Article
How to create financially quantified value propositions in ...
strategicaccounts.org
Quoted on this wiki
Every place a page here uses this source, in the order the words come in it.
By Malcolm McDonald, Emeritus Professor of Marketing, Cranfield University School of Management “Our definition of a value proposition is “the translation of the supplier’s offers into monetary terms that demonstrate their contribution to the customer’s profitability.”” Even a cursory glance at the pricing example below from global engineering group SKF illustrates the dramatic impact that is possible as a result of preparing financially quantified value propositions.
This is why value propositions are so important in business today and why it is crucial to quantify them financially, a task which one would think is comparatively easy since there are only three ways in which monetary value can be created for customers: “Adding value (e.g. revenue gains, improved productivity, service enhancement, speed, etc.)” There is, it should be said, a fourth form of monetary customer value, namely: emotional contribution. This is much more difficult to quantify financially, but suffice it to say that, all things being equal in benefit terms and price, most customers will opt for a brand they know and trust.