Even DIY entrepreneurs have heard the term “value proposition,” but it’s a sad truth that many businesses simply don’t have one—and you probably don’t either. Maybe you haven’t had the time to make one. Maybe you think your business is simple enough that it’s not needed. Or maybe you just don’t know what a value proposition is.
Whatever the reason, value propositions should never be overlooked.
What is a value proposition?
A value proposition is a clear and concise statement of how a business will satisfy a customer need. More accurately, it is a commitment of how the business will deliver a specific set of experiences to a customer or group of customers and why that experience will be better than the competition.
Why do I need one?
Value propositions are more than just a thought exercise. They are a key part of your business strategy and affect multiple areas.
An effective value proposition helps marketing communicate their message to potential customers, steers product design decisions or service offerings, and influences company culture. It’s a powerful message that will be felt throughout your company and help you grow the business the right way.
How do I do it?
There are three key steps in determining any value proposition:
· Define on your target buyer
· Discover target need
· Determine why you’re the best solution
You can’t be everything to everyone, so who would you rather work with if you had a choice? Large, multinational companies or small independent businesses? Which industries would you rather focus on? Which of those industries could make the most use of your product or service?
Solving the problem.
Which of your customer’s problems are you trying to solve? When answering this question, make sure you know the difference between listing features and delivering value. Put yourself in your customer’s shoes and think about what excites them
about your product and how your product makes their life better.
What sets you apart from your competitors? To answer this question, you again have to refer to your customers. You might think customers buy you because of your customer service, but customers might actually be choosing you based on price.
Conduct a survey of your best customers and ask them what they like most about your company. If there are multiple answers, focus on one particular strength and own it. Don’t focus on multiple strengths, because that will weaken your value proposition and dilute your efforts.
Once you’ve collected all three parts of your value proposition, it’s time to put it all together. Make sure your value proposition addresses the who, what, and why questions in a clear and concise manner.
Freshbooks, for example, has their value proposition as:
“Small business accounting software designed for you, the non-accountant.”
This value proposition clearly states what their product is, who it is intended for, and why it’s better than others (it’s built specifically for non-accountants).
You don’t have to settle for just one value proposition, either. Maybe you tackle a wide range of markets, or perhaps you have different product brands. You can write unique value propositions for each of them.
If your value propositions are properly formed, you’ll have a powerful tool upon which to base your marketing communications and product and sales strategies. But don’t do it alone. Value propositions require the input of other people in the organization: sales, marketing and customer support. So block off some time, order some pizza, and have a productive brainstorming session!
Article by Patrick Icasas
Patrick Icasas, B2B Blogger, Copywriter, and Content Marketing Consultant