It is Alexander Osterwalder who, in his book Value Proposition Design: How to Create Products and Services Customers Want, says “Your customers are the judge, jury, and executioner of your value proposition. They will be merciless if you don’t find fit!”
For years I believed “creating value” was just a business and marketing abstract concept and that once a business convinces itself of its value, the targeted customer would automatically be willing to pay money in exchange of goods and/or services.
I probably was not the only one who underestimated the importance of this concept, perhaps explaining why most businesses fail to invest adequate time to dig into the subject, developing and articulating their value proposition until they find a strategic ‘‘sweet spot” — where the target customers’ needs fit with what’s special about the product or service offering and its capabilities in a way that competitors cannot match.
In my consulting years in the private sector, I recall how potential clients would knock at our doors to request our solutions and services (of course this was at a time when I was working for a global IT and business consulting firm).
My later experience in the public sector was a sharp contrast.
Customer Service Managers and marketers were always at pains trying to sign-up new customers and renewing service level agreements.
It would take months and years to convince a client of our products and services.
Even upon signing up the client, there were never-ending customer satisfaction issues that we, as lines of business, would constantly have to address — with little success.
But why would our customers be so unhappy with our products and services? Is our pricing not right?
Is it our customer-facing personnel that is not well-trained?
We would ponder on these questions constantly, yet still not grasping what value means to our customers. It was always assumed.
Once the light bulb came on, it dawned on me that “value creation” is not just a kind of business-speak.
Rather, creating value captures a salient distinction from doing other things that businesses do to make profit. It is the essence of any business.
The ability of a business to create value is what causes people to want to trade with it.
When a customer is willing to take out their wallet and hand you their money, it is because something is compelling them to give up their money.
They are convinced that, out of that money exchange, they will get something that addresses their need, which is value.
Granted, value can mean many different things, it really depends on the context.
From a business perspective, there is a direct correspondence of relative worth of a good or service and value as determined in an exchange for money.
Thus the latter refers to financial value and the former addresses intrinsic value.
Successful companies have somehow found a way of understanding their customers, properly constructing their value propositions and delivering that value.
Their ability to do that has helped them focus on what their offerings are really worth to the customer.
Not all those successful have been the first to introduce products and/or services to markets.
They have, however, done key things right and one of them is developing smart business models centred around a Customer Value Proposition (CVP) — a promise of potential value that a business delivers to its customers and in essence is the reason why a customer would choose to engage with the business over existing market competition.
Defining a good Customer Value Proposition helps articulate the relevance of a product or service offering by explaining how it solves a problem or improves the customer’s situation in a manner that is different to competitors. There may be several ways of solving the customer’s problem.
Your promise may be premised on delivering quality cheaper and/or faster than everybody else, or you may deliver a better product or service.
Some of those ways may be in existence on the market through competition, also promising to solve these problems.
It is, therefore, important that this promise of value be unique and lucidly expressed in terms of the target buyer, the buyer’s problem being solved, and why the offering is distinctly better than existing alternatives.
More importantly, the promise you make to your customers is the one you have to keep. Your unique value proposition, therefore, is not just a list of customer benefits.
Depending on the type of Value Proposition, it may have to include all favourable points of difference your offering has relative to the next best alternative (favourable points of difference) or key points of difference — and perhaps, a point of parity — to deliver the superior value to the customer for the foreseeable future (resonating focus).
It may be new value, additional value to what you have been offering or better value.
Whichever is adopted, your Value Proposition needs to be well-thought of and crafted as it will dictate and influence your marketing and overall business strategy.
There is no point in dazzling value propositions and yet not actually having the people, processes, tools and requisite experience to back it up.
The truth is that value creation and capture are crucial aspects of any strategic analysis. Innovators, business strategists and entrepreneurs at large work hard to understand exactly what value means to their customers so they can generate it.
However, though on the surface, value propositions seem simple and very straightforward, consumer research studies suggest that value propositions that resonate with customers are exceptionally elusive.
One reason for this is little attention paid on researching and understanding customers prior to developing an offering.
Once companies instil discipline in understanding their customers, they can start making smarter choices about where to allocate limited resources to deliver the value.
If given enough attention, a value proposition can breathe clarity into your business.
A good value proposition is the keystone to developing a strong marketing strategy and moving everyone in your business in the right direction.
The question is: Can you say what your customer Value Proposition is?
Are your customers, who are “the judge, jury, and executioner of your value proposition” crystal clear about how your offering solves their problem?
l Fundisile Serame holds a Masters in Business Information Technology from Tswane University of Technology. She is a Gordon Institute of Business Science (GIBS) alumnus.
She has extensive training in the IT sector both private and public sector
Why invest for the future
AN investment plan forms a critical pillar of a financial plan, says Tokiso Nthebe, a local author and financial services adviser.
Nthebe, the founder of TKO Financial Wellness and Advisory, says when people invest, they can use their money to buy assets that will increase in value over the long term.
He says these assets can help them build wealth.
“When you invest, your money starts to work for you by providing returns that will beat inflation,’’ Nthebe says.
Nthebe says there is a huge difference between saving and investing.
He says investing requires that you take some level of risk in exchange for an expected return or growth.
Nthebe says Basotho should consider many factors before they decide to start investing.
“It is important to have a clear strategy that guides your investment decisions and to work with qualified professionals,” he says.
Nthebe says one should consider their growth mind-set, investment goals, and their risk tolerance.
In addition, one should consider what kind of growth or return they expect.
He says one should find out whether the institution they invest in is licensed or regulated and how long one should invest.
Nthebe says one should further consider what risks are associated with the investment option and whether there are any associated costs.
He says it is also important to remember that investments take time.
“There are no short cuts to building wealth. Do not fall prey to get-rich-quick schemes,” he says.
Moreover, Nthebe says the investment landscape comprises commercial banks, asset management companies, and insurance companies.
He says each provides different financial products and services.
Nthebe says the Central Bank of Lesotho (CBL) also offers investment solutions such as treasury bills and treasury bonds that Basotho can consider.
Depending on your investment goals, he says financial service providers have a wide range of investment solutions to choose from that cater for short, medium, and long-term goals.
“I encourage Basotho to do thorough research and seek professional advice before making financial decisions,” he says.
Vince Shorb, the United States National Financial Educators Council CEO, writes that “many of the financial problems people face today started when they were young and making their first financial decisions”.
Shorb further says taking on too much debt, not investing early, and failing to plan can take one decades to recover from such.
However, it takes financial literacy to make good decisions, he says.
Financial literacy has been perceived as a tool that gives you the opportunity to be confident and empowered to live the quality of life you have worked hard for.
Shorb says one of the wisest decisions one can make to prepare for the future is to invest.
Investment has been defined as the commitment of funds with a view to minimising risk and safeguarding capital while earning a return.
When Covid-19 hit and the government shut down all gatherings in April 2020, there seemed no way out for ICONICS (Pty) Ltd, a budding events management company based in Leribe district.
They had two options: shut down or innovate to keep the business going.
They chose the latter.
Three years down the line, ICONICS (Pty) Ltd has completely transformed itself from an events management and public relations company into a manufacturing company that is now the envy of Lesotho.
“The closing of events translated into the closing of our business,” Rapitso Mosebetsi, one of the co-founders of ICONICS (Pty) Ltd told thepost this week.
Mosebetsi established ICONICS in partnership with Tumo Mahapa.
Faced with collapse, Mosebetsi say they began buying Personal Protection Equipment (PPE) such as surgical gowns, disposal coveralls and safety apparel for resale.
Eventually they decided to manufacture the PPEs and safety clothing. That was the turning point.
But since the company was already down, Mosebetsi says diversification was a hard nut to crack.
“It became quite a long journey (for us),” he says. “We had to come up with something new for the industry.”
He says they had to overcome stiff competition from giant companies and come up with something unique that would set them apart.
“That was how thermal heating apparel was born,” he says.
“We are the first company to produce thermal heating apparel,” he says.
The company manufactures thermal clothing, which is electric clothing, using power banks of five voltages.
“The voltage is so low to electrocute a person,” he says.
The clothing also has a power button to turn it on and off.
Mosebetsi says the thermal heating apparel is on corporate clothing as well as high-visibility clothing.
Mosebetsi says they started the journey with the support of several organisations, such as the Lesotho National Development Corporation (LNDC) and the Basotho Enterprises Development Corporation (BEDCO), to build their capacity.
Mosebetsi says they also got mentorship support from organisations such as the Global Entrepreneurship Network.
The results of years of hard work are now all out for everyone to see.
In 2022, ICONICS won the M100 000 Business Plan Competition hosted by BEDCO.
This grant enabled them to acquire land and buy five more industrial machines.
This did not only enable the company to increase their production to 100 worksuits a week, but it further created permanent jobs for five people as well as three temporary workers.
Last year, the company took part in the Exporter of the Year event hosted by the LNDC in partnership with the Lesotho Post Bank and the United States Agency for International Development (USAID).
Mosebetsi says they won the award for Lesotho’s most innovative and versatile exporter.
He says this did not only put them in the spotlight, but it further encouraged them to do more.
ICONICS was announced as the best exporter of the year at an event hosted by the LNDC earlier this month.
Mosebetsi says this made them proud, as the award is aligned with their vision.
The award further gives the company an opportunity to participate in the regional competition.
He says this opportunity will further give the company a competitive edge in terms of production locally and globally.
“It will be an honour if we can win the regional competition,” he says.
In terms of markets, Mosebetsi says the company has had the opportunity to list their products in the African Trade Market since 2020 with the support of USAID.
This is an e-commerce platform that opens up the market for African countries to list their products.
Mosebetsi says the company did not only get publicity, but the client database also increased.
He says they moved from supplying individuals only to big companies, different organisations, and different government departments such as those involved in mining and health.
Considering the decline of the Lesotho textile industry, Mosebetsi says their secret to success has been their being innovative.
“Our sustainability is matched with innovation,” he says.
Mosebetsi says it also requires patience coupled with lots of investment in terms of time.
“Rome was not built in one day,” he says.
He says working as a team also plays a critical role.
Despite their achievements, Mosebetsi says the market for innovative industries is one of the hardest nuts to crack.
He says the company is in the process of not only making their products known but also educating people about their safety.
Mosebetsi says the other challenge is the decline of the South African Rand as compared to the US Dollar.
He says some of their materials are sourced from China.
Therefore, it is more expensive to buy such materials.
ICONICS is not only seeking to make their brand well known globally, but Mosebetsi says they are also seeking to create more jobs for our youths.
LetsGo and Win!
LETSHEGO Financial Service has launched the LetsGo and Win loan consolidation campaign where customers win weekly and monthly cash prizes of up to M150 000.
The campaign, which was launched yesterday, will end on November 8.
The LetsGo and Win campaign rewards customers for consolidating their loans.
It is aligned with Letshego Lesotho’s version to offer competitive products that cater for the evolving needs of its customers.
The financial services company operates in Lesotho, Botswana, ESwatini, and Zambia.
The Marketing Manager and Business Partner, Tšotetsi Seema, said Letshego Lesotho is committed to delivering increasing value and options to customers.
Seema said this programme is a testament to that commitment.
“The campaign invites customers to consolidate their loans into one low and easy repayment with reduced rates and they stand to win weekly and monthly prizes,” Seema said.
“The weekly cash prizes will be won by lucky customers randomly selected and notified through Letshego Radio shows,” he said.
Additionally, he said two lucky customers will be randomly selected each month and given a chance to spin the wheel of fortune with a chance to receive a maximum of M20 000 each.
“The loans consolidation campaign makes it easier for customers to choose Letshego Lesotho as their preferred financial services partner.”
He said this innovative campaign aims to help individuals streamline their debt payment while benefiting from reduced interest rates.
“Debt consolidation can help customers get a lower monthly payment, pay off their debt sooner, increase their credit score and simplify their life.”
Letshego Lesotho’s Head of Sales, Distribution and Marketing, Motebang Moeketsi, said managing multiple loans can often be overwhelming with varying interest loans due dates and terms.
“The campaign addresses this challenge by combining multiple loans into a single, easy to manage repayment plan,” Moeketsi said.
He added that this simplification not only eases the financial burden on borrowers but also potentially leads to significant savings over time.
Moreover the new consolidation campaign invites customers to take advantage of their best-in-class financial services provided through Letshego Lesotho branch network and digital platforms.
“Letshego Lesotho is committed to increasing financial inclusion through its efforts to serve underbanked communities, promoting financial literacy and delivering positive social impacts for its customers and communities.”
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