Other than the mission, vision, and core principles, the value proposition is one of the most important statements a business will craft. Value Propositions tell customers why they should buy from the business. It details how the good or service will add value to the customer and how it sets the company apart from the rest. While the idea seems simple, a lot of strategies should go into creating one. Most value propositions are developed to appeal to a specific target segment in the market. This statement is meant to move a customer from prospect to buyer, so it is likely featured prominently on the website, any company literature, and in press kits. This statement expresses why the company exists and how it is a leader in the industry that consumers can trust.
- Importance of Developing a Value Proposition Part 1
- 7 Steps to Create the Best Value Proposition Part 2
- Value Proposition Best Practices Part 3
Importance of Developing a Value Proposition
Consumers face a myriad of options in selecting products and services. Many are vying for their attention through compelling marketing, low-pricing, or exemplary customer service. Businesses have the challenge of setting themselves apart and letting customers know how they can add more value compared to competitors. Developing a value proposition is one of the most important ways to do this. It has to be relevant enough to matter to the customer, but also sufficient in creating an emotional attachment that customers latch onto. Value propositions are almost as significant as the name and logo of the company in that it contributes to the identity of the business. Value propositions are not only crucial for consumers. They also allow companies to take a step back and assess how they are different. It gives them a chance to address the strategic vision of the company and make any necessary changes to differentiate.
How to Develop a Value Proposition
A good value proposition should allow companies to increase their conversion rates which in turn lift revenue. However, the value proposition creation process is not something that can be hastily done. It should loosely follow a series of actions that flesh out what the company can offer to customers.
Understand the Benefits Customers Receive
To start creating a value proposition, leaders need to understand how they create value. Therefore, the benefits the company provides to the consumers should be listed.
Everything from the product’s use, customer service, delivery processes, and any other component should be on the list.
The benefits the company and its products and services provided to consumers should be something each employee should be able to pinpoint pretty easily.
Connect Benefits to the Value
Once leaders have a complete grasp on the benefits offered, they should then link these benefits to the value the company creates for customers.
— How do the benefits help the customer?
— Does the product address a problem or need?
— Does the buying process significantly reduce the purchase time?
— How can customers expect to benefit from what the company offers?
Target Your Audience
Every businesses product is not for every consumer. Leaders need to sharpen the focus and decide who is the target segment for the product or service.
This information can include location, demographics, income, occupation, hobbies, and many other factors.
Knowing who the audience is will help leaders decide which benefits should be mentioned and which might be best to leave out.It also creates a way to better link benefits to value.
Differentiate the Product and Service
This might be one of the most critical components of all. At this point, leaders need to work with their teams to see how they are different from competitors.
This step revolves around the question of why consumers should pick this company over someone else’s. It is a good idea to look at direct competitors and note what they do similarly, and how the company either does it better or more efficiently.
Consumers need to know why they should look over another brand for someone else’s.
Put Everything Into a Clear and Easy to Read Sentence
Through research and analysis; leaders should emerge with an idea of what to include in their value proposition.
The purpose of this statement is not to become a long and arduous read, but it should quickly inform customers of who the company is.
Customers should be able to read over the value proposition in five seconds to get a feel for the benefits and value the business offers.
If the statement cannot be whittled down to a sentence, then leaders should go back to the drawing board to cut out features that may not be needed.
Place It Everywhere
Once the leader and the team agree on a value proposition, then leaders need to work with marketing to get this statement as many places as possible.
It should be included in website copy, near logos, on email newsletter signatures, on company brochures, any and everywhere possible.
Test Its Effectiveness
— Have conversions increased?
— Are more people visiting the website?
— Are more email newsletters being opened?
— How are competitors responding?
Leaders need to assess how the value proposition is adding in increasing revenue and bringing in new customers. Also,leaders should be aware of how the value proposition is changing the perception of the company (for better or worse).
Value Proposition Best Practices
Add a Visual Element
A great way to help consumers understand the company’s value proposition is by adding an optical element. This could be an interactive presentation, infographic, or brief company video. The goal is to get potential customers interested in what the company has to offer.
Be Sure to Prove It
How is the company better? Words can say a lot, but the proof is in action. Leaders should ensure the company can provide how it outpaces competitors and why it is different. This can be through sharing company data and sharing case studies or testimonials to back up claims. Each statement referring to the company should be backed up by data and customer experience.
Make Sure Employees Know and Embody It
This statement is the elevator pitch for the company, and therefore, everyone should know it and represent what it means. If the value proposition involves stellar customer service, then everyone should join in to make sure this happens. If it requires innovation or specific efficiencies, then all staff should represent these ideas in their dealings with customers.
Let It Drive Company Motivation
The value proposition is not just for customers. Leaders can use this statement as a motivating tool for employees to remind them of the themes and principles that matter most to the company. If creating fresh new ideas or creating efficient processes are essential, then the value proposition can indirectly address this.
Leaders should always look for ways to set themselves apart from competitors. Can the company begin to offer free shipping? Can the product or service become customizable or be made not to require a setup fee? These are all simple ways companies can set themselves apart and adhere to the values laid out in the proposition.
Accompany It with a Relevant Image
Much like the visual add-on, the value proposition should be coupled with an image that represents it. A photo of the product or interface can go a long way to drive the message home to connect the product with the value proposition directly.
Add Features and Benefits
Under the value proposition, leaders should make sure to add a list of features and advantages so consumers can connect the statement with these offerings. The value proposition is a great way to lead into talking about the product or service. At that point, consumers are primed to be open to what the company is offering. If leaders did a good job, a value proposition should lead to a conversion.
Think About Dedicating a Page to It
Many websites now commit a webpage to the value proposition and the list of features and benefits that go along with it. Again, this should not be a page with a lot of copy. The goal is to introduce customers to the product and tell them why it is different. A significant number of words can drive them away and make them skip the page altogether.
Many may incorrectly mix the value proposition with a slogan or tagline. However, the goal of this statement is not to entertain, but to show consumers how the company can create value for them.