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Points of parity, points of difference, and points of contention are the inputs for developing the supplier firm’s value proposition to the customer. When supplier managers use the term “customer value proposition,” what specific meaning do they have in mind, and is this the same meaning that others have for this term? We have found in our research that there is considerable variation in what managers mean in their usage of “customer value proposition.”⁷

From our research we can classify the substantially different ways managers use customer value proposition into three basic alternatives. We provide these alternatives in table 2-1 and organize our exposition of them to address four fundamental questions that distinguish the alternatives from one another:

TABLE 2-1

Value propositions in business markets: Which alternative conveys value?

Source: Reprinted by permission of Harvard Business Review. “Customer Value Propositions in Business Markets,” by James C. Anderson, James A. Narus, and Wouter van Rossum, March 2006. © 2006 by the Harvard Business School Publishing Corporation; all rights reserved.

1 What does the value proposition consist of?

2 What customer question is the supplier attempting to answer with the value proposition?

3 What is required for a supplier to construct the value proposition and for the sales force to deliver it?

4 What is a potential pitfall of the value proposition?