What is a value proposition?
A value proposition is a short statement that says why your product or service is better than someone else. Customers already have a ton of choices and having a strong value proposition helps your customer know how you are going to solve their problem compared to others.
Why are value propositions important?
When I meet with clients, I ask them what their value proposition is and often times they tell me all the benefits. I mean they list ALL the benefits. As they are telling me they soon become overwhelmed and unsure of what their main takeaway was. In other words, they start second-guessing themselves. This signals that they didn’t have a solid proposition, or they may not know their customer as well as they thought.
Value propositions also help with messaging. Messaging that is used on your website, social media channels, print collateral and even your call to actions. A call to action is when you tell your customer to do something, such as “sign up today” or “click to learn more.”
A value proposition also helps with your online presence. Does your customer have to hunt for your main value on your website? Does your customer know how your product is going to serve them best on your social media feeds?
So, let’s break down what makes an excellent value proposition and how you can start crafting yours today!
Step 1: List why you are the same, different and what you may be challenged on.
Grab your notepad to jot down your ideas or you can use this worksheet to help you stay organized as you go through the process.
- Create a list of what your product/service has that meets their basic needs. This could be what you and your competitors are already doing. For example, a dietitian offers one-on-one nutrition services, assessments, and service packages. She also approaches each client with their lifestyle and food preferences in mind.
- Next, you want to list what elements that make your service more superior than what is out there. Using the same example with our nutritionist, she also offers a mobile app that helps her clients take photos of their food and get feedback or support instantly.
- Finally, you want to list elements about what your business and customers may disagree on, regarding how their performance or functionality compares to the next best alternative. Our nutrition customer may want to see fast results and feel a trending diet may give them this outcome. Our dietitian would disagree that not all diets work or may even make you gain weight when you stop “dieting”
Step 2: Research. Research. Research for effective positioning
In this step, you want to understand the relationship of what you listed above to what a customer values. If you need help staying organized in your notes, use this worksheet. You want to do some research and be able to confidently answer the questions below.
Understanding your customers
– Are you able to describe the customer problem and understand which one(s) hurt the most?
– What is the solution that addresses the problem?
– Understand the risks or side effects of your solution so you can prevent them.
– What (if any) are the customers’ challenges in implementing your solution?
Determine Your Customer’s value
– Which attributes do customers use to define product benefits?
– How are benefits quantified for the customer? (dollars, pounds lost, time saved)
– Do the attributes and benefits have different weights? Meaning do they value one benefit more than another?
Demonstrate Your Value Claims
Saying “we can save you money” is not sufficient. Customers are very savvy in picking up a “sales-y” or “unauthentic” value proposition.
You want to be able to express in words the difference in functionality or performance between your offering and the other option. You can do this in a number ways such as time saved, money saved, pounds lost, etc.
Using our dietitian’s characteristic of a potential belief disagreement, where her customer may want to do a trending diet over her service. She can create an infographic or cost comparison of using her method vs. the diet method. Another idea is to show the difference in the long-term results in both weight and lifestyle using both methods. This helps the customer understand the dietitian’s value.
Step 3: Write your Value Proposition Statement
Choose one or two items from your “What makes you different list” from step 1 and your main offering from the “What makes you the same list.” You want to note that you offer a service that they are aware of and what critical points of difference that will help improve or solve their problem. Here are great examples of how from our favorite companies on how they show their value proposition.
Value Proposition Best Practice
You want to base your value proposition on the few elements that matter most to your target customer, demonstrate the value of this superior performance, and communicate it in a way that conveys a sophisticated understanding of the customers’ needs.