The customer value proposition (CVP) is what a customer receives when he/she pays for a product or service. It is a crucial topic for discussion when understanding how and why a business makes sense. If the CVP isn’t compelling, then one would think that a private equity deal involving the business wouldn’t be compelling either. There are both tangible and intangible aspects to the customer value proposition (CVP), but two dimensions often divide it in private equity:
Not only should the private equity business owner be able to communicate the customer value proposition (CVP) clearly, but also it should be reasonable and believable. Some of the components that the customer value proposition (CVP) should include are:
If these aren’t clear and believable, especially to the private equity partner, then it’s difficult to understand how the business will survive and grow. With markets being competitive, survival and growth isn’t as easy as it may sound without a good customer value proposition.