ShareThis

ShareThis

• What do they all want that your business to do or provide?
• Esoterically what is the most important to them?
• What is it about the development of your proposition that will change things for them for the foreseeable future?

Once you’ve found the common denominating need you can determine what it is that they are in search of and develop your value proposition around that need. Keep in mind that your the purpose of your proposition is to identify and satisfy an unmet need that your target market possesses.

The answer to that question is easy. Your value proposition can equip you with the following benefits to your business:

• Create a strong differential between you and your competitors
• Increase not only the quantity but the quality of prospective leads
• Gain market share in your targeted customers
• Acquire enhancing tools that will help you close more business
• Improve your operation efficiency

You can get started developing your proposition. Just remember that an effective proposition describes what you do in terms of tangible business results:

“Mr Customer I do this (you’re looking for it) and that benefits you this way (which is where you want to be)…”

It draws interest and shares a success story within a few words. Here is an example of one of the best value proposition that belongs to a sales consultant:

Our clients grow their business typically by a minimum of 30-50% over the previous year. They accomplish this without working 80 hour weeks and sacrificing their personal lives.

Now, that proposition has power and gets the required attention.

ShareThis

Ask western policymakers how they intend to squeeze growth from their sluggish economies and most pin their hopes on higher exports. That makes exchange rates an especially sensitive topic. A weaker currency improves the competitiveness of a country by making exports cheaper. It also encourages domestic consumers to switch from expensive imports to domestic goods. The Economist’s exchange-rate scorecard, the Big Mac index, shows that currencies continue to be cheap in the developing world but overvalued in Europe.

The index is a lighthearted attempt to gauge how far currencies are from their fair value. It is based on the theory of purchasing-power parity (PPP), which argues that in the long run exchange rates should move to equalise the price of an identical basket of goods between two countries. Our basket consists of a single item, a Big Mac hamburger, produced in nearly 120 countries. The fair-value benchmark is the exchange rate that leaves burgers costing the same in America as elsewhere.

Asia remains the cheapest place to enjoy a burger. China’s recent decision to increase the “flexibility” of the yuan has not made much difference yet. A Big Mac costs $1.95 in China at current exchange rates, against $3.73 in America. Our index suggests that a fair-value rate would be 3.54 yuan to the dollar, compared with the current rate of 6.78. In other words the yuan is undervalued by 48%.

Other Asian currencies such as the Thai baht and the South Korean won are also undervalued. The Brazilian real is one of the few emerging-market currencies that is trading well above its Big Mac benchmark. With interest rates high—the policy rate now stands at 10.75%—Brazil has attracted lots of attention from yield-hungry investors. Burgernomics suggests that the real is overvalued by 31%.

The Big Mac numbers should be taken with a generous pinch of salt. They are not a precise predictor of currency movements. The bulk of a burger’s cost depends on local inputs such as rent and wages, which tend to be lower in poor countries. Consequently PPP comparisons are more reliable between countries with similar levels of income.

So it is particularly interesting to see that on a burger basis the euro is still overvalued when compared with many other rich-world currencies. Sovereign-debt worries and soggy growth rates have helped shift the currency towards its fair value over the past 12 months. A year ago the euro was overvalued by 29% on the burger benchmark; that figure is now down to 16%. (Britain’s currency has gone from being mildly overvalued this time last year to slightly undervalued now.) And the single currency has been moving back up again in recent weeks, on hopes that stress-test results, which were due out on July 23rd, will shore up confidence in Europe’s banking system.

Other currencies are dearer still. Investors looking for a safe place to put their money have sought refuge in the Swiss franc. Despite attempts by the Swiss central bank to stem the appreciation, the Swiss franc is overvalued by 68%. Those on the hunt for a value meal should also steer clear of Scandinavia. In Norway a Big Mac would set you back by 45 kroner or $7.20, nearly twice the cost in America.

More

ShareThis