What is a Value Proposition and Why Does it Matter for Your Institution? By James Wilson III, PhD

Why does a potential student choose one school over another?   Economists and management scholars and practitioners suggest it comes down to the value proposition or in other words, the value that students and their families attribute to your institution.  Building on the quote from Warren Buffett, “Price is what you pay, value is what you get,”  if value is perceived to be greater than price, one assumes good value.

A value proposition is expressed as a statement about what value is being delivered to customers by an organization’s products and services.  Such values can differentiate an organization’s products and services from its competitors, thus answering the question: why should someone buy your products or services compared to the competition?  Such values as identified in Kim and Mauborgne’s Blue Ocean Strategy (BOS), might include:

  • Customer Productivity: efficient, less time or effort or money spent.
  • Simplicity: Eliminating complexity and mental hassle.
  • Convenience: When and where I want something like 24/7-365.
  • Risk Reduction: Risks include financial, physical, emotional.
  • Fun and or Image: The look, feel, attitude and style of an offering.
  • Green: environment friendliness.

Why is it so hard for most colleges and universities to clearly articulate their value proposition?  There are three challenges quite unique to institutions of higher education.

Challenge 1: Two-Tiered Value Proposition

It is common for an institution to have an “Overall” value proposition (OVP), while individual programs have their own, distinct value proposition (PVP).   For example, the campus may be in an urban setting with an excellent library and recreational facilities that benefit all programs.  The OVP for this campus is a kind of “public good” from which all programs can benefit.  But the economics program on this same campus may have a national reputation with several Nobel Laureates, or its medical program is affiliated with a renowned hospital.  Thus, the institution’s value proposition is two-tiered;  One acting like a public good for all the programs, with the sum of collective program value propositions refracting back on the university.

Challenge 2: Complexity of the Value Proposition

Higher education is blessed and challenged by the complexity of its value offerings.  Consider that the SAT/ACT guides suggest 118 questions to ask on a college tour.   Clearly, the idea of “value” is complex given the range of experiences, products and services provided by the typical college or university today.  The college tour questions attempt to identify the potential buyer experiential value a student may encounter at a school; but as anyone who has attended college knows  the value of one’s experience encompasses so much more than what may be clearly articulated.

Given this complexity, prospective students and their families may resort to reductionism, something undoubtedly fueling  the increased attention  on rankings, the most notable being the US News and World Report rankings.  These rankings attempt to simplify and reduce a student’s decision process by considering just a handful of things  such as faculty quality, financial resources, student quality, peer assessment, graduation rates, alumni giving, and graduate indebtedness, all intended to serve as proxies for perceived value.  However, there is often a gap between perceived value and what truly constitutes a high quality academic experience on any given college campus.

Challenge 3: Credence Value

An institution of higher education offers  potential value such as experiencing a rich life, getting into graduate school, getting a job in the field one desires, or getting a return on investment vis-a-vis strong earning potential.  By choosing to enroll at a particular institution, a student signifies her belief that some or all of these values are true. This makes higher education a credence good in terms of delivering value.   Statistics on job and graduate school placement, the degree of alumni giving, can enhance and validate trust that an institution does indeed deliver such value.  

Given these challenges, where to start in articulating your institution’s value proposition?

1.  Identify Your “Existing” Value Proposition

To start, list what you believe are the current values provided for your institution overall.  This can be a simple numbered list and should identify ‘overall’ values, then indicate specific ‘program’ values.  To start this process, sources of such value may be found in surveys by institutional research (like graduating student surveys) or routine surveys of faculty, staff, administration, and board members.   Informal focus groups among campus constituents can also be conducted with the intent of finding such values. None of this needs to be overly difficult and can be as simple as pulling a group of individuals together to ask them for their input about the institution’s values.   Of note: the focus at this stage is on the existing value proposition, not the aspirational value proposition.  Ideally the vision of the institution and the value proposition are aligned.  Here is a moment to pause as well and reflect on whether the data gathered supports current vision and mission, as well as marketing claims by the institution.

2.  Create a “Working”  Value Proposition to Vet with Important Stakeholders

Using the feedback received in the first stage, create a ‘working’ value proposition to share with campus constituents for feedback.  It is always easier for people to react to a list of values rather than to create a list from scratch.  Note the areas of overlap and omissions in the feedback received. Use this feedback to revise the list and provide a  third iteration of your values list.  Use this third  list for a final round of feedback and voting to further validate the degree of consensus on value. 

3.  Invent an “Aspirational” Value Proposition

As you compare your existing value proposition with your new ‘working’ draft, consider the following: 

  • Does your current mission and vision align with your ‘working’ draft?
  • To what extent does your ‘working’ value proposition provide a compelling basis for setting your institution apart from your competitors?
  • Is your ‘working’ value proposition viable?  Is it believable?
  • Does your ‘working’ value proposition provide a tangible means for long term institutional viability?
  • Can your ‘working’ value proposition be translated into an implementable strategy?

As informed by the Blue Ocean Strategy (BOS) method, it is critically important that you be clear about what your strategy intends “to do,” and what it will intentionally “not do.”.  In this way the value proposition serves as the differentiation strategy of the institution.  In considering the existing value proposition, ask these hard questions: 

  • What needs to be Eliminated, Reduced, Raised, and Created (this is the ERRC model from Blue Ocean Strategy) to implement a strategy given the particular goal given above?  

This is also where you can flex your creativity muscle by conducting a value creation exercise.   In today’s increasingly competitive environment, it is not enough to focus only on financial efficiency and cost cutting.  The institutions that will survive for the long run are also actively engaged in finding ways to retrofit their existing value proposition into new and profitable means of expression; in other words, to create new sources of value.  How to do this?  A simple scan of websites among your competitors can quickly tell you about new and innovative approaches on any number of fronts. There are also a number of companies that use sophisticated software to identify new sources of value creation.  On many campuses, the institutional research and marketing offices can be valuable collaborators in researching new potential sources of value.  The point here is that there needs to be an intentional strategy that someone is actively working to identify and manage the value creation process.

4.  Identify How You Will Deliver the Value Proposition

Bringing a value to life requires feasibility (can it be created and delivered), and financial sustainability (is it worth it).  How does the aspirational value proposition translate into implementation?  All values should  link to tangible activities, and all activities require either in-house resources or partners.  If you are unable to identify the activity for a proposed value, you most likely don’t know how to deliver the value.  Given the array of aspirational values, an evaluation of the strengths and weaknesses of the organization in delivering such value can be assessed, as well as the opportunities and threats that may emerge depending on whether the value is implemented.  Leadership will then need to decide on whether to invest in developing weaknesses into strengths, and where to find resources and partners to enact newly proposed values.

Effective leadership always comes back to vision.  And leadership visioning is the key to thinking about value creation and what to eliminate, reduce, raise, and create.  With no constraints anything is possible; and that can be  a problem.  Vision is key and this must be driven from the top,  supported by the values of the organization, and likely the mission.  In a sense all of these are up for grabs as this process evolves.  Figure 1 shows an example of ERRC (recall: what values to eliminate, reduce, raise, or create)  for Southern New Hampshire University, which saw an opening in online education and raced to scale to deliver more inexpensively, and to support massive advertising, promotion, and operational throughput to promote scale, given that vision.



·  Outsourcing media buying to external ad agencies

Use of actors and stock photography to represent SNHU students and experience


·  Lag in speed-to-lead times for calling prospective students

 ·  Loading time speed of website


·  National advertising and digital marketing spend

·  Efficiencies and scale up everything to drive down average costs


·  Website that works like a one-stop storefront

·  Standardized courses, and adjuncts who serve as facilitator of learning

·  Predictive analytics platform to enable automation and personalization

At the end of the day, the very survival of many colleges and universities in the future will rest on their ability to differentiate.  Differentiation is based on non-price value delivered to a customer.  Institutions of higher education have many opportunities for value creation.  In addition to vision, leadership needs to inspire the creativity and courage to tinker with the value proposition to create something new from the Overall Value Proposition and uniquely for each Program Value Proposition.  One needs to increase organizational intelligence to understand existing value and sources of new value to understand how to improve competitiveness.  Following this recipe can guide that process.

See here for more information about SNHU’s strategy: https://www.insidehighered.com/news/2019/10/08/how-marketing-helped-southern-new-hampshire-university-make-it-big-online

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