Posts Tagged ‘purpose’

In 100 Words: Difference Between Purpose & Value Proposition

Tuesday, January 31st, 2012 by Troy Schrock

Purpose and value proposition are not the same thing.  Purpose is primarily an internal message that aligns employees; value proposition is an external message that tells customers how you will meet their needs.

Customers may admire your purpose, but they buy your value proposition based on how it meets their needs.  For example, I personally admire Southwest Airlines as an organization, but I typically fly with another airline that better meets my particular business travel needs (even though I have far less admiration for their company).

Let your purpose drive you, but let your customers’ needs drive your value proposition.

“A lot of companies have chosen to downsize, and maybe that was the right thing for them.  We chose a different path.  Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.”  (Steve Jobs)

Click here to have “In 100 Words” delivered straight to your inbox twice each quarter!

Share

The Difference Between Purpose and Value Proposition

Friday, June 24th, 2011 by Troy Schrock

I sometimes see businesses treating purpose and value proposition as if they are the same thing.  They’re not.  The purpose (or cause) is primarily useful as an internal message – the idealism that attracts, rallies, and holds together the troops.  The value proposition is the external message that tells the customers how you will meet their needs. 

Organizations can become so passionate about their purpose that they begin telling customers what they need rather than listening to what they need.  Even when customers admire your cause, they generally don’t buy your cause; they buy the value you provide.  They measure this value based on you solve their needs.  For example, I personally admire Southwest Airlines as an organization – their business model, their cause, their organization, and their success.  However, I rarely fly Southwest Airlines.  As a frequent business flyer, schedule (flight times and travel time) are more important to me than price.  Since I typically fly out of a hub for another major airline, I have direct access to most destinations and many flight time options on that airline.  I have far less admiration for the airline I fly, but they better meet my needs than Southwest.  If my needs ever change in a way that aligns with Southwest’s value proposition, I will gladly fly with them more often. 

Sometimes, customers who buy your value proposition will also identify with your purpose.  That’s great when it happens, but it is not a given.  Therefore, you must carefully monitor the balance between your purpose and your value proposition.

Share