The Importance of Your Value Proposition

October 17, 2016

In every social enterprise, there’s a tension; two competing ideas that will shape almost every decision you make. These ideas are so important that they’re the focus of the first two sessions of our Two Feet Program.

The first is your ‘Intent’; why your organisation exists and what change you want to see happen in the world. There’s a skill in creating a clear statement of intent, but it’s also easy for social entrepreneurs to talk for hours about their passion for social impact. I find these sessions quite inspiring.

The second is your ‘Value Proposition’ to your customer; why people buy from you, and what keeps them coming back. This is often difficult to identify but the challenge is to walk in your customers’ shoes and see what motivates them.

Your value proposition is often separate from the product/service itself. Think about Apple and how they pitched the iPod, or the appeal of owning a Harley Davidson. Look at what Louis Vuitton offers customers, or what the most popular AFL teams offer their fans. These brands aren’t selling themselves with the technical specifications of their products, but by how they make people feel.

If you want to learn more, I’d recommend books like:
Value Proposition Design by Alexander Osterwalder
& Contagious by Jonah Berger, or come see us at TDi.

You can see why there’s a tension. Customers fuel your business, but what if they don’t share your passion? How do we create things that delight our customers, whilst simultaneously fulfilling our social mission? This is not about compromise, where both get done poorly; it’s about deliberately designing a model that can do both.

This is the focus in one of our many Two Feet sessions; to identify our customers and their pain points, then examine what parts of our products/services act as pain relievers. Why do they choose us over our competitors?

This then leads to some exciting questions: What else could we give them? How could we solve their other problems? Who else can we delight by slightly modifying our products/services?

This is partially an exercise in empathy; to observe our real life customers rather than imagining convenient fictional customers who share our views.

It’s also an exercise in design; being willing to alter and reinvent what we do in order to better delight our customers.

A strong value proposition is the heart of a good business model, so we need to get it right. That means we need to clear up any faulty assumptions that are in our thinking, and the way to do that is through real-world testing. Go talk to customers, pitch your value proposition, and see how they respond. Then ask for the sale; dollars on the table. How does the response change?

When you tell people about your social enterprise, they will congratulate you and give you encouragement. But ultimately, people vote with their feet, and with their wallets. You’re not looking for moral support; you’re looking to see if customers like what you’re doing enough to pay for it.

For our Two Feet cohort, the challenge is to learn from the market, as quickly and as cheaply as possible. This is a combination of art and science, crafting good questions whilst carefully measuring the responses.

Testing can be confronting, but what’s the alternative? Invest your time, energy and dollars into something that people might not want?

Isaac is an Associate at TDi and a Financial Analyst at Business for Development.
You can read more of his blogs here.

Spread the love

9 Mindsets of my Favourite Difference Makers

TDi Senior Consultant Isaac Jeffries shares the philosophies and habits that are the hallmarks of his favourite difference-makers.

This is a concrete list of practices and mindsets for working in community, and maintaining connection to people without burning out or burning others.

Bilum: The Power of Story to Drive Inclusive Economic Growth

by Annie Smits, TDi CEO   In May this year we attended the first official public screening of The Bilum Story, hosted by the AUS-PNG Network at The Lowy Institute in Sydney. Before the screening, I introduced the film to a crowded room, by bringing to the fore a...

Why We Need More Coaches and Fewer ‘Experts’ in International Development

By Kate Wilson, TDi Associate   An intuitive mindset coach and mentor, Kate's insight and expertise is so valuable to our team – we hope it will be for you too. This post was originally published on Kate's website, Resources Reimagined and explores the vital role...

Reconciliation Week 2022: Wrestling with our role in the Indigenous Business Sector

Anna Moegerlein, Deputy CEO, TDi In light of National Reconciliation Week, TDi’s Deputy CEO Anna shares some of the unfolding story around our work in the Indigenous Business sector: What are the challenges we are wrestling with as an organisation, what are our...

Introducing: Accelerate with IBA 2022 Cohort

Our 'Accelerate with IBA' Showcase on April 7 was a great success. It's been an incredible six-month journey as we partnered with Indigenous Business Australia once again to equip a new cohort of business owners to grow, learn new skills, and explore their social...

Meeting Uncertainty and Crisis with Curiosity

Anthea Smits, TDi CEO   I’m going to be honest; I had a rough start to 2022.   We endured a bout of coronavirus in January, followed by a series of personal crises. Each of these would have been manageable on their own, but one after the other, at a time when...

5 Minutes with Difference Maker Tammy: Ethical Innovation in First Nations Fashion

The challenges of ethical production in the fashion industry are many, but they lead to innovation and creative problem solving. We sat down with Difference Maker Tammy Saville and discussed the joys and challenges of starting her own children’s label, and how the IBA Accelerator is providing practical assistance in helping her meet her social impact goals. 

Mindset in Entrepreneurship

Anna Moegerlein, Deputy CEO TDi I’ve been at TDi for almost six years, and in that time I’ve worked with about 120 entrepreneurs. The one thing I’ve seen, over and over, is that we all get tripped up by our own mindsets. Our mindset has a big impact on our success in...

Meet Difference Maker, Ruth

Ruth has worked closely with us on several projects including the Laikim Sister program, as well as our ongoing work with bilum.

Holiday Recommendations – 21/22

Looking for some reading, listening or watching recommendations for the holiday season?Throughout the year, in our Newsletter, we have shared various recommendations for reading, listening and watching. We share some of these below that you might like to enjoy over...