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29 April 2013

Value Proposition in Social Entrepreneurship

Estimated reading time Time 4 to read

Why do we exist? One person asks another. Silence. What do we want to achieve? They ponder. What value are we trying to create? What problems, needs, goals do we want to help you solve, cover, answer or build?

They look at each other and nodding they murmur asynchronously: What is the heart of our social enterprise?

But the answer to this question, like most important questions in life, although intuitive, might not be easy to pin down, shape or articulate into words. So it needs to be pondered deeply, as we are only able to visualize it in this way.

The value proposition is the ultimate goal, the raison d’être or the telos of our business plan. It is about reflecting on who we want to be and why we want to be like this. Their response will require a deep knowledge of the recipients and will be key to addressing the issues of distribution, communication, partnerships, etc. Now, the value proposition, as the heart of the company, is not static but an organ that breathes and evolves: it adapts to changes in society. So we must define it, true, but not set it in stone. This will allow us to revisit and redefine it in the future.

There is a value proposition in every company, although it acquires special characteristics in the social enterprise. As a company, it camps in new terrain reminiscent of what Pine and Gilmore (1999) call economics of transformation. In this new territory, the qualities of a product, a service or even an experience, however good they may be, are not sufficient. Recipients of the social enterprise are not satisfied with the fact that the value proposition offered can improve their world but demand that they meet a higher purpose: they must contribute to improving the world.

To address the important challenge, we may have to change toolbox or perhaps, as noted by Professor Yunus “use these tools in a timely way” (Noeville, 2011:524). In any case, we consider that the following 10 instruments, in the form of principles, are key:

  1. Creating a community and social network: the social enterprise has to promote a sense of community, whether physical or virtual. It has to take advantage of and enhance the network effect, at both a cognitive and emotional level.
  2. Customer focused or customer centric: this involves making a special effort in getting to know customers, recipients, users, or “guests” in order to give them a differential treatment.
  3. Customization, tuning and individualization: in a globalized world that is increasingly more homogeneous the individualization proposal is particularly relevant. From a more concrete level, customization means adapting to the specificities of customers or their tastes and needs, from a more abstract level, it opens the possibility that the recipient expresses its uniqueness, participating in the design or production process (co-production, co-creation and prosumerism).
  4. Emotional connection: the recipient of the social enterprise is looking for something more than a mere economic transaction with the supplier. This customer is inspired by human contact and the desire to incorporate those responsible for the social project in its circle of reference or influence.
  5. Transparency, consistency and integrity: in a world where anonymity is disappearing, the principle of transparency acquires an important social dimension, especially for recipients of the social enterprise. This group likes to be informed, is not easily influenced and places special value on consistency and personal integrity. Tolerant of human mistakes and forgetfulness, these individuals welcome sincere apologies but are relentless with deception and manipulation.
  6. Sensitivity to the social context and mood: as a result of mobile technology and location aware computing, in the near future it will be possible to know the customer’s immediate geographical and time context. This will require that companies are able to adapt, be flexible and respond to the environment to a great extent. This fact will not only make it advisable to include accurate information on the value proposition circle of life but also be sensitive to the emotional context or general climate in which the social enterprise and the recipient is immersed.
  7. Flexibility and generosity: flexibility in applying the rules governing the relationship between the company and customer is valued (this is what Trendwatching has called (f)ridig no more) and the generosity of companies (not necessarily understood as free and not necessarily directed to the recipient) as an expression of empathy and sensitivity to the context.
  8. Balance between futurism and nostalgia: a good value proposition has to adapt to a dual time dimension. It must show some optimism towards the future (room for improvement and learning) but without forgetting the past, an opportunity to connect with affection and identity.
  9. Distribution of information: this is to help recipients make informed decisions, giving them the choice between different possible alternatives and making them aware of their impact.
  10. Open value proposition: this involves collaboration between several companies, so that the value proposition is the result of the combination of dialogue and participation between multiple players.

Yet, the social enterprise (when understood in this light) not only makes the entrepreneur become a “social innovator” but offers the recipient the opportunity to participate in social transformation. In other words, it provides them with the opportunity to overcome the consumer’s reductionist acceptance to recover the citizen’s liberating expression as a key player in the already promising economics of happiness.



Guía del emprendedor social de la Universidad Pontificia de Comillas

Noiville, F. (2011). Soy economista y os pido disculpas. Barcelona: Deusto.

Pine, B. J. y Gilmore, J. H. (1999). The Experience Economy. Boston: Harvard Business School Press.


Estela Díaz

Member of the E-SOST research group, Universidad Pontificia de Comillas, Madrid (Spain)

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