composite photographic image consisting of 3 frames, each arrow-shaped and with a text overlay. Facing left, the market arrow with over a group of obscured people. Facing right and located on the top: the second largest arrow says: Value prop over a digital blue abstract image. The smallest arrow, also facing right and located on the bottom right is a solid green with text, alternative offers. It's a bright and upbeat composition.
Market Research

Scoping Your B2B Value Proposition – Defining Ambition

Written by Jane Morgan on .

A simple, yet thought-provoking framework to conceptualize your organizational ambition, your solution development and your messaging. Before commencing work on articulating more detailed B2B product messaging (the actual words), spend time considering where you are today and your future ambition. Your value proposition is grounded in three elements: customer/market needs, your solution, and alternative offers. Value proposition development is about making strategic decisions and aligning organizational energy around those choices. It starts with

understanding the needs of your B2B customers and prospects, then positioning your offer relative to alternatives in the market place. Your value proposition, therefore, sits at the intersection of

  • knowledge about your customer needs,
  • contextualizing your solution relative to market needs (with some future proofing considerations),
  • and an understanding of the alternatives in your market place / industry.

While crafting messaging requires linguistic skills, thinking about and working on your value proposition requires an understand of all three points above as well as the ability to make organizational decisions, i.e. trade-offs. Developing your value proposition, therefore, precedes messaging, and involves those in your organization who hold the three aspects of organizational knowledge above. It’s about choosing where to focus, i.e. drawing boundaries. It’s not (just) the marketing communication person’s job (unless they are also the CEO). Nor is it the product person’s job (unless they are also the CEO). Each of these three aspects in considered in turn below.

Knowledge About Your B2B Customers -> Market

Firstly, knowledge of customer needs is absolutely essential to conceiving, developing, marketing, selling and delivering solutions. From product: problem fit to product: market fit to scaling internationally, without a solid understanding of customer needs all communication and organizational efforts will be impeded.

At JEM 9 we’ve explored understanding customers in depth with resources to improve customer understanding here. The key boundary decision with respect to your value proposition is understanding which customers in which market(s), you serve. Of all the needs/challenges identify which customers and needs you aiming to fulfill. If you are yet to be convinced of the need to understand those you serve, explore whether you show symptoms of poor customer understanding.

Your Solution In The Market

Secondly, your B2B value proposition is grounded in what your solution offers prospects today. Many technology solutions start off doing one thing and build from there. A common maturity curve for software commences with collecting data and making visible a baseline, i.e. reporting, often via an offline baseline, i.e. digitizing checklists, then moves onto working with the data set making recommendations and being proactive (e.g. adding reminders).

In other words, typically your product vision as well as your product roadmap require consideration. You don’t want to reorient your value proposition with every future release as you improve your product. Consider how future updates and releases will deepen or expand the problems you solve. The goal is to establish the boundaries of the conceptual headspace you wish to occupy with your target customer persona.

These three questions can be useful, if high level, starting points to consider where your solution may go:

  • Do you aim to be the best, most comprehensive, all bells AND whistles, or the best value product?
  • Do you (aim to) do everything up and down a process /workflow or just one thing really, really well?
  • Are you aiming for a well-defined specific niche with an out-of-the-box solution or a more generic, flexible and customizable platform?

Product (and organizational) vision defines the boundaries of the markets you (wish to) serve. These boundaries inform your value proposition.

“The only wart specifically designed for a dog.”

Neil Rasmussen (in jest)

Repositioning – An Example of Changing Value Prop

Considering how the market changes and how organizations align their organization and solutions, offers a useful lens when considering value propositions. Repositioning means a deliberate attempt to change the conceptual ‘headspace’ that a brand or product occupies in the mind of customers (and perhaps the broader market).

  • G Suite was repositioned to Google Workspace, “the best way to create, communicate, and collaborate” as Google works to “better equip [] customers for the future of work” by unifying the experience of working across their collection of software products.
  • Microsoft Office was repositioned to Microsoft 365 indicating a move towards a subscription-based business model with greater focus on online and mobile use rather than offline and desktop use.
  • Zoom is attempting to move from online video meetings to “One platform to connect”.

Solution Strategy and Your B2B Value Proposition

Pricing is critical to your solution strategy and needs to align with your value proposition. Consider whether you are aiming to position your solution as ‘best in class’, the Rolex of <my target market segment>, or best value, the ‘Pound / Dollar / Euro Shop’ in your niche. Consider what your pricing conveys.

Understanding Alternatives To Your Solution In The Market Place

Thirdly, positioning considers how customers conceive your product in comparison to alternatives. Some understanding of alternative solutions that your prospective client already uses, or might choose, is required. Consider both direct/immediate competitors as well as adjacent products. Typical alternatives almost always include:

  • The way we currently do it
  • Do nothing
  • Paper

You don’t need a very complex market map but neither can you proceed in darkness. Alternatives are intertwined with understanding customers: Different companies take different approaches and opt to serve different cohorts/segments within larger markets. Both the value delivered and the cost of alternative solutions informs your value proposition. Amongst the alternative under consideration, your solution needs to be sufficiently compelling to cross the the ‘So What’ threshold.

The Threshold of Awareness < The ‘So What’ Threshold

Before we move onto the ‘so what’ threshold, another threshold is worthy of mention here as it sucks up tremendous amounts of time, energy and money. The threshold of awareness is a communication challenge which is addressed by marketing communications (including messaging) and business development efforts. Often this manifests as talk of ‘filling the pipeline’ (a marketing communication approach) or “we just need more leads” (a sales-led approach). You can cross the threshold of awareness by throwing money at it. Typically this includes branding, design, messaging and advertising, and/or hiring sales people. The threshold of awareness is a real challenge that it’s necessary to cross.

However, a ‘so what’ challenge is often misdiagnosed as an awareness challenge. No amount of awareness can solve a ‘so what’ challenge. Premature investment in marketing communications or business development is akin to ‘putting lipstick on a pig’, i.e. making superficial changes that do not address fundamental weaknesses (no matter the shade of lipstick, the frequency of reapplication or the size of the ad budget). Redoing the website is one way that a weak or missing value proposition manifests. Too often the marketing communications person, the sales person or the creative agency gets the blame when what’s missing is a core value proposition. Redoing the website or any other awareness work does not compensate for the lack of a solid value proposition.

The ‘So What’ Threshold – Is Your Alternative Worth It?

The ‘So What’ Threshold needs to offer customers sufficient benefit to overcome the natural barriers of inertia, risk of change, and the additional effort required to do something differently. The ‘so what’ threshold goes to the heart of successful innovation, i.e. solving a problem that matters and developing a compelling and practical solution.

AI-generated photograph of a mature white ~6-legged, ambiguously legged, horse with a pink and purple curled mane and a shiny metallic cone placed where a unicorn would be. Generated by Canva-Magic-Media.

You may have produced the only unicorn mane specifically designed for a horse (with 6 or so legs) but if the problem you are solving is not compelling, the solution developed too difficult to understand or implement, then you have not crossed the ‘so what’ threshold. The world is (sadly) full of wonderful (and weird) software and solutions that do not cross the ‘so what’ threshold. (Into this world, we add an AI-generated image of ~6-legged horsicorn into the mix.)

As a start to considering the alternatives to your offer:

  • Make a list of alternative solution to whom you might lose a sale.
  • Consider how existing alternatives are grouped: What categories are established in the existing market place? How does your solution compare to these categories?
  • List the differences between your offer and alternatives.

At this point you have to decide where to position yourself based on your understanding of customer needs and your product vision,

  • align your offer with existing market categories and compete using within-category established criteria or
  • hone in on how your solution is quite different forcing a trade-off amongst criteria: work to establish new criteria which may include doubling-down on a niche.

Working through the three aspects in this framework will help clarify your thinking aiding your value proposition development and hopefully minimise horsicorns and reduce unused software. There are after all no shortages of problems that technology can help solve.

Further Resources to Scope Your Value Prop

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About Jane Morgan

With 20+ years high-tech marketing & product development experience from Boston to Billund, Berlin to Bangalore, Jane has managed teams and tech products with millions of installs, and millions of revenue (annually). She's researched and developed market strategy for global markets, and established the blueprint for product management in many new teams. As an intrapreneur turned entrepreneur, she changed vowels in 2014 and founded JEM 9 Marketing Consultancy. Today she works with CEOs & business leaders to assist them in understanding and reaching customers. Speaker on market research, technology marketing and product management.