Sunday, November 09, 2014

What In Heck Is The 'CVP', And Is It Safe To Ignore It?

 

 Advertising makes me laugh sometimes.

Just a couple of years ago, no one had heard of the CVP (Customer Value Proposition). Yet today, it's apparently the most vital tool in marketing.

It's as if astronomers suddenly announced a new planet - bigger than Jupiter - sitting right in the middle of our solar system, which had hitherto gone unnoticed.

Is that plausible?

For anyone who doesn't know, the Customer Value Proposition is an equation of the value that a buyer will derive from the product. For example, the CVP for the Smart car might be "All the safety and driveability you get in a regular car, but at a lower price and easier to park."

So does the CVP replace the USP?

In reality, the poor old USP went out the window a long time ago, and any brand that talks about being the biggest, the fastest etc nowadays just sounds like a snake oil manufacturer.

Next came the ESP (Emotional Selling Proposition) which was based around how a brand would make you feel. So Haagen-Dazs ice cream, for example, felt sexy.

The problem with both the USP and the ESP is that they ignore price, and they ignore all the other options a consumer has. The truth is, price comes into nearly every decision. As does an assessment of the alternatives. People don't just buy an ice-cream because it's the creamiest, or because it promises to make them feel sexy. They buy it when it offers those benefits at an acceptable price, and when there is no more compelling option available.

What the CVP captures is the real calculation that consumers are (perhaps unconsciously) performing in their heads.

What it's not is an advertising proposition. No one should be advertising an equation, for God's sake. Good advertising is single-minded.

But where the CVP can be really useful, is in pointing to what the proposition should be.

Either highlighting a strength on one side of the equation, or bolstering a weakness on the other.

Because with any purchase, there is always a trade-off. The manufacturer has to make a margin, so if he's going to charge you $100, he can't provide you with a product that's worth $100, he can only provide you with a product that's worth $70. Or alternatively, if you want a product that is worth $100, you are going to have to pay $130 for it.

For example, Aldi has great prices, but the products are not the high-quality brands you are used to. And L'Oreal makes great cosmetics, but they're not cheap.

From here, it's relatively easy to see what the advertising needs to be. 

Aldi has to reassure people that the products are actually pretty good. (See ad above). And L'Oreal has to tell you that you're worth it.

So that's my take on the CVP. It doesn't replace the proposition. But it can help us write the right one.

Are people talking about the CVP at your place? And do you think it's useful, or yet more meaningless jargon?

13 comments:

Ben Kay said...

I had never heard of it before reading this, yet I was still able to function as a Group Creative Director on the world's biggest brand.

Does that answer your question?

Jason Lonsdale said...

Meaningless jargon... Clients have latched onto it as a new reason for having interminable workshops and meetings in order to generate a document which states the blindingly obvious.

Anonymous said...

Hey,
I find clients are into it. But it's lazy. Hence I use the SSP - the Strategic Selling Proposition
Paul A

Original Richard H said...

It's an easy way for planers to avoid writing a proposition – as that takes both time and customer insight (which seems like an increasingly rare commodity).

Anonymous said...

Yet another two week process by the suits that could be done by anyone with a bit of common sense.

As you show at the end of the article.

Anonymous said...

We use the BLPP. Brand Leverage Potential Proposition.

Scamp said...

I do hope you're shitting me.

Anonymous said...

No bullshit. It's how we differentiate ourselves from other agencies.

Anonymous said...

Het Scampo. Why is a BLPP any more ridiculous than a CVP?

Scamp said...

Because it sounds like the noise someone makes just before they throw up.

Anonymous said...

The problem with the BLPP though is that there aren't enough repeated letters in the name to really catch on.

So we use the BBLLPPBPBPBPPPPFFF instead... it's the sound you make in the face of meaningless self-aggrandized promotional wankery.

Anonymous said...

Firstly, I do think it's just another bit of marketing jargon to explain something we were all aware of before, but would previously use unabbreviated words (heaven forbid).

Even it was something new though, what about when the price tells you little about the market? When it's in the middle, for instance? Or when it's the same price as its competition?

Scamp said...

Ah, I don't think it always has to contain price. For example, the CVP of the Smart car might be "you're giving up a little bit of safety compared to regular cars, but you're gaining a lot in terms of fuel efficiency and how convenient it is for the city."