Experience and Ideas on 'The Elevator Pitch'
“Price is what you pay. Value is what you get.”
Warren Buffett, American investment entrepreneur
Most ‘Elevator Pitches’ that I hear frustrate me. I listen to some business people ramble needlessly about what they do in feature oriented detail that would take a 100 story elevator ride to the middle. Unintentionally, I have become a subject matter expert on elevator pitches through the book The One Hour Business Plan Foundation and my Strategic Business Planning course at the Wharton Small Business Development Center. An elevator pitch is defined as how you describe what you do or seek in the time it takes to ride in an elevator with a listener. In business this pitch is more aptly described as a value proposition. Investopedia defines a value proposition as “a business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.” Perhaps Investopedia expects too much from the value proposition. A more reasonable outcome might be to get the listener to ask for more information because they want to learn more. A more achievable outcome for any elevator pitch (value proposition) explains what value the recipient gets and progresses the sales process through a symbiotic relationship.
The value proposition is the head cornerstone in the foundation of any business model. It communicates to people what you offer that benefits them. If your offering benefits the recipient at the right time, why wouldn’t they be interested in learning more?
In one of my strategic business planning classes, a husband-and-wife team delivered the following value proposition to the class: “Pickled Willy’s offers premium pickled seafood (crab tails, halibut, and cod) from a family recipe through high-end retail stores, distributors, and directly to consumers (via the Internet) from Alaska.” While my adult students laughed at this value proposition, this pitch helped launch a successful company while most others laughing did not. It speaks to the value received, distinguishes from competition, and beckons us for more.
Having worked with and listened to literally 1,000s of value propositions I can definitely state that the CEO of a $200 million dollar company struggles with their value proposition often as much as the startup entrepreneur. Both need guidance. Entrepreneurial education can be challenging since entrepreneurship is as much of an art as it is a science. Furthermore, street credibility and sales skills help innovations tremendously which speaks more to the art of entrepreneurship. Regarding the science of entrepreneurship, I teach 5 basic building blocks of a value proposition from the customer’s perspective:
As an instructor and advisor I struggle slowing down business people to magnify their customers’ needs. We innovators are often so excited about our creations that we tend to rush through our customers’ needs much too quickly. A customer need based value proposition becomes inherently stronger than simply stating what you do. Assuming the entrepreneur has worked through these five building blocks of the value proposition, the final value proposition should be delivered verbally in 15-30 seconds focusing on the needs, benefits, and advantages (to the extent possible).
Alternatively, the entrepreneurs can simply state, “I work with people who need __________________. This benefits them by_____________________.
For example, my current value proposition is as follows:
“I work with entrepreneurs and business owners who need a business plan before they spend big money and invest years of time launching an innovation. I do this through my upcoming book The One Hour Business Plan™ Foundation (Wiley).”
This value proposition currently works for me. I enjoy watching people’s faces after I deliver it and often receive intriguing follow up questions. A business relationship often progresses which delivers my primary objective for my value proposition. Hope this helps and enjoy the elevator ride!