How unique is your value proposition? Does it sound like everybody else? Then de-compose it.

In my experience, de-constructing the term "value proposition" is the best way to uncover the unique attributes that differentiate your offering. And, at the end of the day, rising above the competing noise is what we all want. If what you do sounds like everyone else, you'll be relegated to the general noise of the market.

Start with price/performance
Every product manager, salesperson, marketing manager and CEO should be able to answer the following question:

"How does our solution perform at a price point superior to alternatives?"

If you don't have an answer to this question, get it. As marketers we like to avoid the price/performance trap, but your customers look hard at this ratio - and you should know where you stand relative to alternatives.

Of course, brand completes the equation.

Price/performance + brand = value.

There's no question you can add premium to your price if your brand has some established, positive recognition, but start with a pure price/performance comparison of your solution's alternatives.

How has your value evolved over time?
If the price of a product or service rises, while its performance remains constant, it's value diminishes. Similarly, if a product's performance falls - with no corresponding drop in price - it's value also suffers. (This is true when products are elastic. Some products, like gasoline tend to be more inelastic .. and tolerate price increases without corresponding increasing performance, but only for a while).

Value improves when you add performance with no increases in price. Or, consider the case where you add more marginal units of performance with fewer marginal units of price.

Look hard at how your price/performance ratio has evolved over time. Many vendors increase price with no significant performance improvements, other than what they perceive to be added units of brand equity. But unless you've really measured how much added price customers will pay for your brand - this is dangerous behavior. Don't leave something as important as pricing to guesswork.

Can you think of instances where you rolled out new tools that offered higher performance for less cost? How did you communicate your improved value?

You may not compete on price/performance but you should always be prepared. For example, look how Microsoft has put Oracle on the defense with its pure price/performance argument.

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