Discover Your Nugget

How to find your Unique Value Proposition and what to do with it

Fran ScarlettRegional Director, SBTDC

Definition

nug·get   –noun 1. a lump of something, as of precious metal. 2. a lump of native gold. 3. anything of great value, significance, or the like: nuggets of wisdom.

Unique Value Proposition

Definition: A value proposition is the combination of products and services that provide value for a specific customer segment. It describes the way a firm differentiates itself from its competitors and is the reason why customers buy from a certain firm and not from another." It should answer the question: “Why should I choose to buy this product or service, and why now?” A value proposition is an analysis and quantified review of the benefits, costs and value that an organization can deliver to customers and other constituent groups within and outside of the organization.

financial

infrastructure market

value proposition

Institute for Innovation, copyrighted material, 20104

Business Model Architecture

Financialcost efficiencies revenue sources

Infrastructurecore capabilities

key activitiesstrategic partners

Markettarget customers

customer relationshipsdistribution channels

Value Proposition(nugget)

Institute for Innovation, copyrighted material, 20105

Business Model Architecture

Value Proposition Template

http://www.goldsbrough.biz/

6

http://www.goldsbrough.biz/valueproposition

First Draft

Value Proposition: UNCW Centro Hispano First Sentence - Value of the Offering

Target Customer

For… UNCW students and overall campus community

Statement of the Need or Opportunity

who…

Need guidance and support to be successful + campus needs more awareness of Hispanic culture and heritage.

Product/Service Category

our (Product/Service) name is… Academic support and cultural programming

Statement of benefit

that… Students will achieve academically + campus community will understand and appreciate Hispanic culture.

Second Sentence - Positioning the Value

Primary Competitive Alternative

Unlike… Centro Latino

Statement of Primary Differentiator

our product... College-student centered (academic mission)

Proof that Benefits can be delivered

because… Increased Hispanic enrollment & student success (GPAs)

Refining Your UVP

Questions to hone Unique Value Proposition• If your revenue(funding) was cut by 30%, what aspects of your

organization must you preserve?• Who do you compete with for customers(clients)?• What do you offer that your customer(client) cannot get

elsewhere?• You have an opportunity to access additional funds, but the

grant, loan, equity requires you to pick the operation where you know you can add the greatest value. What would you pick?

Value Proposition First Sentence - Value of the Offering

Target Customer

For… UNCW Hispanic students

Statement of the Need or Opportunity

who…

Need guidance and support to be successful both academically and as leaders.

Product/Service Category

our (Product/Service) name is… Academic support and cultural programming.

Statement of benefit

that… Our students will achieve.

Second Sentence - Positioning the Value

Primary Competitive Alternative

Unlike… Sister institutions of higher education in NC

Statement of Primary Differentiator

our product...

We’ve created a family that addresses the needs of our students.

Proof that Benefits can be delivered

because… Increased Hispanic student enrollment and student success in rising G.P.A.s

Second Draft

The “So-What” Test

•Try your value proposition out on colleagues, employees – and most importantly, existing and potential customers.

•If the response to your value proposition from a prospective buyer is “So What?”, you know that it’s not strong enough.

•Did it describe tangible or measurable benefits that are truly of concern to that consumer?

Financial*revenue sourcescost efficiencies

Infrastructurecore capabilities

key activitiesstrategic partners

Markettarget customers

customer relationshipsdistribution channels

Value Proposition(nugget)

Institute for Innovation, copyrighted material, 201011

Business Model Architecture

Revenue

• By establishing your UVP, you can focus your development efforts and time.– Focus on grants that really match your value

proposition– Differentiate your organization in the grant-writing

process

Funding sources are looking to ensure organizational alignment with their giving philosophy.

Financialcost efficiencies revenue sources

Infrastructurecore capabilities

key activitiesstrategic partners

Market*target customers

customer relationshipsdistribution channels

Value Proposition(nugget)

Institute for Innovation, copyrighted material, 201013

Business Model Architecture

Marketing 101

“Market” = group of similar customers.“Market Share” = percentage of available customers

buying from you, or using your services, instead of your competitors.

The objective: ◦Attract and retain a growing base of satisfied

customers.

Marketing 101

Customers must be the focus of the business.Marketing is the means of communicating

with customers. Getting the right message to the right people

at the right time.

“Profit” or “not-for-profit”, the approach is the same.

What Marketing Can Do

– 1. Reach more viable prospects with your message.* Prompt prospects to contact you. (More selling or service delivery opportunities.)

– 2. “Close” a higher percentage of the selling opportunities.

– 3. Raise the value of the average sale.

– 4. Increase repeat and referral business.*

Reaching Viable Prospects– Determine your target market profile. [The right people]

• Do you have a distinct, unique market to target?• Determine their characteristics, especially those that are unique.• What motivates them?

– Determine the proper message to deliver. [The right message: Unique Value Proposition]• How much “education” will be required?• What information do prospective customers need in your messages?• What misconceptions need to be eliminated or offset?• How can you hit their “hot buttons” – the things that motivate them?

– Focus your message toward your target market. [The right time*]• Be certain that the message will reach them when and where they are

receptive.– Get your message to more prospects. [The right place*]

• Which media are most connected to your target prospective customers?

Promotion & Advertising - Media Options

Personal Communication Word of MouthBrochures & Catalogs RadioTelevision Yellow PagesCenters of Influence BillboardsVehicles TelemarketingGiveaways Door-hangersAudios / Videos Direct Mail & E-mailBanners SignageNewspapers Industry PublicationsPOS / Packaging WebsiteNewsletters Blogs & FacebookNetworking Twitter

Increase the Percentage of Repeat and Referral Business

– Repeat business is the most cost-efficient. • Fulfill promises (Unique Value Proposition) to customers and they

will come back.• Cost to acquire repeat business is zero (or nearly so).• Stay in front of customers via e-newsletters, etc., to remind

them about you.• Social networking with customers.

– Referral business is the second most cost-efficient. • Fulfill promises to customers and they will tell others.• Be “pro-active” seeking referrals from customers.

Everyone = 100

No Potential (49)

Competition (20)

No Money (10)

Wrong Timing (5)

DIY (5)

Substitutes (10)

SALE (1)

$1.00 – Cost/Message

= $100 Total Cost

$100 Profit / Sale___________________

= $0 Total Profit

The Sales and Marketing Funnel

Everyone = 100

$1.20 – Cost/Message

= $60 Total Cost

$100 Profit / Sale___________________

= $40 Total Profit

50 – For Message

No Potential (4)

Competition (15)

No Money (10)

Wrong Timing (5)

DIY (5)

Substitutes (10)

SALE (1)

Customer Profile Screen Age IncomeLocationSocialEducationEtc.

$1.20 – Cost/Message

= $60 Total Cost

$100 Profit / SaleX 3 Sales = $300___________________

$240 Total Profit

Competition (15)

No Money (10)

Wrong Timing (5)

DIY (5)

Substitutes (10)

No Potential (4)

(1)New + (2)Repeat Sales

Everyone = 100

Customer Profile ScreenAge IncomeLocationSocialEducationEtc.

50 – For Message

Market Potential: Sources of Information

www.census.govwww.factfinder.census.govwww.infods.com/freedatahttp://df.clients.compcenter.com/catenate-links/ags (psychographics by zip)www.zapdata.com (info about companies)Thomas Register, Yellow Pages (info about businesses) www.sbtdc.org/pdf/startup.pdf (business start-up resource guide)

Contact Info

Contact Info: Fran ScarlettSBTDC

www.sbtdc.org/uncw910 962-4248

Questions??