Remarkable customer experiences are the result of delivering greater than expected value to your customers. Every kind of organization – from start-ups to multinationals – have to continuously create and deliver value propositions that not only exceed the customers’ expectations but which are also greater than that of the competition.

When designing for remarkable customer experiences designers are often confronted with countless innovative ideas that need to be synthesized and bundled into dedicated value propositions. While the concepts of customer value and value propositions are admittedly a bit abstract (see “A Framework for Creating Customer Value”), the NABC (Need, Approach, Benefit, Competition) framework can help to better understand and sharpen the value proposition of your product or service. The framework has been developed by Curtis Carlson and William Wilmot and has been summarized in their book “Innovation – The Five Disciplines for Creating What Customers Want”.

To sharpen your value proposition they suggest to answer the following four questions:

1. What is the important customer and market Need?

2. What is the unique Approach for addressing this need?

3. What are the specific Benefits per costs that result from this approach?

4. How are the benefits per costs superior to the Competition’s and the alternatives?

Here is an example how to apply the framework to describe the value proposition of a video-on-demand system.

Need: Movie rentals represent a $5 billion business opportunity that you currently cannot access. The only parts of rentals that people really dislike are the obligation to return the tapes plus late fees. Customers find that it is inconvenient and wastes time.

Approach: We have developed a system that allows you to provide videos on demand to your customers using your cable system, with access to all the movies of Blockbuster. Our approach makes use of one of your currently unused channels, with no changes to your system. In addition, you do not need to invest any capital. Each movie costs your customers $6.99, the same cost as a rental at a video store.

Benefits per costs: You will receive $5 of new revenue per movie rented, with a margin of 20% after paying for the movie costs. Your customers will have all the pause and fast forward functions of a VCR when watching the movie, and they do not have to return the movie when done. Late fees are gone. We estimate you could capture a market share of 20%.

Competition: Our system is patented, and it is the only one to include all of these features. Online rentals represent new competition for both you and us, but they have a handling-cost disadvantage of 75 cents per tape. Sending videos back is inconvenient, plus they cannot provide spontaneous purchases.

To improve your own value proposition, use these sentences as a starter to describe it.

Need: My customer’s needs are …

Approach: My approach to satisfy that need is ….

Benefit: The Benefits per costs of my approach are …

Competition: My benefits per costs are superior to the competition and alternatives because …

More information about the discipline “Value Creation” and the other four disciplines “Important Needs”, “Innovation Champions”, “Innovation Teams” and “Organizational Alignment” can be found in the book “Innovation – The 5 Disciplines for Creating What Customers Want”.

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