An organization is defined by the customer value proposition it provides to end customers and the work that delivers that value proposition. Work flows in the organization through a series of business processes that align to satisfy customers. To even exist, every process within the organization should have a purpose that supports the overall value proposition. Generally stated, the purpose of a process is too delight a loyal customer (ethically of course) using minimal resources. And the value proposition of the process is what fulfills the core purpose. Therefore, every process your organization has a value proposition and it should clearly communicate the following information.
The customer value proposition is a short statement that identifies the customer, the customer’s painful problem, the solution that solves this problem, and the net benefit from the customer's perspective.
1. The customer.
The customer is the person or organization (internal or external) who uses the product or service provided by the process to solve their problem or satisfy their want or need. It is helpful to develop a customer profile describing common traits or characteristics.
2. The customer’s problem, want or need.
Every customer has a problem to be solved, whether the need is for report providing information or an antidote to a deadly illness. The severity of this problem drives the level of desire a customer has for a solution. This desire can often be stated as a problem to be solved, such as an injury to be healed. Alternatively, the desire may be stated as a strong want or need, such as wanting the coolest smartphone or needing an automobile to get to work. The more painful the unsolved customer problem, or the greater the customer want or need, the more important the process is to the customer and the better the opportunity to build a loyal customer.
3. The solution that solves this problem.
The solution provided is the process output that to fulfill its purpose. It is comprised of four dimensions, including Solution Desirability, Responsiveness, Economics, and Relationship. A process should solve the customer’s painful problem or satisfy a want or need in a way that delights the customer.
4. The customer's net benefit.
Value is perceived solely in the eyes of the customer. If the customer doesn’t perceive a solution is valuable, there is no customer loyalty. The question is this; what is it worth to the customer to solve his painful problem? Value can be expressed in many ways, such as reducing waste, increasing revenues, restoring good health, saving time, improving skills, having fun, etc. The customer weighs the benefit of a solution against its cost versus other options available to the customer. While a customer may desire the solution provided by the process, solution economics could otherwise preclude the customer from purchasing that solution. Another solution that isn’t as good may be more affordable and therefore be more attractive to the customer. Very few solutions are desired at any cost.
To be successful, an organization must offer a strong value proposition to end customers in markets where it competes. A strong end customer value proposition is delivered through a series of strong internal value propositions by business processes that align meet important needs. Strong business processes power the engine that drives the organization toward successful customer outcomes.