The five sources of value

The five sources of value are the ideation frame used in the offer phase of Offer Development and Innovation. Value for a customer comes from five places, climbing away from price: their bottom line (cost taken out), their top line (revenue put in), their business reputation, their strategy and organisation, and their own end consumer. The order matters. Most suppliers can only argue the first, which is why most conversations end at procurement.

The discount is not on the list because a discount is value transfer, not value creation: it moves money from your margin to theirs and creates nothing. A proposition built on the upper sources is harder for a competitor to copy-paste, which is the whole point. The frame is used to diverge, generating offers across all five, before a hard cull converges on the ones the customer would pay more for.