Posts tagged ‘Offerings’

A value proposition is the entire set of resulting experiences from which your customer derives value from what you.  A good value proposition will have an enormous number of elements, or individual value outcomes.  The more you have, the easier it is to promote your offering in a compelling way.

High Value!Synergy

It is not unreasonable to suggest you need to identify at least 50, and likely up to 100 different things that your customers will find of great comfort and value if they buy from you.  Some elements of what you do may be inferior to similar elements in other suppliers’ offerings, but it is the overall package that wins.

Focus on customer experiences

Beware of the tendency to focus on internal stuff that’s of no consequence to the customer.  Customer experiences generally revolve around Quality, Price, Service and ‘Intellectual Capital’.  Social Capital – the value in your customers, suppliers, vendors, networks, referral sources, alumni groups, joint ventures, alliance partners, professional bodies, reputation and so on – is the least exploited form of Intellectual Capital, yet is the most highly valued by customers.

Communicate Value

By  emphasising total quality service and transformation, you offer a superior value proposition.  But please, don’t embellish the truth.  Don’t kid yourself that things your customers expect to be able to take for granted will be compelling differentiators.  No one expects ‘poor’ quality  or ‘lousy’ service!

In summary….

Communicate value outcomes with numbers, free  information, rapid results, and exclusive viewpoints all served up in easily digestible bite-size chunks.

Customers actually aren’t price sensitive –  They’re value conscious!

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David Winch

david@davidwinch.co.uk

Guest Author:  David Winch works with professional service providers to help them overcome their fear of selling and to get paid what they’re worth.

During his first budget speech in the Summer the current chancellor announced that the standard rate of VAT would be increased from 17.5% to 20% on 4th January 2011, the third rate change in two years. 

If you are using the flat rate scheme, this change will affect you too.  Be sure to check your new rate on the HMRC website.

Administrative Burden

For business that supply goods and services to other VAT registered businesses, the burden will be one of administration.

  • The default rates in bookkeeping systems such as SAGE need to be altered – ask for help
  • Business owners and bookeepers need to be clear about the tax point being used – the time of supply is important.
  • If you are using the Cash Accounting Scheme it is imperative that you can identify payments received on or after 4th January 2011 that relate to supplies made prior to that date, to be able to account for them at 17.5%
  • Make sure your book keeping is as up to date as possible, confusion surrounding work/supplies that span the VAT change are likely to be exacerbated if you are behind with your paperwork.
  • If you display prices inclusive of VAT you will need to be prepared to change literature/brochures/websites etc.

Financial Burden

But for business such as tradesmen and retailers that supply goods and services to non-VAT registered consumers, there are additional considerations as the change may have a significant financial impact.


  • How price sensitive are your customers?  Will they find a cheaper alternative or simply stop purchasing your offerings if you add another 2.5% to your prices?
  • If you don’t increase your prices, can your business afford the reduced margins?  If you don’t increase them now, when?
  • Speak to your customers, they may be willing to pay a deposit in advance of receiving your goods and services to take advantage of the current VAT rate. (For full details on whether this ruling can apply to your business click here )
  • Ensure you have procedure in place that will allow you to measure the amount of work carried out up to the date of the VAT rate change, such as detailed timesheets, as you are entitled to split your invoice.  i.e. work performed in 2010 charged at 17.5% plus work carried out in 2011 at 20%.

Effect on Economy

The Chartered Institute of Personnel and Development has predicted that the VAT rate increase will result in the loss of an estimated 200,000 UK jobs.

The effect on an already under pressure retail sector is going to be huge, I don’t think anyone dare to hazard a guess at how huge.


We have been fortunate enough to benefit from one of the lowest rates of VAT in Europe for many, many years, but will this increase really have a significant effect on our huge deficits?  I am not convinced.


For guidance on how to implement the change and minimise the impact on your business, please get in touch.

Another easy to read article about the VAT increase and price sensitivity : What’s a small business to do?  

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.