What differentiates your product or service from everyone else's, to the point where customers will pay for it?
You've heard the phrase "value proposition" a million times, but do you know what one is? Just as important, do you know what yours is? And can you articulate it quickly? Even if you can, we suggest you try this exercise, which pricing expert Stephan Liozu recently posted to the Innovation Excellence blog.
Here it is; just fill in the blanks:
"If you are a business leader in the trenches, a multitasking entrepreneur, or a busy innovator, chances are that you have not gone through the exercise and are not ready for it," writes Liozu.
If you have trouble filling out Liozu's mad lib, take heart: You're not alone. In fact, Liozu recently stumped a whole room full of executives with this exercise. "I was recently participating in a top management conversation at a fairly large high tech start up and I asked leaders around the room if they were able to articulate the business model value proposition and their critical value drivers," he recalls.
"The question took them by surprise and generated some interesting internal discussions. I was invited to speak with them about their potential pricing problems but we quickly realized that the problem resided in the business model fundamentals and the overall value proposition. The conversation uncovered internal disagreements, some frustration among the various executives, and a real need to take a step back and reflect."