Adding Value Versus Creating Value in a Service Provider-Client Relationship

March 6, 2023

by John O. Burdett

There are two forms of value proposition. The first, adding value. The further you move away from selling a commodity, the more the second kind of offering comes into play: creating value.

High Impact Value Propositions

It’s easy to confuse value proposition with brand. In fact, many businesses do. Your brand is your story; it’s who you are; it’s your identity (captured in a brand symbol); it’s the broad promise you make to those who buy – or are thinking about buying – your product or service. Your brand enables customers, suppliers, employees and other stakeholders to understand what the company does and, above all else, what makes it stand out from the crowd.

The “promise” implicit in the brand can be seen in these examples.

A promise that’s not fulfilled isn’t much of a promise. A successful brand wins in the marketplace because, beyond the slogan, it delivers Better Results And No Disappointment.

Nothing is more perilous to an organisation’s health than when its brand fails to live up to its promise. Walmart failed in Germany because “Lower Prices Everyday” didn’t work. The market was already saturated with low price retailers. Similarly, if the brand promise is poorly defined (common), it’s difficult – to the point of being within the realm of fiction – to see how those within the organisation can live up to a promise that they don’t fully understand.

A brand can be viewed as a competitive spear thrust into the marketplace. The value proposition sits at its tip. A truly winning value proposition spells out, in easy-to-understand terms, how the provider delivers distinct value. It’s not what you do, it’s how you make a difference. To have impact the value proposition must be specific, succinct and sustainable.

Adding Value Versus Creating Value

Consider these illustrations.

There are two forms of value proposition. The first, adding value. “A Great Shave For A Few Bucks A Month.” The value added? A cheaper shave without losing quality. The further you move away from selling a commodity, the more the second kind of offering comes into play: creating value. “Anyone, anywhere can start a business.” The value created? No matter who you are, we will help you start a business. Adding value provides an economical shave. Creating value has the potential to transform what is.

Adding value versus creating value prompts a very different way to think about business development. Tactical versus strategic. Improvement versus change. Transactional versus transformational. Doing things right versus doing the right things. Adding value draws on and propagates a commodity mindset. The underlying question for the commodity provider is, “How do we make money from this?”

Creating value, on the other hand, prompts a very different question: “How can we make the client’s business better?” The provider who has a truly differentiated offering, based on creating value, but who focuses on short-term financial gain is turning their back on a far more beneficial, long-term opportunity.

A business development mindset oriented to adding value makes perfect sense in a steady state world. We don’t live in a steady state world.

This article is an extract from “Competing to Win: Beyond a Better Value Proposition“, © Orxestra® Inc.

John O. Burdett is founder of Orxestra® Inc. He has extensive international experience as a senior executive. As a consultant he has worked in more than 40 countries for organisations that are household names. John has worked on organisation culture for some of the world's largest organisations. His ongoing partnership with TRANSEARCH International means that his thought leading intellectual property, in any one year, supports talent management in many hundreds of organisations around the world. Get in touch with John O. Burdett »

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