There are sales people who can sell a book to a blind person. That’s an accomplishment, but wouldn’t be easier AND more useful to sell this visually impaired person a book in braille? Marketing can make or break a great product or service, the journey becomes a lot more logical if the offer matches the demand and vice versa. In short; you need a killer value proposition to succeed in business.
Nearly three quarters of new products on the market fail. Make sure you’re reaching the right audience with the right offer.
What is a value proposition?
If an interested party decides to purchase a product or subscribe to a service, the promise the company makes to deliver certain goods or services is the value proposition. This includes the message and intent of the company, a compelling argument to choose this particular provider above all others. There are three cornerstones that can be addressed from a customer’s view:
1. Emotional: The potential customer is looking for peace of mind, you promise to alleviate worries and/or personal challenges.
2. Functional: There’s a practical challenge, the customer needs something to get from point A to point B.
3. Social: In this case the customer is looking for a solution to communicate with friends, impress colleagues etc.
The customer wants to get something done. You promise to help the customer achieve this goal. In order for this to work you first need to create a detailed customer profile.
In the value proposition you’re promising to supply a solution to a problem, or to provide a better solution to the mentioned problem. The distinction between those two propositions matter. It’s easier to communicate how you can improve on an existing product or service, compared to selling an innovative and groundbreaking new product or service.
So let’s take a look at a successful company and how they have created a killer value proposition:
Slack: Where work happens
The value proposition: Slack is a new way to communicate with your team. It’s faster, better organized, and more secure than email.
Is it a messaging app? Is it a productivity app? Or is it both? The reason why the popularity of this service has skyrocketed in the past few years is the way it addresses some challenges team members faced with similar offerings. Slack really delivered on the three cornerstones I mentioned above. The user was growing increasingly frustrated with a lack of integration and overview within project management. Slack offers numerous integrations so third party applications can be ‘plugged into’ the software, and it allows for easy communication with team members wherever they are at any given moment. Their slogan is “Be Less Busy” which seems like a promise that’s too good to resist.
Four factors that define a good value proposition
We now know the definition of a value proposition, let’s take a look at why it’s important to define this for both your customer and for yourself. Here are four factors that define a good value proposition:
- Define the ideal customer. This allows you to create a value proposition that addresses the wants and needs of your target audience. Find qualitative leads, not quantitative.
- Never underestimate your customers. They might already know what they want, it’s up to you to provide an answer to their query that resonates with them.
- The added value of your company might be crystal clear to you as an insider, you will still need to formulate and present it in a way that your prospective customer understands in order to bring the message across.
- Repeat your message, repeat your message, repeat your message. On every webpage, in your social media accounts and promotional materials. This creates a uniform message to your audience which will be remembered.
Build a killer value proposition in five steps
We’ve mentioned ‘good’ and even ‘killer’ a couple of times now. This implies that merely defining a value proposition isn’t enough, you really need to examine all factors that determine good value. Here is a five step plan to define a killer value proposition that will benefit your company in more ways than one.
Step 1: Know your customer
Every good answer starts with a question. In this case there’s no specific question asked yet, so you have to define this for yourself. Crawl into the brain of your perfect customer and ask yourself why this person would choose you instead of competitors. This could expose some flaws in your business model which can be confronting. Perhaps you discover that you have been targeting the wrong target audience all along!
Fun fact: Post-it notes started as a failed project of developing a new type of glue for industrial use. The product didn’t stick permanently as was required. This ‘flaw’ turned out to be the perfect solution for an entirely different group of consumers.
Step 2: Define your strengths
Now you’re going to look at the company itself. What are some valuable assets that might translate into a great value proposition? Here are some examples:
- The company has been in business for 20+ years. This indicates a reliable company instead of a startup with no prior business experience.
- You have successfully acquired some of the best and brightest experts in their respective fields with a CV that will enhance your status as a knowledgeable organisation.
- Some big companies or organisations have used, or are currently using your products and/or services. Name names, show logos, don’t be too modest to showcase them.
- Your tools work on desktop, tablets and smartphones with optimized layouts and features. This implies you offer flexibility instead of demanding users to change their preferred workflow.
- It’s easy to return products or cancel subscriptions. This provides a reduced risk of testing your services and shows you are convinced of the quality on offer.
This does not mean one of these valuable assets will become your value proposition, a list of defining features will identify the general direction of your promise.
Step 3: Rank your appeal and exclusivity
Now you have a list of positive features, it’s time to rank them on both appeal and exclusivity. Appeal stands for the desire in the market for the specific asset, exclusivity stands for the number of competitors offering the same strength. Making a list for one of these considerations is pretty easy, combining them can be a challenge. If there’s a large desire there’s a significantly smaller chance of being exclusive.
In this step the competitive edge is introduced. Before you were looking at the desires of your target audience and your offer. Now you have to consider the competition. This could result in a strategic shift within the company. Perhaps you have to approach a different audience, or you will actually have to change your business operations.
Did you know: Nintendo started as a playing card company in 1889. In the 1970’s they started experimenting with coin-op arcade machines. Even though they changed their business model they target ‘players’ to this day.
Step 4: Verify your claims
Make sure your claims are verifiable. Promises mean nothing if you can’t back them up with actual facts. Instead of claiming “First class support” prove your claim with “24-7 support staff”. “World leading” is a hollow statement, “Number one downloaded productivity app” can be verified objectively. Actual numbers, objective facts and external praise from trusted sources support your promises.
Sure, you can ‘massage’ the numbers by cherry-picking facts. Limit the amount of disclaimers to avoid appearing disingenuous. “Number one selling in -subcategory- in -region- in -timeframe- on -platform- doesn’t hold much weight.
Step 5: Formulate your value proposition
Now you have a list of claims that are desirable, exclusive and verifiable you can combine all elements to distill your ultimate value proposition. In fact, the result should be evident in hindsight. There should be no doubt that you have arrived at a promise that will appeal to your customer, a claim that you can not only fulfill but have already proven to be true.
Unique at something does not mean unique at everything. The best at something does not mean the best at everything. Hone in on your killer value proposition and use this in your marketing strategy. Here are three famous brands that ‘kill it’:
It’s pretty hard to find actual technical specifications for iPhones. Instead of stating a screen resolution they came up with a ‘Retina display’. They made this term up, it’s their trademark. It means a user can’t see the individual pixels on the regular viewing distance. Apple is great at translating technical specifications to value propositions that resonate. The experience is the product.
This company started in a time and a place where yellow cabs were considered a joke to commuters in large cities. People grew tired of high prices. IF you could get a cab, the service level was considered to be poor. Uber is not a taxi service, it’s an app that couples passengers with drivers. That’s why they are “the smartest way to get around”.
Building landing pages is one thing, A/B testing is quite another. Marketing professionals understand the importance of A/B testing even though they might not like the process. It’s a technical challenge for the most part, less creative nor commercial. Unbounce allows marketers to perform A/B testing without IT support. They know their audience and speak to their base with a promise of efficiency. They provide A/B testing without tech headaches.
By the way, I’m sure you can come up with criticism of (some of) the aforementioned companies. All big brands tend to have some skeletons in the closet. And often in plain sight to be frank. But because they’ve defined such a focused value proposition most customers choose not to acknowledge the flaws. You don’t need to be perfect in every way, you need to excel at your promise.
Don’t offer services, offer solutions
There was a period in marketing in which companies would promote themselves based on their strengths and abilities. In the last decade or so marketing copy has changed. Now it’s usually composed from the perspective of the customer. What is your challenge? How will I solve your challenge? Why is my solution better compared to others? Take the time to create a great value proposition, and embed it within the core of your organisation. This will make it much easier to fulfill your promises.
Self-reflection can be a challenge. Would you like someone to hold the mirror? Contact me and I’ll help you define a killer value proposition.