« Harnessing your customer truth » a Value proposition paper by FutureCurve
FutureCurve is a UK based consulting company, helping companies « achieve a truly customer-centric business » based on a methodology named Value Proposition Builder (TM). They recently published a white paper on their approach « Harnessing your customer truth« , an extract from their guide to Creating & Delivering your Value Proposition.
Besides showing another example of people sharing our approach, common to Business Model Generation / Value proposition, Shared Value, etc. this paper includes a significant detail : a definition of « Value = Benefits – Cost²« , very close to our recurring definition of « Value(s) = needs satisfaction / perceived costs » but pinpointing the fact that negative impacts (costs + risks) are frequently perceived by stakeholders as more acute than benefits.
Nice point, not that common ! This is precisely the reason that made some Value specialists abandon the idea that V = B – C, and choose a presentation where a solution is chosen from the balance between perceived benefits and costs, with a relative weight that can vary significantly between decision makers and stakeholders, due to risk sensitivity, previous experience … In practice, instead of substracting costs to benefits, or like FutureCurve, overweight risks, we prefer to let stakeholders decide between alternative options presented in a Pain/Gain (or Benefits / Costs) matrix. This allows for a more sensitive decision : a higher benefits-Gain solution can be chosen if its risk-costs-Pain level is acceptable to all relevant stakeholders. The relative weight of + and – leave room for dialog !
A more detailed bubble-matrix shows 3 dimensions: Gain (size of the bubble) / Commercial risks / Technical risks.