Defined literally, your "value proposition" is that declaration of the value—or use, or usefulness—that your business, product or service proposes to provide to your target customers. If that sounds like a mouthful of marketing mumbo-jumbo, it isn't. In fact, a value proposition is the key to identifying your business intent, just as it describes what your customers can expect to gain by doing business with you.
As the consumer segment grows more discerning with each passing year—largely caused by economic pressures where consumers demand higher value in each and every purchase—it's up to you to ensure you deliver more than your competitors. If this seems like a daunting proposition to you, fear not: There's value to you in this effort, too.
Here's how you can establish your value proposition, and how it can work to provide as much or more value to you as it does for your customers.
Make your promise, proclaim your commitment
In its simplest definition a value proposition is a business' statement of benefit to its target customers. It is a business' introduction to its customers, such to say "Hello" and "Here's what you can expect when you do business with us." In that regard, it is an overture to begin a business-customer relationship in which the business believes it has defined a want or need from a customer's perspective, and has a solution to fulfill that want or need.
It's a differentiator that helps customers determine and decide from whom they'll make a purchase
This can be the delivery of a product or service intended to benefit or otherwise delight a customer, but it's certainly far more than just that. Concisely, the value proposition defines not what the product or service is but, rather, how the business' brand of product or method of service delivery is more desirable than a similar offering of a competitor. It's a differentiator that helps customers determine and decide from whom they'll make a purchase.
If that sounds flatly clinical, it is. It's the bare essence of the value proposition; it is the expression of why your business has the best solution for the customer, above and beyond what competitors might be offering. The value proposition makes a promise to the customer that your business will provide the best product, the best experience and the best value for the customer's dollar.
The key ingredients of a strong value proposition
If a value proposition is your business' promise to your target customers, you'll need to ensure you present it in a clear, concise and demonstrable manner. That is, it's not enough just to say it; you have to prove it! Before getting into the details of how to assert your value proposition, consider these key elements. A strong value proposition does the following:
- It creates interest in your product, service or business brand. Present a compelling argument—or overture—to your potential customers, and they'll likely stop and ask that you tell them more (as opposed to dismissing you without a second glance).
- It provides a statement of differentiation between your business (or product or service) and your competitors. This is essential. With several options available to your customers, you must provide to them the argument of why your offering embodies the greatest value.
- It focuses on your customer's point of view. As you've read from the previous two points, this is aimed at your customer, so it needs to be relatable to them, their needs and their inclinations (though it can sometimes entice them to indulge in something they haven't experienced in the past).
As you can see, these elements make up the core of the promise that you'll offer, your guarantee that all customers will be glad they chose to purchase their product from you. It's your best opportunity to make a good first impression, this based upon a commitment to serve and satisfy them in a way that others don't.
It's not enough to say you're better than the rest—you need to show how this is so
Make your promise memorable
Now comes the moment of truth—or proof—where you indicate how your customers can rely upon your value proposition. It's not enough to simply say that you're better than the rest—you need to show how this is so. This is where tone and style come into play, and where you work to make your proposition relatable to your customers.
It's extremely important that you provide a proposition that's engaging and easy to remember. If you're thinking you need to provide a slogan, well, that's not too far off target. Provide a statement that sums up your offering and value, so customers can quickly understand and internalize it.
For example, if you're operating an antique business, you might proclaim your business as the place "where lost treasures are found, every day." If you're selling vintage records, you might announce "the good old days never sounded better." By these examples, you've indicated your approach to your business and what your customers might expect to experience when they shop with you.
After this, detail how you provide the best merchandise, how you go about finding the truly hard-to-find, and how your customers will feel confident that, if they're not satisfied, you'll gladly return their money. You get the idea—stand in your customers' shoes and determine what you would hope to encounter as a buyer. Then determine how the competition meets those expectations and how you can exceed them.
It's not a one-time exercise
Finally, the key to a truly effective value proposition is that it should always be evolving. That is, you need to engage your customers directly to let them tell you what they like and what they don't like. Determine what might be missing in your product, your service, or your delivery and work to incorporate that into your proposition.
Avoid making promises you can't keep, of course, but strive to continually meet and exceed your customers' wants and needs. When you do, you'll be sure to outshine the competition every time.