From Good to Great: The Game-Changing Power of Value Proposition with Joel Magalnick

From Good to Great: The Game-Changing Power of Value Proposition with Joel Magalnick

Kelly Kennedy: Welcome to episode 136 of the business development podcast. And today we're chatting all about value proposition with Joel Magalnicky stick with us. You're not going to want to miss this.

Intro: The Great Mark Cuban once said business happens over years and years value is measured in the total upside of a business relationship, not by how much you squeezed out in any one deal.

And we couldn't agree more. This is the business development podcast based in Edmonton, Alberta, Canada, and broadcasting to the world. You'll get expert business development, advice, tips, and experiences. And you'll hear interviews with business owners, CEOs. And business development reps. You'll get actionable advice on how to grow business brought to you by capital business development, capitalbd.ca. Let's do it. Welcome to the business development podcast, and now your expert host, Kelly Kennedy.

Kelly Kennedy: Hello, welcome to episode 136 of the business development podcast. And today we have an absolutely amazing, amazing returning guest. We are thrilled to bring back Joel Magalnick. A seasoned professional with a dynamic career spanning technology,

journalism, marketing, entrepreneurship, and academia. With roots as a developer during the early stages of the internet, Joel's journey has been marked by a relentless pursuit of innovation and adaptation. Transitioning seamlessly into journalism, he spent over a decade at the helm of a community newspaper, where he honed his storytelling prowess and deepened his understanding of local communities.

Joel's entrepreneurial spirit led him to found several app based startups, where he played pivotal roles in their inception and growth. Alongside his entrepreneurial ventures, Joel has also shared his expertise as an instructor at esteemed institutions, such as Wenatchee Valley College and McEwen University, where he has shaped the minds of future professionals in digital communication and user experience design.

Leveraging his diverse skill set and experiences, Joel launched North Then West. A consulting practice dedicated to helping companies define and refine their value propositions. With a keen eye for market positioning and a knack for strategic thinking, Joel empowers organizations to refocus their strategies and emerge as leaders in their respective industries.

With a finger on the pulse of digital innovation, Joel's launched startups, shaped young minds at universities, and now as the founder of North then West, he's guiding companies to redefine their value propositions and lead in today's ever evolving market. Joel, It's an honor to have you back on the show.

Joel Magalnick: Thanks so much for having me back. I'm really psyched to be here. This is, this is great.

Kelly Kennedy: I am really, really psyched to have you. And we talked about this, you know, at the beginning of the episode. Just by some crazy, weird coincidence, your very first episode with us was episode 36, Discovering Your Company's True Value Proposition.

That was 100 episodes ago from today.

Joel Magalnick: Yes, and man, what 100 episodes it's been, huh?

Kelly Kennedy: It's been a ride for sure. For sure. We couldn't be more grateful.

Joel Magalnick: That's great. Yeah, you know, and even, you know, we're thinking about a year since we did our last recording as well. And, you know, Evolution has occurred, for sure, as well as it should for any business out there.

Kelly Kennedy: Totally. And you know, me and you have had plenty of conversations outside of this show too, like, you know, we both live in Edmonton, we've met before, we haven't gone to lunch enough, but in all fairness, that is not your fault. That is my fault. I've been so bloody busy. But we need to change that ASAP.

Let's do it. I'm in. But value proposition is something that is so So near and dear to me, you know, in business development, value proposition is a gigantic part of the job. It's required absolutely everywhere. And yet it's something that gets so little time, so little discussion in many, many boardrooms.

And yet it should be. A prime discussion in all boardroom.

Joel Magalnick: Yeah, I agree. And actually, I think what we should do is is start by defining what value proposition is just in case there's anybody out there who's, who's not really sure, maybe has heard the term and just kind of nodded and smiled like, yeah, okay, we'll, we'll, we'll do that for sure.

So to me, the way that I define it is it's almost like a Venn diagram of thinking about what are the needs of a customer? How do your products. Or services that you offer meet those needs. And then third, how do the people that you have on your team work with your customers to make sure that they understand and get the most out of those products.

And so it really is pulling together those customer expectations. And offerings that you have as a leader.

Kelly Kennedy: Yeah. Why do you think it is such a hard discussion to have as a company? I

Joel Magalnick: think it can be any number of reasons. And it depends on the type of company that you're talking about as well. So if you're an established company, you've been around for a long time, you've had growth, a lot of that growth has been organic.

So you started out as one thing and, you know, old school companies maybe started out like, Hey, there's a need for us to, you know, manufacture and sell socks of, of all things, let's say. And as time went on, there was a realization, like socks are good, but t shirts are also good and everyone wants to wear a t shirt.

So we're going to do that. And there wasn't a whole lot of intention in that planning. As a company went from socks to t shirts, to underwear, to pants, to whatever it is. And as there was some sort of opportunity, companies jumped after it and it was fine. And, you know, they made money and they had decent profits and that was all they needed to do.

But as we've started to see. In the past, I want to say past 20 years, since the internet really started to take off that we have a lot of companies that are coming from overseas that can make a product of similar or greater quality for much cheaper. And so that's one thing that occurs. It could be that there are other people in your community or in your particular space that have created some sort of innovations in that space.

In that space that make it more difficult for you as a leader to be able to compete because your customers are seeing something a little bit shinier or a little more interesting or getting their needs better met. And so because there hasn't been that level of intentionality over time, the the, the need to really step back and think about these are the things that we offer, and this is why that word why is going to be hugely important.

And I think we're going to be hitting that word quite a bit throughout this conversation of is why do we exist? Why do we make these products and why is it important for the products that we make? Why is it so important for those to satisfy our customers and then asking those questions, who are our customers and who should our customers be?

Because if you're saying everybody, even if you're Amazon, if you're saying everybody that, that you're, you're wrong because there are people who actually don't need Amazon, they need something a lot more niche or something that, you know, that Amazon, Amazon doesn't sell. If you're a much smaller business.

Then very much so you need to think about who those customers are and how you meet them, their needs and figure out where they are so that, so you can serve them.

Kelly Kennedy: Yeah, yeah. Either way, I think the important takeaway and I want everybody to walk away from this episode, sitting down and having a conversation about value proposition.

I hope that that is the takeaway from every single person who listens to this episode. If it's been. Six months, if it's been two months, if it's been a year, God knows longer, it is time to sit down again and reevaluate your company's value proposition, figure out what you're doing great and what you could be improving upon.

Joel Magalnick: Yeah, the thing I didn't mention is newer companies, and this is where they can really come in with much more intentionality from the very beginning and say, hey, you know, we see a pain point, there's a problem that needs to be solved. Right. We're going to solve that, but really digging in and figuring out as we solve this problem, these are who our customers need to be.

There could be a whole group over here that we don't serve and that's okay. And, you know, maybe at some point you will get there, but start small. Build really well, and then expand out.

Kelly Kennedy: Totally, totally. And Joel, like, I would say too, you have the most passion for value proposition out of anybody that I have ever met.

I know when we had our first kind of meeting and conversation and our very first interview together, I remember leaving that thinking, my gosh, like, he is on to something. How I couldn't believe it because I've never seen a company that's focused on value proposition strictly before. North then West is so unique in that, but I think it's unique because you're unique and you truly have a passion for value proposition and helping companies succeed.

And it literally just like reverberates off of you. And I love that about you. But one of the things that I really wanted to chat about, and I know we have a lot of new listeners, like the reality is a hundred episodes ago, long time ago. How did you end up developing this passion for value proposition?

Joel Magalnick: I would say that it's something that has been at the edge of my consciousness for years and years.

And so as we mentioned, I was the I run a small media company, small newspaper for a very long time. I've done a lot of work in the user experience space. So user experience design being you've got a website, you've got an app and you're trying to figure out how do I make. This work best for my users so I can run them through a journey so I can, you know, fulfill this, this call to action of making a purchase or buying tickets or doing, you know, signing up for a newsletter, whatever that is, of making those be the most seamless and smooth experiences possible.

And so pulling those things together, I'm doing a lot of work in marketing and content marketing as well. Kind of gave me this realization that differentiation. For nearly any business is hugely important. And so the natural progression from just differentiating yourselves to actually understanding the intentionality of why we're differentiating ourselves and establishing the importance of the products that were services that we're offering.

That's really what kind of brought me into this idea of like, Okay, we're, we know that this is what value proposition is. I haven't really seen anybody else focus on value proposition specifically. It's usually. Either you know, something that gets tossed in as part of a larger package or doesn't get discussed at all.

And so, you know, I saw my opportunity and I took it.

Kelly Kennedy: Yeah. Yeah. And like, talk about North then West, what is it that you actually do at North then West?

Joel Magalnick: So there's a, there's a few things. So there's two primary services that we offer. And the first one actually being. Designing value proposition. And so speaking with my clients and, you know, really getting a sense of who they are as an organization, see where they may need help with managing change or, or making change to begin with.

And looking at how the customers view them and looking at how their employees view them and then how they, you know, we've mixed those two parts together. And then, you know, even if necessary, looking at the products to make sure that the products that they have are, they're being offered properly, or, you know, actually have a real place in the market and then, you know, getting into some of that marketing as well.

And some of that positioning and segmenting and really establishing who those customers are. And then the other part of this, once we feel like we have a reasonably good level of value proposition that we can bring out to the world is another service that I would say I offer it less, or I implemented it less than the value proposition proposition itself.

It's called category design. You know, a lot of times we think about it as niching or finding a niche. And that's the idea that any company. That feels like it wants to be differentiated from the the rest of their marketplace figures out their own category. And as they figured out their own category, they are able to jump ahead of their competition and let everybody else chase them.

Kelly Kennedy: Nice. Nice. One of the things that you had kind of stopped on there was how the employees view the company. Interesting. Elaborate on that.

Joel Magalnick: Yeah. Yeah. So, any company, doesn't matter how big you are, you're going to run into people who Think that you have one mission when in fact, you know, maybe that was the mission 10 years ago or five years ago.

Somebody has moved on, but nobody really communicated that to them. Or sometimes people are just resistant to change and don't get that. Like, Oh, actually we're kind of. You know, we're evolving, but you know, some of these employees are staying behind. And so the, the communications aspect and the the morale aspect and the autonomy aspect is something to me that's really important.

And you know, the clients that I take, I want this to be important to them. It's part of the reason that that I'll say yes, is that they are thinking about. You know, how do we meet the needs of our employees? Because happy employees make for better morale. And customers can see that.

Kelly Kennedy: Totally. Totally.

I never thought about it from that standpoint. That, like, technically, you would think that the, like, at least to me, I feel like I would make that assumption. It's a dumb assumption. I'd be like, oh yeah, the employees know what we do here. But, like, what you're saying is, they might not.

Joel Magalnick: Not always. Yeah, it's kind of interesting.

Sometimes the employees know exactly what they do and the management doesn't.

Kelly Kennedy: I've seen that.

My gosh, yeah, it's just so important. It's so overwhelmingly important and yet it just gets swept under the rug or gets part of a sales discussion. But value proposition is not a sales discussion. It's a fun discussion. Full company discussion.

Joel Magalnick: Yes. And, and that is actually one of the things that I really haven't seen anywhere is that a lot of times when people are talking about value proposition, they're talking about the specific product or service, and I wanted it to be much more holistic than that.

Kelly Kennedy: Yeah. Yeah. And so you really do, you take a full company stance on this, you look at every aspect and then say, here's what the value proposition really is, or here's what we think it is. Do you ever look at a company and then are like, Hmm. I think your value proposition is something completely different than you do.

Joel Magalnick: I've had a couple of instances where that has been the case. And when I have conversations with my clients, some of them are easy, some of them were all smiles and happy, and some of them are challenging, difficult conversations. Yeah. And sometimes those are the ones that are, oftentimes those are the ones that are the most meaningful.

You're, you're giving people a moment to sit back and hopefully reflect and say, okay, wow, maybe this is where change needs to come up.

Kelly Kennedy: You know, like me and you have actually spoken with, with a mutual company and I spoke with them first and it was a really interesting conversation because when I was done, I was like, you know what, 100 percent I can help this company, but you know what?

We need more time on the value proposition. And then I actually referred them to you and I think they ended up becoming a client of yours.

Joel Magalnick: Yeah, and, and we are, you know, I would say, Very close. You know, by the time our listeners are hearing this, they will be very close to completing that first, you know, the first iteration of their value proposition implementation.

Kelly Kennedy: Amazing. Amazing. Yeah, it's one of those things that business development, you know, we're great at helping with value proposition. We're great at helping to identify, but even business development. Sometimes needs a little helping hand. And in my case, that's where Joel came in, right? And the reality is that it's very hard to sell or to market a product effectively if you have not done a great job at identifying the true value of that product or service.

If you're not able to show something tangible, right? And I think sometimes that gets, it gets left in the mix, right? You need, Value is so critical. It's so critical to business development, but it's not always obvious.

Joel Magalnick: Yes, this is true. And then the other part of that too is that we can come up with a, I'm going to call it a quote unquote, quote unquote, final value proposition for a client.

And a year later, based upon growth, based upon you know, market conditions, anything like that, that that value proposition will change. And I'm not saying, Oh, you got to hire me back and do this. But I am saying you need to revisit your value proposition at minimum every year.

Kelly Kennedy: Yeah. Yeah. And would you say that anytime that there's a major change in an organization, they should also do that exercise?

Joel Magalnick: Yeah, I would. And it, it really depends upon what a major change looks like. If we're talking about you know, a brand new product that is meant to be their flagship product for sure. Absolutely. If you're talking about a huge scale up and growth on employees or number of customers, then absolutely.

Because a lot of those customers may have a disconnect with what your current offerings are. And if, you know, there's a major change, not to your company, not to your products, not to your staff size, but to the market itself, to those items outside of your control, then it's also very important to revisit that value proposition because it could be that your market is moving on and you're staying still.

Kelly Kennedy: Yeah. What about like the change out of key employees? I could see that, you know, being a tough one too.

Joel Magalnick: Yeah. And I would say that that is something I don't know that that's. As important to be looking at value proposition, unless when we're talking about a key employee, there's somebody who is leading your product or leading your customer experience or leading you know, your, your HR, that sort of thing because they may come in with a philosophy that's new and different.

And and this is where change management needs to occur because this is where the employees need to be brought on board and be put on the same page as this new mission.

Kelly Kennedy: Yeah, we're we're asking a lot of companies right now, Joel, to reevaluate their value propositions or maybe to have the discussion for the first time, but I think we're also kind of saying, hey, Go do this thing that you haven't known how to do.

Can you maybe give us a 101?

Joel Magalnick: Yeah, this is, this is an interesting one. And I'm going to, I want to do this in sort of a general way, a little bit abstract. Yeah, so this is one of the things that we talk about. And so it's, it's called the design thinking process. And so basically it's you can look at it in five or six steps.

And the first step being empathize. And so when we're thinking about our value proposition, we need to put ourselves into the shoes of our customers and into the shoes of our team. And so like if I'm talking about management, putting myself into the issues of the rest of my team and really understanding what are the problems that they have and what are the problems that they're trying to solve from there.

Once we have a little bit of an understanding, then we define what those, what those problems are and how we need to focus on fixing them. So it really is. It's not about coming up with new stuff yet. It's really about understanding what is our situation? What is our moment in time? What is, you know, it's, it's our, it's our benchmarks.

It's our baseline from there, you know, design thinking methodology calls it ideate. A lot of people call it brainstorming. They are really interchangeable. And this is where we actually really start. Ideating on what are solutions to solve these problems or to really get a sense of what it is, who we are in the market, where we sit and how we meet the needs of who our customers are.

We and I want to, I do want to say in that defined phase as well, just taking one step back is that we do need to define who our target customer is. If it is different from who we expect that to be. So up to this point we have empathized, we've done that definition, we've done our brainstorming.

We've got a lot of ideas. Now we need to pull all of those things together, start prototyping it. And this can be prototyping on paper. It can be prototyping on, you know, writing out what that definite, the definition of that value proposition is. It can be. You know, I did the start of redesigning that product and then we test it out.

We talk with our customers. We talk with our employees. We talk with potential customers. We talk with other types of stakeholders. And we figure out, are these things that we designed that we're designing? Is this value proposition, this, this statement that we've come up with, does it resonate, does it hit the nail on the head?

And if it does, great, awesome, two thumbs up. If it doesn't, and that's going to be the case, more likely than not, then we iterate and we go back and we do more design, we do more testing, prototyping, testing, until we feel like we're at a place where we got it right.

Kelly Kennedy: It really is a work backwards from the problem process.

Joel Magalnick: Yes.

Kelly Kennedy: You are essentially creating your value proposition to fit a challenge that that your customer has, not the other way around, not building a product looking for a challenge. You're working backwards from a challenge to build a product that will then meet that challenges need.

Joel Magalnick: And, you know, I'll talk to people and I tell them what I do.

And they're like, I know so many companies that need that because they've got this thing that they've created. They don't know who it's for.

Kelly Kennedy: Yeah, yeah. And actually talking to a lot of mentors, which I've, I've done on this, you know, this channel at this point, right? Like talked with tons and tons of people across the whole Alberta ecosystem, and then some.

And they said that that's one of the biggest problems that most founders have, is that they have this brilliant idea and they make this product, but then that product doesn't have a need or the need that it fills, there's already something there that does it better or it's, it's not cost effective, so it doesn't work.

That's It's an interesting thing. I wonder how often that is the case that someone comes out and they're like, Yep, I have this product and I'm just going to sell it to the world without seeing if the world even needs it.

Joel Magalnick: I don't want to throw a number out there, but I'm going to say it's high.

Kelly Kennedy: Yeah. When you're going into companies and seeing this quite regularly, I'm sure, what is your advice to them?

You know, like, At that point forward is everything about you guys need to figure out what problem or what problem needs to be solved ahead of this out of everything that you guys do from that point forward. Is that your recommendation?

Joel Magalnick: I think it depends where we are in the, in the, in the phase and in the life cycle of the company and the products that they're offering.

And so if they're already, you know, two feet in and all the way in the deep end, they've got so much invested. That to say, okay, drop everything and start over. It just, it isn't realistic, even if sometimes it might be necessary. And so it ends up being much more about course correction and and yeah, I would leave it there.

It's, it's really about course correction.

Kelly Kennedy: Yeah. Yeah, what are your recommendations? Like, obviously, part of your process is very much client focused process, trying to truly understand the client. In your experience, do you find that there is a pretty big mismatch between what the client needed and what the company you're working with was trying to offer them?

Joel Magalnick: Sometimes yes, and sometimes no. Sometimes, The company that I'm working with really has a pretty good idea of what their value proposition is, and they just haven't been able to put it into words, or they haven't been able to cross that bridge of knowing what it is to communicating that to their employees and team, who then in turn communicate that to their customers.

Kelly Kennedy: It's like a bad game of telephone.

Joel Magalnick: You know, sometimes that's what it is. You know, if the company is big enough, there are enough layers there that somebody who's got an idea, it's a great idea. And, you know, people at that level are like, okay, we're all in, we're doing this and then nothing or they, they come up with messaging and they come up with plans that don't actually.

Take into account what their customers need or what their, you know, the people that they work with need to actually share that messaging and comments. And a lot of that too. And, and, you know, this mutual client that we're talking about earlier a lot of times the relationships that the people at the ground level, the ones who are with the customers those relationships go very deep oftentimes.

And, you know, they know each other by name. Sometimes they're helping each other out outside of the workplace even. And and so it's the relationship part of this. Relate of the, the customer and I'm going to use the word relationship twice, but it's that relationship aspect of customer company that you know, happens at that person to person level and any amount of.

Advertising or billboards or that sort of thing doesn't even come close. And so to be able to scale out those relationships and show that, Hey, you know, these people, you know, basically it's almost like getting testimonials of like, you know, this person at this company. When I was in my, my moment of greatest need, they pulled through for me.

Yeah. And to be able to tell a story like that shows like, and they pulled through for me in this situation of this product that they offer. Just goes to show like, yes, this is a company that thinks about who their customers are and what their needs are.

Kelly Kennedy: Yeah. I know like there's a lot of companies out there that if you say to value proposition or to improve their value proposition, what they're kind of thinking about is, you know, How can we smoke and mirrors this to make this seem better versus truly creating a better value?

What is your opinion on that? Is value proposition just about making something sound nice? Or is it truly about some, about making something a better value or more valuable to the customer? I think, I think people can look at that two different ways.

Joel Magalnick: Yeah. And I have a, I have an opinion on it and I'm going to share that opinion, which is that it really is more than ticking off a box.

You know, sometimes I'll talk to a client and they'll be like, you know, we just, you know, we need this for compliance. We need this for something like that. And, you know, it's, it's kind of begrudging, but I'll, you know, I'll do that for you, but I don't always feel good about it because ultimately you're going to say that you do these things and you're not going to actually do them.

Yeah. And so for me, like If you say that you're something you're say that these are, this is what you do for your customers. This is how you treat the people within your organization. If you think you're going to do it, then do it.

Kelly Kennedy: It's about real value. It's, it's, so I hope that we're like, we're knocking that perception thing off the ledge here.

If you are truly thinking about improving your value proposition, truly improve your value proposition. Do not just smoke and mirrors or change the wording to make it sound better. Truly make your business or product or service better.

Joel Magalnick: And, and, you know, part of that, too. And I'm not saying that, you know, every company needs to be focused on you know, diversity, inclusion and equity and that sort of thing.

Although, you know, it would be nice. But just, you know, respect who your customers are, make your products and your services fit those needs and make sure that the people who are most closely interfacing with you. With both of those know exactly what they're doing and get treated with the respect that they need and are given the tools that they need to actually implement.

Kelly Kennedy: In, in business development, we put such a heavy emphasis on relationship. Relationship is something that's absolutely so critical. Can you explain the relationship of relationship in value proposition?

Joel Magalnick: The customer needs to understand what the product or service that you're offering does. And who you are as a company.

Sometimes those are one in the same, sometimes there are two separate things. And either one is okay, but it's really that in the, at least in the companies that I talked to her or want to be working with, it's having that understanding of, you know, we're not, we're not. Selling a highly commoditized product all the time, that the products that we're selling do in some level need to be customized or individualized for our customers.

And. If they're going to be making a purchase, they need to see that we're going to be helping them working with them, not just giving them something that they can use. And here's the instruction manual and figure it out. Part of the value proposition is making it our products explainable enough or giving them the tools that they need to really be able to use.

and gain benefit and value from it.

Kelly Kennedy: Yes. Okay. Okay. I love what you just stopped on. So defining what it is your product or service actually does, how many companies are doing this so vague that you can't even tell what it is they do?

Joel Magalnick: Once in a while, I am it's yeah, it's kind of interesting. Like you'll look at marketing materials or add materials and you're like, Oh yeah, they, this is what they do. And then you actually dig deeper and you're like, Oh, that's not what they do at all.

Kelly Kennedy: I'm not even gonna lie. I was guilty for this. I was guilty for this when I started capital.

I knew business development, but I didn't know exactly what my service was going to be. And so in the beginning, I kind of just said, Hey, we can do all this stuff to support you. And what's super funny is as we went forward, I learned more and more and more about what it is we actually do. And I think this happens in so many companies where They just start a company knowing they can do something great.

They're not really sure what it is going to be. And over time, they really define what that value proposition is or what that service really is. But yes, you know, one of the things that we've really come to understand at capital is you really do need to explain to people what each service does. in detail so that they're aware of what it is they're buying and if it'll fit their need or not.

Joel Magalnick: Yeah, and you know, before I started North then West, I just started that about a year and a half ago. I had a previous iteration of my consulting practice that focused a lot more on things like user experience and some content marketing and that sort of thing. And it was really very challenging for me.

To explain what it is that I do until I actually took the time to sit down and establish what my value proposition is and really figure out like this is the category that I need to own. So doing category design for myself and, you know you know, it's great that there are lots of people who understand UX.

There's lots of people who understand content and writing and marketing and that sort of thing. But this is the, this is the lane that I want to be in. And, you know, in that year and a half I have evolved as well. And. You know, my, you know, my value proposition now is focusing on the customer experience of for any company.

And that, that needs to be part of your value proposition. And so that's the perspective that I take for value proposition which has evolved over time.

Kelly Kennedy: Yeah. Yeah. And you know what? I'll be honest. My, my evolution of understanding of business, business development, sales, marketing, the whole, the whole gamut changes every single year.

You know, some years smaller than others, but every year there's a little more to it, a little better understanding. And I think I'm talking to my younger entrepreneurs out there right now. If right now you're like, shit, I don't have it all figured out. I want you to know that that's completely okay. I was there.

Joel was there. It's a growing learning experience, and it doesn't matter whether you're an expert or not. Sometimes it can take a little bit of time to truly identify our exact service and be able to define it and explain it in an easy to understand way that shows value. I don't want them to feel alienated right now, Joel.

Me and you have both been there. We're both experts in our respective fields. And we both run into problems in those areas of expertise, which is funny, but I think it happens to everybody.

Joel Magalnick: I don't have all the answers yet. I am still learning as I go. And that's, you know, if I have one piece of advice for anybody at any age, Is always keep on learning, always continue to try to understand what the work is that you're trying to do and how you best give that to the people that you're working with, whether that be coworkers, employees customers, and.

Ultimately, you know, do what you need to do to succeed, but do so with intentionality and just, you know, always understand, try to understand everything that you're doing.

Kelly Kennedy: This last year has been a total shakeup in like just business in general, especially with the advent of AI. How has AI affected value proposition?

Joel Magalnick: Yeah, that's a good question. And, you know, I will say that AI has, has been with us for a long time, but It's just in, you know, like the past year and a half that it's really hit the mainstream. And most of that is about generative AI. So you plug a prompt into an AI system. And it gives you information.

It gives you images. It gives you videos. Some of those are really cool. Some of those are a little bit creepy or a little bit freaky. But there are other ways that AI manifests itself as well. And so it can, it can be used in predictive technologies. And so healthcare, I think, is a great, Example of this, where you can use medical technologies machine learning data has been introduced to learning models, like vast, vast amounts of data.

And so these predictive models, for example, could look at an X ray and using AI figure out compared to all these other millions of X rays that it's looked at at the same part of other people's bodies. See, Oh, you know, that could be a tumor that could be something else that needs to be looked at and.

You know, even at the smallest, tiniest, little, you know, millimeter sub, you know, micrometer even size, recognize like, oh, here's something that needs to be checked out and and explored. And, you know, that's not something that medicine has had before a decade ago.

Kelly Kennedy: Yeah, it is. It's going to change everything.

I always like to think like, you know, at the beginning of cell phones, like, let's just say back in the early 90s, We couldn't have known what they would become 20 or 30 years later. And I think that's where we're at with AI. Like, I'm super impressed by what I've seen in the past year and a half. I wasn't following any AI until a year and a half ago.

Like you said, it's like I was, I was the mainstream candidate.

Joel Magalnick: Right. And so when, when we're, you know, to answer your question, where we're thinking about how does that fit into value proposition, any company two ways. First, any company needs to be thinking about how AI is going to supplant the things that they are doing today, because oftentimes AI might be doing things cheaper and better.

And two is how can AI be used to show that your value proposition as a company, as you know, as a product or service. How can AI make those things that you offer better because you've got this, these vast amounts of data behind you, or you are using tools in a different way than anybody ever has before.

And that is what your differentiator is that that's where you create that category for yourself. Based on that value proposition and pull yourself ahead of anybody else who might be in that space.

Kelly Kennedy: Yeah, I was gonna say, I think on some levels with, with AI being so new, it can really give a small company what do you, what do you call it?

Like a, a power upgrade or.

Joel Magalnick: Yeah, your power, like, I just think of like Mario.

Kelly Kennedy: You can get a level up.

Joel Magalnick: It's. And it really can, but also like. You know, don't be doing AI just for the sake of doing AI again, when I'm talking about value proposition, I'm talking about intention and, you know, be intentional with it.

You know, thousands and thousands of AI companies, mostly based on the generative AI have popped up and since, you know, the start of 2023, so a year and a half, roughly. 80 to 90 percent of those companies will not be around five years from now.

Kelly Kennedy: Yes. Yes. I did see that statistic as well. That's huge. So it's like, how do you know even that you've got the right one or that you've picked one that's going to, that's going to live like 15 to 20 percent are pretty low odds.

Joel Magalnick: Yeah. Yeah. And some of them, some of them are going to fizzle out. Some of them might go out with a bang. Some of them, a good number of them were started for with the idea that, Hey, we've got this idea and we hope to get acquired. Right. Yeah. And, you know, that will happen with a number of them as well. And that's.

You know, great for hopefully everybody. But also like we're seeing a huge explosion in creativity and that's amazing.

Kelly Kennedy: We're seeing a huge explosion in creativity. I agree. We're also seeing a huge explosion of words that people would never say.

Joel Magalnick: Yes, we are. You know, there's a double edged sword there. I don't, I don't.

purport to put myself forward as a huge proponent of AI, but I do see like, you know, kind of talking about like with this medical examples for example or, you know, looking at sensors, you know, internet of things you know, physical hardware that integrate AI that can, you know, tell us information about the state of our world much more easily and quickly than ever before.

And, you know, in an era of climate change, that is going to be hugely important. So. You know, film is a tool, and so we need to use it wisely, don't need to use it to, you know, fake things out or say bad things about people, and you know, let's, let's be nice about it.

Kelly Kennedy: Yeah, and I would say like in relation to if you are using AI to help you with your pitch or value propositions, remember, don't copy and paste these pitches, okay?

Huh. Read them. Read them. Make sure that they sound like you. What we always do is we actually handwrite our pitches first. Then we run them through generative AI and we just say, Could you or would you improve this? And we look at the improvements it would make, and we may or may not. Add them to our pitch.

We only add them if we deem that it adds value to the pitch itself. You still need to look at it as a person and come across as a person. And I think that that's what's really important about generative AI.

Joel Magalnick: Yeah, you know, the other thing that you can do there is ask the AI to compare it to other proposals or propositions that it's seen and, you know, show where yours is different.

Kelly Kennedy: That's a really great idea. I've literally never thought of that. Good job. Thanks. That's why we bring you on here, Joel. You're really smart.

Joel Magalnick: You're prompt king, I guess.

Kelly Kennedy: Man, that's going to be a job one day. Prompt king.

Joel Magalnick: Oh, it is. Maybe a different title.

Kelly Kennedy: Yeah,

Joel Magalnick: there are people who are doing that and they're apparently doing very well.

Kelly Kennedy: I bet they are. It is. Yeah, you only get what you ask for. So it's pretty important you're asking the right questions. Joel. One of the questions that I had regarding value proposition, are there companies that it doesn't matter for?

Joel Magalnick: Yeah. And this is, you know, I think you and I have talked about this in the past to some extent.

And I think, you know, personally, I would say that everybody, every company needs to have some level of value proposition, but Ultimately the ones that where it's most important are the ones that are not those usually commoditized companies, you know, in, you know, marketing education that I've had business education that I've had, you know, the piece of advice that I've always seen is, or, you know, been told is don't compete on price.

If you are trying to undercut everybody with the lowest price, you're of course, it's not gonna, it's going to eat into your profits, even if you're at a huge high volume. But at the same time, there's always the possibility that some other company is going to come in and undercut you. And the same thing that you're doing to other companies is going to happen to you.

And you've got to figure out what do you do then? And especially if your costs, End up being higher than what your, than your revenue. So if you're that highly commoditized. It probably makes sense to have some sort of value proposition to do that, that little bit of differentiation. But ultimately if you are less commoditized, if you are trying to provide something that's unique, if you are trying to differentiate yourself, then having that value proposition to be able to say this is who we are and what we do.

And we've got this product that's different, but we've also got, This fabulous team, we've got this way to make it easier for you to implement whatever it is, or, you know, complete that purchase. And that's going to give any company a leg up over anybody else.

Kelly Kennedy: Yeah. I think even companies that are competing on price.

They are still obligated on some level to create a value proposition. And maybe that value proposition is we're the cheapest ones out there, but it's still a value proposition, right? Either way you look at.

Joel Magalnick: It is, yeah. And you know, hopefully the products that they have are of value.

Kelly Kennedy: That's right.

Joel Magalnick: You know, and I'm speaking about quality.

But, you know, if, if you're selling something that's the cheapest and you, you know, like I'm just kind of thinking like retail or, you know, steps in a supply chain that you've got this, you know, cheap product and it gets sold to your customers and, you know, three out of four of them break within the first week.

Then nobody's going to buy from you again.

Kelly Kennedy: Yeah, it's so funny. We recently watched the Blackberry movie. Have you seen that yet?

Joel Magalnick: You know, I haven't. I really, really liked it. I heard it was great.

Kelly Kennedy: It's so good. But in the end, it was quality that killed the company. They, they'd always created things. I believe either in Canada or in North America, all of their products manufactured in North America.

They refused to outsource them to China. And I think it was like the one time they outsourced it to China. They all, like a whole bunch of them came back with problems. And it eventually sunk the company, which is absolutely bonkers. It's crazy, but you're right. Quality is, is very critical and it typically doesn't come with the cheapest product.

And so value proposition is important. You know, if for that alone.

Joel Magalnick: Yup, I read.

Kelly Kennedy: One of the things that I wanted to talk to you about, Joel was what is the cost of not getting your value proposition right? Right? .Like, think about it when we think of value proposition, at least in most service based or product based companies. We're typically thinking about it in the proposal stages, right?

My gosh, what do you think the cost of lost proposals is because the value proposition was wrong?

Joel Magalnick: Yeah, and and this is where you know when I mentioned that I evolved my own value proposition to be really thinking about the customer experience. This is really where i'm thinking in terms of how any company could be leaving money on the table by not thinking about their customer experience by not thinking about it how everything that they do is focused on their customers.

And if, you know, kind of like we talked about a few minutes ago with, you know, having a solution without a problem really understanding what that problem is to be solved is going to be really helpful for making a product that is going to sell and that your customers actually want, if you don't know the answer to that question.

You've got a whole lot of supply and no demand, and you, you want the opposite or you really want a balance between the two. And so establishing that value proposition really brings you to that point of equilibrium.

Kelly Kennedy: Walk us through, you've seen a lot of winning proposals and a lot of losing proposals, right?

And I think that's one of the things that we're really thinking about. We're talking to a lot of entrepreneurs today. Maybe solopreneurs, maybe they're selling services or products and they're writing their own proposals. I've recently done a series on proposals when we revamped our proposals at Capital and we revamped our proposals at Capital because we also recognized that we needed to improve the way that we demonstrated our value proposition.

We knew what it was internally. We were doing a really shitty job of explaining it to customers. And one of the things that we came to After lots of hours of discussion and ideals was to really demonstrate to a customer how we either save them money or make them money. And we figure out what that dollar amount is.

And we actually demonstrate it and say, this is the amount of money we intend to make you during this contract. And this is the ratio of that cost to our cost. And that's why it makes sense. Like the value proposition becomes very, very easy to understand when you can see how much money a company stands to make versus how much that service costs.

Right. But. In your experience, looking at other proposals, what are the ways that you would structure a proposal for success?

Joel Magalnick: Yeah. And this is an interesting question. And I actually, I appreciate you talking about how you've kind of flipped the way that you do it in order to show like, you know, this is what we have to offer because there was a book that I read several years ago and I don't remember the name of the author now, but it was called million dollar consulting.

And What the author, he was a million dollar consultant and he made short two page proposals. So short, sweet, simple. And it's a, actually a recipe that I've more or less followed as well. And depending upon what you're selling, it may have to be different. You know, sometimes you might have to have all the legal language and all that stuff in there.

The things that were really important to me in a proposal are. being very clear about what you offer and the timeline upon which you're going to be providing what you offer. So those are kind of nuts and bolts parts of things. But then really kind of doing some storytelling, kind of like what you're saying, you're quantifying, this is how much you're not going to make if you don't use us.

So what is the real benefit? So you have a product or service. It's a thing. It's a tool. Basically, right? Your tool that you are selling, whether it's business development services in your case, Kelly, or it's a physical product, you are selling this because there is a problem to be solved. And so that problem to be solved is going to result in benefit to this potential client.

So I'm just thinking of, you know, one of the things that I offered to do recently and I've got a proposal out for is for a workshop on value proposition. And so the benefit is going to be that I've got an audience or a room full of people who we will actively, Do activities so they can help establish what their value proposition is for their specific companies.

Wow. And so, yeah, so, you know, explaining that benefit and you know, we can talk about this in terms of something called a user statement. We don't have the screen share to be able to show this, but I am going to kind of talk through it. And so the the way that I think about it is, and this is what I teach at my user experience classes as well as as a user type.

So it could be we go real simple here as an ATM user. I want to, and that will be the goal that we're trying to achieve. So as an ATM user, I want to withdraw money so that I can get a benefit. The benefit being so that I have cash in my pocket. So again, as an ATM user, I want to withdraw money. So I have my cash in my pocket.

And that is a way that you can show for your customers, I am going to provide X so they can get this particular benefit. Be able to tell that story quickly and succinctly I think is probably going to be one of the most simple things that you can do and then put that out in detail as well. So I usually have an overview where I would do something like that user statement and then really list out the services that I'm going to offer to get them to that point.

And then talk about what my responsibilities are as the consultant, what the client's responsibilities are as a client that they need to, you know, they've got stake in this game. They can't just be writing me checks. They got, they got to you know, they got to act as well. They got to participate as well.

And then what do we do jointly? What are our responsibilities together? Because I see this when I'm doing my work as creating a partnership. Yeah. You know, that's not going to be for everybody, but you know, based upon the work that they're doing, but for me, that's important. And then you know, when I'm costing it out you know, I think the method that you've been talking about, Kelly, and we've talked about this in our own conversations previously of don't charge by the hour charged by the, the value that you're providing.

Yes. Yeah. And so it's, it's going to take time to figure out how you qualify that and quantify that. But probably in a case like this, the quality is going to get you to the quantity.

Kelly Kennedy: Yeah, that's right. Like, you know, I mean, at the end of the day, I think most products or services are to help a client achieve a goal or dream that they have, right?

I think in that, and, and that's what they really want. They don't want your product or service. They want what that product or service will do for them, right? And I think it's important that we're thinking about that along the way. You know, one of the, one of the things that I wanted to ask you, Joel, is that In, you know, in my mind, when I've looked at value proposition, and especially in my new understanding of value proposition, I've really tied it to dollar value.

But are there other values that maybe we're missing here?

Joel Magalnick: Yeah. Oh, for sure. And there, there's, there's a few, I would say. And ultimately, like it, a lot of it ends up tying back to that benefit of that user statement that I was just talking about a second ago. Because There's value in customer satisfaction.

There is value in being treated like a human or being treated like you know, with some level of respect. There is the value of getting your tasks completed. You know, if I'm there for a job to get done, if I'm trying to make my life easier, if you are making my life easier, that is that's a huge benefit.

That's a huge value right there. And you can tie any of those things together as all of those as qualities. That you could draw a straight line to the money.

Kelly Kennedy: In your experience, how, how have you identified what is the most important value to, you know, your client's potential prospects?

Joel Magalnick: I don't think I have one answer for that, actually.

Every client has a different need. And again, you know, if we're talking about commodity versus You know, individual touch points, the customers that I'm working with are more about the individual touch points than the commodity.

Kelly Kennedy: Interesting. Interesting. Yeah, it's so, it's such a broad topic. Like, honestly, I hope what people are starting to take away from this is that value proposition, there's a lot to it.

And having somebody like Joel come in and work with your organization is worth every single penny. Mark my words, it is that critical. And you know, I want you to think about it the next time you lose a proposal. What that cost really was to your company, and would it have not made sense to have brought in a consultant to potentially help you with that?

Joel Magalnick: Yeah, agreed.

Kelly Kennedy: Joel, this has been absolutely awesome. I know we have a ton of people listening who are all in on value proposition. Can we talk just a little bit again about What challenges they might be having that reaching out to North then West should be their next step.

Joel Magalnick: So if you're finding that you've got a solution without a problem, then you definitely need to be thinking about what your value proposition is.

If you feel like You don't really know what your customers need or want. That's huge because you do need to be thinking about what is the experience that you're providing your customer and what their needs are. If you feel like you have been in the market for a long time and you've not had a lot of change and you're starting to see that.

The market is different or it's getting ahead of you, then this is a really good time to think about your value proposition and what it means and how, what you can do to regain your position in the market. So that's where I would say are probably the three most important areas.

Kelly Kennedy: Amazing. Amazing. And what are the best ways for them to get ahold of you, Joel?

Joel Magalnick: Well, I've got a website. We all need our websites right norththenwest.com. There's two ths in a row there. So it's north then THEN west.com, or you can reach me by email, joel@norththenwest.com. Or you can also find North then West on LinkedIn.

Kelly Kennedy: Perfect. And I wanted, before we wrapped up today, because something has changed since the last time that we were on together.

You have an awesome video series on LinkedIn. Can we talk about that for a second?

Joel Magalnick: Oh, sure. You're just popping a surprise on me. I gotta, I have to, I have to catch myself up with that. I know you keep a lot of episodes in the can and I'm kind of like one or two at a time when I'm doing this. So I got to keep myself up and running on it.

But yeah, so I do every week I do a, you know, roughly one minute. Little video that talks about different ways to think about value proposition, category design and customer experience. Those are really the three areas that I'm talking about and just either giving advice or giving you know, making people think about what, how are they approaching their value proposition, their customer experience.

And you know, going in a direction where they are going to grow.

Kelly Kennedy: Yes. And they're awesome. And I've watched plenty of them. Thank you. And it's called Own Your Business. And where can they find it?

Joel Magalnick: I have it on LinkedIn. And so if you follow North then West or you follow me, Joel Magalnick on LinkedIn, you will find them there.

I do have a YouTube channel called I think I have that as hashtag on your business. So you can find it there as well.

Kelly Kennedy: We're talking to a worldwide audience, Joel. What are your areas of service? Will you only service Canada?

Joel Magalnick: Canada or U S I can service both of those areas easily. And otherwise geographically, like within, you know, these two countries of North America.

It doesn't really matter. We can do a lot of our work remotely. And if you need me to come out and help train your employees, do workshops, I am available to do that as well.

Kelly Kennedy: Amazing. Amazing. Joel, it's been great having you back, my friend. Thank you so much for doing that. Good to see you, Kelly. It's good to see you too.

Until the next time, this has been episode 136 of the Business Development Podcast. We have been graced. By the founder of North Then West, Joel Magalnick. He is he is my value proposition expert. I appreciate him immensely. Until next time, you've been listening to the Business Development Podcast, and we will catch you on the flip side.

Outro: This has been the business development podcast with Kelly Kennedy. Kelly has 15 years in sales and business development experience within the Alberta oil and gas industry and founded his own business development firm in 2020. His passion and his specialization. Is in customer relationship generation and business development.

The show is brought to you by Capital Business Development, your Business Development Specialists. For more, we invite you to the website @ www.capitalbd.ca. See you next time on the Business Development Podcast.