“What’s in it for me?”
Like it or not, this is what everyone asks themselves when considering whether to do business with a company. Put bluntly, it may sound cynical. But people are right to want to make good use of their time, talent and resources. So even the most idealistic customer, who lives every day in the service of some greater good, is on some level asking the question, “What’s in it for me?”
That’s why we’re here talking about value propositions. The health of your business depends your ability to communicate how your business will provide value to your customer. The WORLD depends on it! (You might feel like that’s getting carried away, but speaking as a strategy-first creative agency, it’s sometimes our point of view.)
The Definition of Value Propositions & Why They Can Sometimes Fail
The health of your business depends on a clearly stated set of value propositions.
A value proposition is a statement that summarizes why a customer would choose your product or service. A clear, succinct and memorable value proposition is the key to winning new customers.
Value propositions fail for a variety of reasons, such as:
- They provide or speak to the wrong solution even though the problem is understood. This may reflect faulty priorities or a lack of perspective.
- They provide a viable solution but not for the customer segment they’re after. This may be due simply to a failure to pivot if the product or service, once developed, doesn’t suit the audience originally intended.
- They don’t position their offerings effectively. This tends to be because of friction in the sales process or brand-centric marketing. For instance, a business might have a booking process or sales model that doesn’t align to its customers’ behavior. Or it might talk about technical features that are impressive but do not speak to their customers’ interests or desires.
A viable value proposition has to be designed to satisfy customer wants, which are usually both tangible and intangible. It can be quantitative, qualitative, or both.
A marketable value proposition is one that’s described in a way that speaks to the customer’s needs and desires. It is empathic, simply stated, and customer-centric.
Here’s how to create a viable, marketable value proposition baked to buttery, golden-brown perfection.
Step 1: Designing Your Value Proposition
Designing a value proposition begins not with your offerings but with a Customer Profile that defines the jobs they’re trying to get done, pains they want to avoid or reduce, and gains or outcomes they want to enjoy. The basic methodology of this is to ask a lot of “trigger” questions. Here are some provided by Strategyzer, the management consulting and software company that developed the extremely useful Business Model Canvas.
Customer Jobs | Customer Gains | Customer Pains
Once you’ve gotten clarity about these elements, you design, define, refine, and tweak your offerings to fit them. That way, you’ll never have a solution looking for a problem. (Ick.)
Step 2: Defining Your Value Proposition (internal)
Business Model Generation offers a “non-exhaustive list” of elements that factor into the customer value proposition:
- Newness
- Performance
- Customization
- “Getting the job done”
- Design
- Brand/Status
- Price
- Cost reduction
- Risk reduction
- Accessibility
- Convenience/Usability
A strong value proposition will include some combination of the above, or perhaps something else altogether (once again, the list isn’t exhaustive).
These are very general, so here are some examples of common features they embody:
- Risk reduction – Think regulatory compliance services, security hardware & software, and household safety products. But also think of add-ons like warranties on products and workmanship.
- Cost reduction – Think software as a service (SaaS) and cloud computing in general. Any service or pricing structure that lowers up-front costs or total costs checks this box.
If this is new to you, another way to get your finger wrapped around it is asking: Which value propositions are mutually exclusive? Which ones are mutually reinforcing? In the case of luxury brands, for instance, Accessibility and Status are mutually exclusive. Price and Performance tend to involve tradeoffs as well.
If you’re running a business you already know you can’t be all things to all people, but many who grasp this fundamental truth still cast their net too wide because they don’t have clarity about the elements of their value proposition.
Step 3: Describing Your Value Proposition (external)
To effectively describe and position your value proposition, you need empathic, clear language. If you’ve designed and internally defined a viable value proposition, you may think you’ve covered all your bases. But people still run into trouble here by using brand-centric language (e.g., talking about your intellectual property, impressive specs, and brilliant leadership team), or just asking the customer to accept too much at face value.
There’s virtually no limit to the number of ways you can add clear, empathic language to your marketing. Your website, nurture emails, product descriptions, social media accounts, and every other marketing asset you use presents opportunities to reinforce your value proposition. And one thing we do at Old Town Media to make it compelling and consistent across channels is to start by building your Brand Story.
Value Proposition Examples and Final Takeaway
Your needs would hardly be satisfied without a few examples, so we’ll close with the following:
Panera: As one of the original “fast-casual” restaurant concepts, Panera eliminated the tradeoff between convenience and healthy, wholesome, fresh food choices.
- Features: Health-consciousness | Convenience | Quality
[yellow tail] Wines: The first winemaker to achieve international success by appealing to people who wanted to casually enjoy decent wine, eliminating the tradeoff between becoming wine snobs and winos. They also have fun labels!
- Features: Enjoyment | Accessibility | Price | Design
Southwest Airlines: A comparatively inexpensive, no frills airline that actually has good customer service and employee morale.
- Features: Accessibility | Cost-reduction | Civility
A clear-eyed understanding of your customer wants is essential to developing products and services that suit them–and just as importantly, positioning them effectively.
And here’s the final takeaway: From a customer perspective, your value proposition is basically your justification for existing.
Schedule a 30-minute call with our CEO, Miles Kailburn, to learn about how our Path to Growth can help you design, define, and describe a winning value proposition.
