Practice Transformation Academy Webinar #5
Steven E. Ramsland, EdDCEO, Catalyst Health Resources LLC
November 15, 2017
Crafting Your Value
Proposition
Drucker’s “5 Most Important Questions”
The 5 Most Important Questions You Will Ever Ask About Your Nonprofit
Organization*:
1. What is our mission?
2. Who is our customer?
3. What does our customer value?
4. What are our results?
5. What is our plan?
Drucker, Peter F. 1993.
Let’s add one more:
What is our Value
Proposition?
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Agenda
• What is a Value Proposition?
• Understanding Customer Segments
• How to Craft a Value Proposition
• Q&A
What is a Value Proposition?
• A positioning statement that explains what benefit you provide,
for who, and how you do it uniquely well
• It describes your target buyer, the problem you solve, and why
you are distinctly better than the alternative
• Should show relevancy, quantified value, and unique
differentiation
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
What a Value Proposition Isn’t…
• Your Value Proposition isn’t:
– Your Mission Statement
– Your Values Statement
– Your Noble Purpose
– Your Organizational Capabilities Statement
– Your Motto
• Your Value Proposition isn’t really (typically) a statement about
your organization overall. It’s much more specific.
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
A Value Proposition is…
• Part of an organization’s business/operating model
• An element of your organizational strategy
• A reflection of the value you offer your customers
• A carefully crafted marketing message that:
– Describes why a customer should buy your product or service
– Is crafted to meet the specific needs of a specific, well-defined customer
segment
– Convinces the prospective customer that your product or service will add
more value or better solve a problem than your competitors
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
A Value Proposition Answers Three
Questions
Which Customers?
Which Needs? What Price?
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Which Customers?
In behavioral health, there are 3 main types of customers we typically focus on:
• Consumers of services
• Payers of services
• Community partners in the delivery of services
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Customer Segment #1: Consumers
• Demographics (age, sex, income, education)
• Geography
• Health conditions/needs
• Sociocultural factors
• Combinations of the above
Consumer markets can be segmented
by:
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Customer Segment #2: Payers
• State/local governments
• Foundations and other philanthropy
• Managed Care
• Commercial
• Medicaid
• Medicare
• Dual-Eligible
• Integrated
• Carved-out
• Managed Care Partners
• Employers
• Digital Health
• Combinations of the above
Payers can be segmented by:
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Customer Segment #3: Community
Partners
• Geography
• Service
• Population
• Size
• Resources
• Affinity Factors
• Competitive Factors
Community Partners can be segmented by:
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Which Customer Needs?
You can create value for a Customer Segment by better understanding that Customer
Segment’s needs.
The value you deliver may be:
• Quantitative
• Price
• Speed of access to services
• Performance & clinical outcomes
• Qualitative
• Program/Service design
• Customer experience
…Or a combination of benefits
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
“Value” is Defined by Customers
• “Accessibility” may mean:– To Consumers:
• Same-day access to onsite services
• Evening/weekend
• 24/7 access to virtual services via personal device
– To Payers:• 7 day and 30 day Follow Up After Hospitalization (FUH) HEDIS measures
• 24/7 access line
• Mobile, in-home visit within 2 days following a hospitalization
– To Community Partners:• Rapid response to referrals
• On-demand tele-psych consultations to PCPs
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Other Ways to Create Value to
Customers• Customization: Tailoring products or services to specific customer
segments or customer needs
• Convenience: Making services easier and more convenient to use
• Risk Reduction: Reducing risk of underperforming via accreditation, quality
management, shared risk, and performance guarantees
• Design: Differentiating your service with design that better integrates the
needs of people & the possibilities of technology
• Newness: Solving problems customers haven’t yet thought of
• Price: Similar value at reduced cost
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
5 Steps to Crafting a Value Proposition
1. Understand your organization
2. Understand your customers
3. Prioritize customer segments
4. Draft value propositions by target
customer segment
5. Develop go-to-market strategies, with clear value
propositions designed for target customers
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Step 1: Understand Your Organization
• Organizational Capabilities Review
• Organizational Strategy Review
There are 2 key components to an internal strategic
analysis—the starting point to crafting a Value
Proposition:
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Organizational Capabilities Review:
Key Questions
An internal analysis of strengths asks:
• What do we do really well?
• What are we most known for?
• What can we do that others can’t?
• What can we leverage to do something new?
• How can we deliver exceptional customer experience?
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Organizational Strategy Review
To start, it’s important to revisit your…
• Service line offerings
• Payer mix
• Target populations
…and make any necessary adjustments for
today’s market needs
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Organizational Strategy Review:
Key Questions
An internal strategic analysis explores:
• Where do we play?
• How do we win?
• What’s our potential?
• What are our risks?
• How will we move forward?
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Step 2: Understand Your Customers
A Customer Analysis Asks:
• What does the overall BH Market look like?
• What does the BH Market in our state/ region look like?
• Who are our potential target customers & what are their key characteristics?
• What do they value?
• What are their needs, requirements & preferences?
• Can we help solve a problem, or help them compete?
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Step 3: Prioritize Customer Segments
Identify the most
attractive customer segments
Understand their needs
Design a better value proposition
than the competition
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
How to Prioritize Customers
• First, add each customer group as a column in a spreadsheet
• Assign each group a value of 1-3 (1 = low, 3 = high) for the following criteria:– Market Size – how “many” of this type of customer exists in our market?
– Strategic Fit—how much do we want to work with this segment?
– Service Fit—do we, or can we deliver services that might meet their needs?
– Financial Opportunity – do we think they’ll pay for the value we bring?
– Capabilities—do we have the organizational capabilities we need?
– Accessibility – how easy is it to contact and sell to customers in this segment?
• Multiply the scores together and sort them from highest score to lowest
• Start testing hypotheses with the highest scoring segment, and work your way down until you’ve found your focus
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Step 4: Craft Value Propositions by
Segment
• Identify attractive target customers
• Design value propositions tailored to those target customers & your organization’s strengths
Crafting your Value Propositions:
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Value Proposition Template:
Example 1
For (target customers)…
• Who are dissatisfied with (the current alternative)
• Our service is a (new model)
• That provides a (key problem-solving capability)
• Unlike (the current alternatives).
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Value Proposition Template:
Example 2
Customer:__________ (who your customer is).
Problem:__________(what problem you’re solving for
the customer).
Solution:__________(what is your solution for the
problem).
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Step 5: Develop Your Go-to-Market
Strategy
Customer & Market
Intelligence
Value Proposition Definition
“Offering”
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© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Refining & Applying Your Value
Proposition• As leaders, our primary job is to discover our value proposition
and devise an optimal go-to-market strategy that delivers our
products/services (our solutions) to people (the market).
• A Go-to-Market Strategy is the process of getting market
feedback, refining our design, prioritizing, communicating, pricing
and delivering a unique value proposition to target markets.
Strategic Plan
GTM Strategy
Exceptional Customer
Experience
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
Summary
Be sure that your Value Proposition…
• Is based on what the customer perceives will add value
• Aligns with your organizational strategy
• Is something that your organization can really deliver to the customer
• Clearly & persuasively describes your approach and benefits
• Differentiates you from alternatives
© 2017 Catalyst Health Resources LLC. All rights reserved. | www.catalysthealthresources.com
If all you're trying to do is essentially
the same thing as your rivals, then
it's unlikely that you'll be very
successful.
Michael Porter
https://www.brainyquote.com/quotes/quotes/m/michaelpor391591.html
Closing Thought…
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