Creating a compelling value proposition
Without a compelling value proposition, it’s much harder to sell your products or services or even get in the door of your ideal customers. But what exactly is a value proposition? And how is it different from other commonly used terms?
A value proposition is often confused with an “elevator pitch” or a “unique selling proposition.” It’s essential to understand the difference between these terms because their purposes and sales impact are very different.
- An elevator pitch is a short, 1 to 2 sentence statement that defines who you work with (target market) and the general area in which you help them. At about 10 seconds long, it’s often used at networking events to stimulate further discussion or generally when you just want to give a brief intro to what you do. For example, “I work with small businesses who are struggling to get their products or services noticed.”
- A unique selling proposition (USP) is a statement about what makes you and your business different from other businesses. Its primary value is to create competitive differentiation and to communicate specialisation, a guarantee or a different methodology. A USP is often used in marketing materials or in talking with customers who are ready to buy. For example, “We specialise in setting up marketing systems for small brands and start-ups.”
Both the elevator pitch and the USP are cousins of the value proposition but lack the punch of a value proposition.
What makes a great value proposition?
A value proposition should be a clear statement of the tangible benefit a customer gets from using your product or service. It’s outcome focused and stresses the business value of your offering. A great value proposition is specific, often citing numbers or percentages. It may include a quick synopsis of your work with similar customers as a proof source and demonstration of your capability.
Writing a strong value proposition is a skill you can learn, but like any other skill, it helps to see examples from those that did it right…
From Pagely (WordPress hosting): “We help the world’s biggest brands scale and secure WordPress.”
From FreshBooks: “Small business accounting software designed for you, the non-accountant.”
From Skype: “Skype keeps the world talking. For free.”
From Spotify: “Soundtrack your life. Let Spotify bring you the right music for every mood and moment.”
Notice the specificity of these value propositions? The goal is to help prospective customers to visualise exactly what value you could bring their life or their business.
The epidemic of weak value propositions
There’s no kind way to say it, many value propositions are just plain boring. Most importantly though, they’re weak and do nothing to communicate value. Perhaps some of these sound familiar?
- It’s the most technology-advanced system in the market today.
- We are a low-cost provider of this kind of product/service.
- We offer one-stop shopping.
- We have a full range of products to meet your every need.
- We help improve creativity and innovation in businesses.
- I do sales training.
- I help companies decide which technology best meets their needs.
- I’m a lawyer, I do corporate tax work.
- We’re accountants who work with businesses.
If you’re like most people, when you hear statements like these you’re probably thinking, “so what?” In fact, “so what” is a really useful tool to use when crafting your own value proposition but we’ll get to that later.
Plus any time people hear words such as most, best, leading, superior and so on – they immediately dismiss them as self-promoting aggrandisement. These words are simply not believable and detract from your message.
Customer Attracting Value Propositions
So now that you know what doesn’t work, it’s time to figure out what will attract the attention of your prospective customers.
The very best value propositions communicate tangible or measurable benefits that are highly desirable to prospective buyers. In short, they speak to the critical issues your target market is facing. For example, say you’re a web design business describing your value to prospective customers. You might talk about tangible or measurable benefits such as:
- Driving more traffic to the web site
- Decreasing the number of customers who abandon full shopping carts
- Increasing the transaction value per customer
- Improving search engine rankings
- Freeing up corporate resources with improved online capabilities
- Improved marketplace image
- Consistent messaging
But what if results are difficult to quantify?
Agreed, it’s not always possible to translate your “benefits” into actual numbers. If you’re a consultant or professional services provider you’ll most likely struggle with this. There are many reasons for this — not enough time to compare before/after results, the lack of a benchmark and the multiple factors that impact your client’s success. But that doesn’t mean it’s impossible, it just means you need to communicate some other kind of tangible benefit.
So, rather than giving exact figures (which may be impossible), emphasise results that resonate. For example:
- Reducing the high cost of employee turnover
- Speeding up time spent on making critical business decisions
- Maximizing employee productivity at work
- Streamlining processes to increase operational efficiency
Remember the value proposition examples above from well-known businesses? Their common attribute is specificity. The more specific your value proposition, the more attractive it is to your target market.
Drilling down to specificity using the ‘so what?’ method
So how does your value proposition look? Can you describe what you do in terms of tangible results? Or do you need to do some work to enhance your value proposition?
If it’s not strong enough yet, don’t despair. Most businesses have a much stronger one than what they’re currently communicating. They just get caught up describing “what” they provide or “how” they do things.
So, if tangible results aren’t forthcoming, take your thinking to the next level and keep drilling down by asking, “So what?”
- So what if it’s an efficient system?
- So what if it’s a replicable process?
- So what if it’s high quality?
- So what if you improve communication?
- So what if you improve marketplace image?
- So what if you help businesses with their administration?
Asking these questions over and over again, gets you much closer to the real value you bring to customers. Look for the impact or benefit your offering brings to people or businesses. What financial effect does it have or how does it make their life easier?
If your value proposition isn’t tempting potential prospects to meet with you or buy from you, you’ve got some work to do.
But based on what we’ve seen in working with businesses big and small, the biggest benefit you get from understanding your value proposition is a strengthened belief in your own offering. If you truly understand the value you bring to customers you won’t question or doubt if there’s a market for what you do because you’ll know that what you do makes a difference. And ultimately you’ll sell a lot more!