Many businesses are offering the same good or service as others operating in their area. The thing that sets one company apart from its competition is its value proposition.
When an entrepreneur starts a company, or a larger business hopes to expand into new markets, it is essential to clearly define and test the proposed value proposition to ensure the product or service appeals to one’s target market. It is a critical part of any marketing plan or product launch strategy
What Is A Value Proposition
A value proposition is not a mission statement or a hodgepodge of business jargon. It’s a clear-cut description of:
- What sets the product or service apart.
- How it will add value to a customer’s life.
- What problems the product or service resolves.
You can find wonderful examples of value propositions by looking at the various apps and websites you frequent most often. For example, Lyft sets up its proposition immediately by telling users that it:
- Has “rides on tap.”
- Is “budget-friendly.”
- Is safe and secure.
Another company with a clear value proposition is Slack. This business productivity software shares the value it can provide by saying that it is “Your hub for teamwork” and then breaking that down into:
- Defining how the chat communication works.
- Sharing that conversations are searchable.
- Integrating with everyday work apps.
- Discussing their security and data protection measures.
As you can see, these value propositions are not just a blurb or a company motto. They are a quick drill-down into the great things a business provides its customers.
How to Create Your Value Proposition
The next step is creating a value proposition. This is certainly easier to do when you are providing a completely unique product or service. However, consider the fact that we listed Lyft as having a great proposition. This ride-sharing app is similar to Uber, but the company has managed to carve out a different market for itself.
So, whether you are running a coffee shop positioned next to a Starbucks or your company provides home inspections to realtors, you can create a unique value proposition that sets your business apart from the competition. Here is an overview of how to do it:
- Research your competition. What do they provide and how do you do it differently? If you provide the same or similar service, how can you take it to the next level?
- Drill down into what you are really selling. Is it a great experience, time savings, ease of delivery, price savings, or something else?
- List out all of the benefits of signing up with your company for your product or service.
- Next, survey customers and potential clients to find out which of the benefits you’ve discovered or built into your business are most important to them. Be specific in your questions.
- Finally, take the top three most popular value propositions and have your marketing team come up with language around them. These should be featured on your website and promotional materials.
Note: You can always take additional value propositions that you feel are important to your business model and create a “learn more” section on your website that allows you to provide curious clients with all of the benefits they will experience when working with you.
While a value proposition is important in marketing and branding your company, it’s also valuable for you and your staff to understand what makes you stand apart. Knowing how your company can beat the competition gives employees the knowledge and confidence to talk about their work in everyday life. Who knows, you may acquire your best or most profitable client through an employee who is proud to work at your business.