The Importance of a Good Value Proposition
One of the elements overlooked in the non-profit sector is the value proposition. The leaders of social organizations are great at identifying needs but are not often finely tuned to the granular needs of their target. There is a distinction between identifying a need and arriving at a great value proposition in an iterative way.
The question non-profits should be asking themselves is: why does the stakeholder want to engage with us? That question is the first step to truly tailoring the non-profit’s offering to the people who it seeks to impact and interact with.
Let’s take climate change, one of the most important challenges we must face, as an example. The demand-driven approach to addressing it shifts the burden of action to the general public. These are the organizations that push campaigns designed to incentivize people to change their behavior. They want them to use public transport, limit their use of single-use plastics, and to buy carbon-conscious products.
The logic is that when there is demand, the alternatives will follow. The other corollary of this demand-driven approach is that effects can be mitigated at an individual level, and when enough people do it, it can have a great impact. That’s a classic snowball effect.
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The effectiveness of these campaigns is dubious at best. There is pretty much no self-respecting individual who can seriously claim that climate change, a truly multi-faceted challenge, can be addressed only by changing consumption behaviors. Remember, climate change is mainly driven by gigantic industries around many of humankind’s essential needs like food, transportation, and electricity.
The elephant in the room is that humans are not good at sacrificing convenience now, especially when alternatives are readily available, for a gain far into the future. In other words, the majority of people will go for the cheaper and convenient alternative and discount the long-term consequences of their present actions. Most people will go for the flagship, feature-heavy phone instead of the expensive climate-friendly alternative. That means that while there are niches for sustainable products and big corporations can shove their CSR on our faces, the main drivers won’t change until there is mass adoption.
There is still hope, and that’s why I advocate for a value proposition-driven approach. Tesla is a good example. They provide a faster, safer, comfortable, innovative, and affordable (debatable) driving experience. There are people who buy a Tesla and believe that electric vehicles are the first step towards a transition to cleaner energy, but here is the most important part: there are people who don’t. There are people who couldn’t care less about climate change but still buy a Tesla. That’s the beauty of it: by having a great value proposition you can push products and services that help us transition towards a sustainable future.
Opportunities are there for the taking in the developing world as well. There is a whole energy ecosystem growing around small solar systems with flexible payment options for off-grid villages. There are well-funded startups actively improving these technologies. The almost 50M people who are buying these services are skipping the coal and oil and going directly to local solar energy while saving money compared to the current alternatives.
There are still challenges that these startups need to face, but the future looks promising. The key, again, is a great value proposition. These villagers are not thinking about climate change when they decide to buy these services. They buy these solar systems because they tackle a latent need, and they are better than the alternatives.
The concept of a value proposition is not limited to the client; it applies to any stakeholder. 180 Degrees Consulting, an organization that provides consulting services for non-profits and social enterprises is a prime example of having a clear value proposition to a key stakeholder: its volunteers. It is the largest university-based consultancy in the world with more than 5,000 active consultants. Even if one is extremely optimistic, it’s a stretch to think that busy students would spend hundreds of hours per year working for free to help social enterprises be more effective.
This all becomes clearer if we see it from a value point of view. When students join 180 Degrees Consulting, they improve their consulting skills, network with consulting firms, meet like-minded and ambitious people and improve their resume. As a bonus, they get to have a social impact. For all the students who apply, there is a clear and attractive need that 180 Degrees Consulting is addressing. It’s a recipe for success. In fact, its value proposition to students is so effective, they get to reject more than 60% of those who apply. Yes, they reject students who are willing to work for free for them. There are many other factors contributing to the organization’s growth year after year, but a great value proposition to attract volunteers certainly doesn’t hurt. There is clearly a lesson to be drawn here especially for those non-profits that struggle to attract volunteers.
A value proposition is not only relegated to the economics and business realm. There is an opportunity for the social impact community to think about how to achieve its goals by addressing the aching needs directly by adapting accordingly. It is an opportunity to think about what you offer and why people “buy”. It is an opportunity to try different approaches and fail. No wonder Silicon Valley is thriving.
In the cover picture: Climate Change Protests. Photo Credit: Unsplash
EDITOR’S NOTE: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com.