immediately that instead of a broad-based, shotgun approach to growth, he needed to slow down, bring new services on line one or two at a time, introduce them to his existing customers, partner with them to learn what worked and what didn’t, and then count on them to help bring new clients into the fold.

And so, when I pointed out that we could still do what he wanted to do, but that the use cases should be prioritized and with them system development, it made complete sense to him.  From that day forward he got behind the project, rather than presiding over it.  We had control re-established within days and his first new set of services was in beta testing in six months.

Value propositions are always about relationships.  They are about the relationship between you and your customer, between me and you.  What experience do you offer to your clients?  How meaningful is it?  What do they pay to get it?  Not just money – but time, thought, effort?  Value propositions are about an exchange – some sort of investment for some sort of experience. They take time to grow.  Do that enough times and do it well enough that your clients return again and again and before you know it, your value proposition IS the relationship.

Moral of the story?   Forget about “pro forma” customer service. Take the time to build relationships.  Talk with your clients.  Converse with them.  Ask questions.  Get to know them.  Find shared values.  You’ll learn things that will make you better at what you do for them, and for others, and for yourself.  Your guidance and support will become valued propositions.  And that’s a beautiful thing.