You’ve heard the phrase “value proposition” a million times, but do you know what one is? Just as important, do you know what yours is? And can you articulate it quickly?
Even if you can, we suggest you try this exercise, which pricing expert Stephan Liozu recently posted to the Innovation Excellence blog. Here it is:
“If you are a business leader in the trenches, a multitasking entrepreneur, or a busy innovator, chances are that you have not gone through the exercise and are not ready for it,” writes Liozu, who recently cowrote an article featured in Build on the importance of setting a pricing strategy.
If you have trouble filling out Liozu’s mad lib, take heart: You’re not alone. In fact, Liozu recently stumped a whole room full of executives with this exercise. “I was recently participating in a top management conversation at a fairly large high tech start up and I asked leaders around the room if they were able to articulate the business model value proposition and their critical value drivers,” he recalls.
“The question took them by surprise and generated some interesting internal discussions. I was invited to speak with them about their potential pricing problems but we quickly realized that the problem resided in the business model fundamentals and the overall value proposition. The conversation uncovered internal disagreements, some frustration among the various executives, and a real need to take a step back and reflect.”
Although Liozu's mad lib seems simple, you need to choose your words wisely. As Adeo Ressi of the Founder Institute notes in the article "Mad Libs for Pitches" on TechCrunch: When completing an exercise like this, too many people "add useless adjectives, define their audience too vaguely and have a weak value proposition."