Value Propositions - Case Studies Part Three
Understanding your value proposition is the key to building a strong business model.
It’s also the hardest part.
It’s often easy to see the value proposition of other businesses.
If you practice looking with outside eyes, you get into the habit of cutting through the noise, and seeing what really influences a customer.
Here are some more cases that I find fascinating - Brands who have approached crowded markets with an unique angle, often to great success:
What’s the difference between a watch and a timepiece?
A comma on the price tag.
People don’t struggle with not knowing what time it is.
Maybe 20 years ago that was a thing, but these days?
You have a clock on your phone, computer, microwave, bedside table, oven, and TV.
So what separates a $100 watch from a $10,000 one?
“It’s the reliability of the mechanical parts”
A $50 watch does exactly the same thing as an expensive one.
“It tells you the date and where the moon is”
You can’t get that from your phone?
Let’s see how a few different brand tackle this question:
What’s the value proposition here?
What's different here?
Heirloom – this is special; the kind of thing you’ll pass on to your children. It’s hard to put a price on something sentimental.
Refinement – the brand sends a message, one of good taste, success and modesty. The exact opposite of a gold rolex.
I first saw this ad a decade ago in the business section of The Age, and it has stuck with me.
I really dislike it.
That’s ok, because I am not their customer.
I do appreciate the clever positioning: Patek Phillippe have found an idea and philosophy that clearly resonates with their target market.
By contrast, Swatch have gone for a completely different approach:
Fashion – This thing is cool right now.
It’s fun, it’s my kind of style, and it wouldn’t be worn by a banker
Affordability – I can love this for a year or two, then move on to the next thing.
Swatch have forged an identity that is modern, ever changing and energetic.
The exact opposite of Patek Phillippe.
Many watch brands would not appreciate Fitbit being listed in the same article, but it does the same functional task - and more.
Fitness – If I wear this, I’m more likely to exercise, and less likely to go to the drive thru.
Statistics – I can see exactly what I’ve done today, and track my progress.
Competition – My friends all have one, and we’re in a competition which keeps us motivated.
The same core product, a watch for your wrist, but the clock face itself could not be less important to their value proposition.
Whilst Switzerland is probably known for being the home of the luxury watch, Danish brand Skagen have taken a different angle:
Minimalism – No complications, it just does one thing well, and is light on my wrist.
Aesthetics – That’s a nice watch, it catches the eye without being obnoxious.
Affordability – This isn’t a lifetime commitment, but still looks expensive.
Skagen are a new player, and have taken a “best of both worlds” approach to their value proposition – Patek style, at Swatch prices.
Sometimes creativity comes from combining two existing trends.
Cocoa is a commodity, but chocolate isn’t.
Chocolate is sold with much more personality and significance, with brands often taking strong positions to create their own identity and appeal.
Quadratisch. Praktisch. Gut.
Has there ever been a more German slogan?
Who else would define their chocolate by the efficiency of its shape?
It tastes great, but has never really caught on in Australia.
It seems we’re focused on other things, such as….
There’s no way each block is made by a guy like that.
It’s probably made in an incredibly sterile factory by robots.
But that’s not the story we tell ourselves.
Lindt makes us think of refinement, sophistication, class, and taste.
“Chocolate as it should be”, for people who don’t want to eat a lot of chocolate.
In the mid 2000's, Cadbury’s value proposition changed.
It used to be something classic, something…normal.
That was threatened when international players started offering better versions of basic milk chocolate, and the supermarket homebrands lifted their game.
These days, Cadbury is about fun.
Experimental flavours, unique combinations, and patriotism.
Don’t believe me?
Who else would release Vegemite or Lamington blocks?
Work, Rest and Play.
What a clever way of twisting a weakness into a strength.
Mars turned their major issue – that their product has a terrifying amount of calories, into a positive – that their product gives you lots of energy.
Favourites are designed to be bought for someone else. Cadbury have positioned this tall tower of chocolate as a way of not showing up to someone’s house empty handed. They’re not trying to compete on taste or quality, they’re trying to be a substitute for a bunch of flowers or a bottle of wine. The chocolate is actually irrelevant, this is about the act of giving.
A diligent shopper would know that you can buy 1kg of Cadbury for the price of a box of Lindt.
Socially skilled people know that you don’t turn up to a blind date with flowers and four blocks of Dairy Milk.
That’s because Value Propositions aren’t always about maths or cost efficiency.
The problem is, when social enterprises go to fill in a business model canvas, their descriptions are as broad as “Buy chocolate because it’s delicious” or “This watch tells the time”
What would make a customer choose us over every other brand?
What’s our unique angle?
What are the irrational, emotional factors that influence their decision?
For more of the Value Propositions Case Studies series;
Part One featuring Louis Vuitton, AFL, Uber and TOMS
Part Two featuring Nespresso, Heineken, and Shoes of Prey
Part Three featuring a variety of Men’s Watches and Chocolate brands
Part Four featuring the classic iPod ads, Whiskey, Hardware, Butter and Barossa Tourism
Being The Best explores how companies frame themselves as industry leaders
Being The Cheapest covers strategies for demonstrating value for money
Social Proof examines how brands make themselves look popular and trustworthy
Cologne looks at how intangible gains are conveyed through imagery and design
Bottled Water compares ten brands selling the same product in different ways
If you’re crafting Value Propositions, you’ll love my free Value Propositions eBook, full of tips for designing and testing compelling Value Propositions that will delight your customers.