I have several friends who own their own businesses, so I have decided to discuss value proposition with a few of them. Value proposition is customer value delivered to a specific target market (Roberts 55). When asked about their value proposition, I hear a description of their business model. But that’s not what most customers care about. Customers want to know: “What’s in it for me?” and “Why should I buy from you?"
This is an area that even seasoned marketers have trouble with, because there is so much confusion about what makes a value proposition effective, including how to find one in the first place. Making a few small changes can have a big impact across all of your marketing efforts. I have provided some characteristics of strong value propositions below to help you evaluate.
Crafting a value proposition requires a significant reflection on what is unique about your company and your products and services. Try describing in 10 words why people should buy from your company instead of another. What would you communicate?
Characteristics of Strong Value Propositions:
1. You must differentiate your offer from your competitor's offers
2. You may match a competitor on every dimension of value except one.
3. You need to excel in at least one element of value.
4. In this way you become the best choice for your optimum customer.
5. There is a difference between the value proposition for your company and your product. You must address both.
Characteristics of Strong Value Propositions:
1. You must differentiate your offer from your competitor's offers
2. You may match a competitor on every dimension of value except one.
3. You need to excel in at least one element of value.
4. In this way you become the best choice for your optimum customer.
5. There is a difference between the value proposition for your company and your product. You must address both.
I have seen and suffered in a number of small companies that have poorly crafted value propositions. All too often in the real world I have seen a value proposition manifesting itself really as a way to satisfy the CEO of a company to match their world view. A disastrous situation.
ReplyDeleteTruly crafting an accurate value proposition is as you say very difficult even for marketing experts. It is much like a self analysis situation as you get to the reason for the existence of the product. I have seen it to be almost as hard to justify ones own existence since it is often linked to your professional existence in the business unit.
You said: "Customers want to know: 'What’s in it for me?' and 'Why should I buy from you?'"
ReplyDeleteThat really is the ultimate question, isn't it? The organizations that can cleanly answer and differentiate this often have an advantage much of their competition can't match. Competition doesn't matter; customers do. In fact, I saw a terrific quotation the other day that hits on this idea:
"If you spend all your time looking at your competition, your product will look like your competition's ass." (Mike Lee via Twitter)