How to create a compelling value proposition to boost your business
Why should anyone buy from you? Are your products and services so unique that they can’t get it from anyone else?
Chances are this is not the case – unless you tell them how.
You can do this by creating a value proposition (VP).
Prospects typically research the market when they are ready to buy before deciding on a provider. Often they have difficulty deciding who to use because many providers seem to offer the same products and services. What a value proposition does, is set you apart from your competitors and influences prospective buyers that you are worthy of their trust, time and money.
Before you create a value proposition, you need to know what one is, what one isn’t.
What is a value proposition?
A value proposition is a clear statement of what tangible results a prospect is likely to get from using your products or services. It’s the promise of what value they will receive if they buy from you.
A value proposition needs to explain to a prospective customer that your products and services will resolve their problems or help them realize an opportunity. Your value proposition has to be relevant to their needs and if they buy your products or services, their situation will improve as a result.
When a prospective buyer looks to engage with you or buy your products and services, they want to know specifically what value you will bring to them. In other words, how can you qualify or quantify the benefits they will receive if they buy from you and not your competitors. They want to receive the same benefits your value proposition promises ?
What is it about your products or services that matches a customer’s ideal better than your competitors? What is it that is unique about your products or services and how are you different from your competitors?
If a prospect asked you “Why should I buy from you?” Your value proposition must be compelling.
Sample value propositions
|Avis||“We’re number two. We try harder.”|
|FedEx||“When it absolutely, positively has to be there overnight.”|
|M&Ms||“The milk chocolate melts in your mouth, not in your hand.”|
|Domino’s||“You get fresh, hot pizza delivered to your door in 30 minutes or less, or it’s free.”|
|NyQuil||“The night-time, coughing, achy, sniffling, stuffy head, fever, so you can rest medicine”|
|Target||“Expect More. Pay Less.”|
|Geico||“15 Minutes Could Save You 15 Percent or More on Car Insurance.”|
|Enterprise||“Pick Enterprise. We’ll Pick You Up.”|
What a value proposition isn’t
A value proposition is not a slogan catch phrase or positioning statement. Simplistically – it’s a statement about what you offer, and what benefits the customer will gain from using your products and services.
A Value Proposition often gets confused with a Unique Selling Point (USP) or an Elevator Pitch.
A Unique Selling Point (USP) sometimes known as a Unique Selling Proposition is a statement about what separates you from other providers. It’s what makes your business stand out. A USP can focus on price differentiation, product characteristics, location and distribution to name a few. In marketing terms, it positions you in the market place and separates you from your competitors. Take Walmart versus Neiman Marcus. One offers everyday cheap pricing, the other offers quality (you can’t do both). Starbucks is known for premium coffee. Price, quality or speed, you can’t have all three.
An Elevator Pitch is a short 30 second commercial that defines who you work with (your target market) and how you help them achieve results. It’s a short verbal description of your business which may also include the value proposition. It’s called an elevator pitch because you should be able to deliver it quickly between floors of an elevator. An elevator pitch is used when someone asks you what you do, often a question that comes up when attending networking events. Essentially it’s a 30 second commercial.
How to create a value proposition
Step 1 – Identify your customers
- “Who are your customers?”
- “What do they do?”
Step 2 – Define their problems and opportunities
- “What are the typical problems they need to resolve?”
- “What opportunities would they typically want to pursue?”
- “What other improvements would they typically want to make?”
- “What is that they value most?”
If you don’t know the answer to some of these questions, why not ask your existing customers.
Step 3 – Determine the impact
It’s not enough to know what problems and opportunities your typical customers face, you also need to determine what the impact or implications would be for them if problems are allowed to fester or opportunities are missed. What else would be impacted if they did nothing to resolve their problems or explore opportunities? In other words, what is the flow on effect?
Step 4 – What is their target goal?
If they use your products and services, what is the payoff for them? What tangible results are they looking for? What value will they receive from using you as a provider? Also consider opportunity cost.
Step 5 – Determine what your products and services will do for your customers
In order to determine what your products and services will do for your customers, you have to know your products and services inside out – but not from your point of view, from your customer’s point of view.
- “How will your products and services resolve their problems?”
- “How will your products and services offer improvements?”
- “How will your products and services help them realize opportunities?”
Are you able to qualify or quantify these typical results with percentages, numbers and time or dollar amounts?
- “How much would a customer save, improve or gain from using your products and services?”
- “How much smarter, safer, faster would your solution be?”
- “How long will it take for customers to get results from using your products and services?”
Step 6 – Determine how you are different from your competitor’s
In order to determine how you sit in the market place against your competitors, you would need to conduct a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). This will give you an indication of the following:
- What product or services do you provide that no one else does or they don’t do as well?
- What is unique about the products and services you do provide?
- What is unique about your story?
- Where do your strengths lie?
- Where are your opportunities?
Step 7 – Draft a value proposition from your customer’s point of view
Using the answers you have gathered from the all the steps above, you are ready to draft your Value Proposition.
- “What I value most from using your products and services is…..”
- “The reason I want to buy your products and services is because it will help me.….”
- “Using your company to provide….. is better than your competitors because..…”
Check what you have written
Once you have written your value proposition. Check it against the following:
- Does your value proposition clearly define what product or service you are offering?
- Does it clearly define who your target market is?
- Does it clearly articulate the value and end benefits of using your products and services?
- Does it clearly articulate what your unique offering is and how you are different from your competitors?
- Can your competitors claim the same thing?
- Is it easy to understand?
- Can it be read and understood within 5-10 seconds?
- Can you deliver on your promises?
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