A value proposition is a statement that clearly outlines the tangible benefits your products and services provide to both potential and existing customers. It gives customers a reason to choose your business over competitors. It impacts how people perceive your business and is a key factor in whether they become loyal customers.
The value proposition should focus on 3 core elements: understanding your customer, articulating the benefits, and quantifying the value.
Understanding Your Customer
Before you can start creating your value proposition, you need to understand your customer and their needs. This involves research and analysis to fully understand their wants and needs. You can start by asking yourself key questions such as ‘What drives my customers’ buying decisions?’, ‘What do they value?’ and ‘What are their biggest pain points?’
You should also conduct market research to find out what your competitors are offering. This will help to ensure you create a unique and stand-out value proposition.
Articulating the Benefits
The value proposition should focus on the customer’s needs, showing them how your product or service meets or surpasses the benefits they’d receive from a competitor’s. You should identify all of the key benefits clearly (remembering to focus on the customer and not your business) and use language they understand.
If you’re looking to stand out from the competition you should also think about how your business can offer something different, such as additional services or exclusive offers to sweeten the deal.
Quantifying the Value
If possible, you should quantify the value you offer in order to make it easier for the customer to make an informed decision.
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For example, if you offer a service that will save them time, you should try to express this in tangible figures such as 'Our service will save you up to 2 hours a week’. Don’t exaggerate the benefits you offer, as this will only damage your credibility and be seen as disingenuous.
Alternatively, if the benefits you offer cannot be quantified in terms of cost or time saved, you can talk in terms of enhanced quality, such as ‘Our online software will deliver 15% more accurate business operations data’.
Now that you understand the three core elements that you should focus on, here are some best practices to help you create an effective and compelling value proposition;
Keep it Simple - Keep your value proposition as short and simple as possible, using only the language and terminology that your customers understand.
Put Your Focus on the Customer - Your value proposition should focus on the customer, rather than your business. So highlight the benefits your customers can expect, rather than just listing features.
Be Truthful - Don’t exaggerate the benefits you offer. A credible value proposition will result in more trust, loyalty and advocacy from your customers.
Test and Refine - Test your value proposition out with a sample of your target audience. You may even want to try A/B testing multiple options to see which comes out on top. Keep a record of the results and use it to make refinements.
Ultimately, your value proposition should provide a clear and concise summary of the benefits and value you offer which is why understanding your customer and their needs should be your number one priority. Focus on their needs and the benefits you offer, and quantify the value whenever possible. Your value proposition should be tested and refined regularly in order to ensure it remains effective.