Exercise 1: Value Proposition

Value Propositions are brief descriptions of your organization and the value it provides, and articulate why the target customer/beneficiary will “choose to buy” or “consume” your product or service offering(s) over other alternatives.  (Note: the alternative may be “non-consumption”).

Instructions: Application | Exercise 1 | Exercise 2 | Exercise 3

Submit: Exercise 1 | Exercise 2 | Exercise 3

Reminder: Please register on Social Edge in order participate.
 

Exercise 1:  Value Proposition

Value Propositions are brief descriptions of your organization and the value it provides, and articulate why the target customer/beneficiary will “choose to buy” or “consume” your product or service offering(s) over other alternatives.  (Note: the alternative may be “non-consumption”).

Task Overview:

The purpose of Exercise 1 is to define the value that you create for your beneficiaries (compared to the alternatives).  The value proposition should be derivable from (or identical to) the mission statement.

In Exercise 2, you will describe the characteristics of your beneficiaries and why your value proposition is “right: for these beneficiaries.  In Exercise 3 you will define the key income and expense drivers that you use to sustain and scale your value proposition.

Background Resources:

Reference on value proposition: J. Gregory Dees, Jed Emerson, and Peter Economy, Strategic Tools for Social Entrepreneurs: Enhancing the Performance of Your Enterprising Nonprofit, New York, John Wiley, 2002, Chapters 1 & 2.

What is the definition of a Value Proposition?

A concise statement which articulates why the target beneficiary will “choose to buy” or “consume” your product/ service offering over other alternatives in the market. (Often the biggest hurdle is competing against “non-consumption”). The Value Proposition is the distilled essence of the organization’s mission/strategy.

Effectiveness of Value Proposition

• Targeted beneficiaries recognize that this message is for them
• Understandable (by beneficiaries, as well as employees, and donors)
• Important relevant to salient aspect of the beneficiaries’ context & culture
• Credible: can be supported by evidence
• Deliverable by the organization and employees and beneficiaries can say it easily and with integrity
• Differentiated:  “competitors” (non consumption or alternatives) cannot easily make the same claim
• Sustainable advantage: “competitors” cannot catch-up quickly

Is it clear why your product/services is better than alternatives?   Is it clear that “non consumption” is a less beneficial alternative?

Evidence Makes Value Propositions Come Alive

• Experience
  • demos, test drives, pilots, references
• Experts
  • academic, consultants, analysts, gurus
• Examples
  • Diagrams, pictures, customer PR
• Statistics & quantification makes evidence stronger
• Analogies help make evidence understandable
• Irrefutable facts are the best evidence ... “water flows downhill”

 
EXERCISE 1:

1a. Create a Value Proposition for your organization in a sentence such as:

[Name of organization] provides [products/services], which are [statement of key differentiators], for [target beneficiaries], and thereby creates [statement of social value/impact], unlike [competition].

1b. Provide evidence for your value proposition.

Over the past xx years, we have helped xxxx beneficiaries, creating (list of) benefits for each, compared to (the alternative)

Example:  The Aravind Eye Care System Value Proposition
For more information on Aravind Eye Care System, please see:

• C.K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, Philadelphia: Wharton School Publishing, 2005.
• V. Kasturi Rangan, The Aravind Eye Hospital, Mandurai, India:  In Service for Sight, Harvard Business School Case Stud, 9-593-098, January, 2007.

1a. Aravind Eye Care Value Proposition:

For the millions of people in India with cataract blindness, the Aravind Eye Care System profitability provides diagnosis, treatment, and post-operative care, which is 100% safe, has a greater than 95% chance of cure, is less than 1/5 of the cost of comparable care, and is free for those who cannot afford to pay. Unlike government run hospitals, Aravind provides high-quality cataract surgery in a professional and ethical manner, serving all patients with dignity. Unlike those who do not receive quality surgery, patients are able to return to productive lives.

1b. Aravind Eye Care Evidence of Value Proposition.

Over the past 33 years,  Aravind Eye Care has successfully performed cataract surgery on over 2.4 million patients in India, with nearly 60% of the surgeries performed for free, and all of the surgeries performed for less cost and with higher accuracy (fewer adverse events) than alternative hospitals.

Instructions: Application | Exercise 1 | Exercise 2 | Exercise 3