I often tease the overly liberal use of businesses terms like competitive advantage and disruptive technology. My mischief is an attempt to draw attention to the missed opportunity to use these terms precisely, as their authors intended. Often, one of the great business thinkers coined a term and gave it a clear and strong definition to provide a tool for rigorous analysis and decision making. But sadly, in an attempt to sound windswept and interesting (as Billy Connolly likes to say), people often use them to mean….whatever they want to mean.

Here’s another example of how a powerful concept has become diluted and cliché’d. I often hear people say “what is the value proposition?” in relation to a product or service. Sometimes, I respond by asking if they mean “what does it do?”. They usually confirm this. So, then I ask “why didn’t you just say that?”.

Harvard’s Professor Michael Porter gave us this phrase. He argued that a good strategy must have a clear and unique value proposition. And he defined the term as the answer to three questions.

First, who are you targeting? Technology marketing legend Geoffrey Moore often writes about a process owner that is ‘in pain’. My experience is that they are in pain because the process needs to run faster, better, cheaper, and/or safer.

Second, which of the targets’ needs will you serve? One of Porter’s Harvard colleagues, Professor Clayton Christensen, encouraged strategists and marketers to think about the ‘job’ that needs to get done. He especially advised new market entrants to always do this when the available solutions are complex and/or expensive?

Third, how will you sustainably make a profit? To answer this, you need to research what the targets in question 1 will pay to get the job done in question 2. Then you need to ensure that your resources and capabilities can sustainably deliver a unique solution at an acceptable profit.

So, can you answer these three simple questions when discussing a product or service?  If not, then there is no clear value proposition and no strategy. How will you then execute successful marketing campaigns, deliver the right sales training, build the right partnerships, and prospect in the right places?