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Customer Value Proposition

Definition

Although the business model definition of Customer Value Proposition has evolved along the years, the idea of a perfect offering to build customer satisfaction has been always at its core.  

In the late 90, there was a generic business model concept that only considered how to get benefits from processes and resources. It consisted of the three-part formula: ‘content-structures-management’, devised to create value. Little by little, around the first decade of the 21st century, it changed into a growing common understanding that considers Customer Value Proposition as one of the most important parts of a business model. The remaining aspects consist of the profit formula, and the key resources and processes of the company.   

The customer value proposition (CVP) is the most important element of a business model – a singular and unique way to help customers to get a fundamental job done or a need solved. Firstly, the company must choose the specific market segment to serve. Market segments usually differ by needs, channels, relationships, and clients’ disposition to pay different level prices. The customer value proposition creates value for a particular market segment, with a special combination of elements. The value proposition can be based on qualitative elements (experience, design, novelty, personalization, convenience, etc.) or quantitative ones (speed answer, high/low price, etc.). 

Key resources and key processes of the business model are required for the delivery of the CVP. Therefore, the CPV singularity comes also from a holistic integration of all the resources and processes in action. Some CVPs rely on innovations while others can seem similar to pre-existing offerings with only a small difference or an additional attribute that provides the value. The CVP becomes unique because of the lack of substitutive offerings from competitors to do the same a job or to solve the same need in that concrete manner. 

A true costumer value proposition could easily satisfy the growing demand for ethical and sustainable production practices in leisure and cultural sectors in cities, such as cultural centers with a combination of urban-farm, eco-canteen, sewing atelier, vintage-market or sustainable clothes shopping. One example could be a restaurant and showroom: a seasonable offer of proximity products in menus, aligned with textiles and fabrics from emerging materials using fruits and vegetables, like bananas, pineapples, oranges, grapes, etc. – all of them neo-materials from the agri-food industry. The double costumer experience could be a step forward to deeply understand some common aspects in both sectors: food and fashion.      

-  Yearly directory of ethical brands (The good goods). Class Comparative and practical analysis of the different costumer value proposition of every product/service included to know the shared points. (https://www.thegoodgoods.fr/) 

- Bananatex reinforces agriculture and forestry to obtain a technical fabric made from banana fibre, to produce bags, whilst enhancing biodiversity and the economic prospects of its farmers. Exploration of the customer value proposition ingredients of Bananatex: Is it a real sustainable product? (https://thesustainableangle.org/banana-fibre-bananatex-qwstion-an-interview-with-hannes-schoenegger/) 

a) Academic/peer reviewed 

Amit, R., & Zott, C. (2001). Value creation in e‐business. Strategic management journal, 22(6‐7), 493-520. 

Johnson, M. W., Christensen, C. M., & Kagerman, H. (2008). Reinventing your business model. Harvard Business Review, 86(12), 59–68. www.hbr.org 

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers (Vol. 1). John Wiley & Sons. 

Zott, C., & Amit, R. (2009). Innovacion del modelo de negocio: Creacion de valor en tiempos de cambio. Universia Business Review, 23, 108–121. 

b) Other sources  

Video: QWSTION – A TEXTILE (R)EVOLUTION)  https://vimeo.com/294328565 

https://www.premierevision.com/en/white-paper-confirmation/