A company’s value proposition is one of the most important conversion factors for a company, yet 54% of companies do nothing to optimize their value prop. Your value prop is the core of your competitive advantage – it is the articulation of the value you add to your customer, and why someone should buy from you instead of your competitor. It identifies the key differentiators that allow your business to solve problems that the competition cannot. Your value prop is NOT a tagline, slogan, or way to position yourself in the market, though these are all important as well.
A compelling value prop is especially important for small businesses and startups who can’t survive on brand recognition and need to work harder to convince the buyer to trust an unknown name. Many startups do not have a clear idea of the value their innovation brings to the market, and failure to define this before rolling out their product can be very costly.
How to Develop a Great Value Prop
Identify customer benefits: Come up with a list of the benefits your products offer to the customer.
Link benefits to your value offering: Link these benefits with the mechanism for providing value your company offers.
Define your basis for differentiation in the market: Define who your target customer is, what you offer them, and how you are different from the other options in the market.
To create the most effective value prop, you have to first develop a deep understanding of your customer and their needs. Define personas for your customers and put yourself in their shoes to figure out what motivates them and what value your company can add.
You also need a clear understanding of the market so you can identify what differentiates you from your competitors and highlight these attributes in your value prop. Market research and voice of the customer feedback surveys are two great ways to gain insights into the market.
Sounds easy, right? In reality writing an effective value prop is very difficult, but well worth the efforts. Not only does your value prop need to convey your offerings and their value to the customer, it needs to be clear and easy to understand. It should be written in the voice of the customer and should not include confusing industry jargon. The customer should be able to read your value prop and understand what your company offers them within 30 seconds. In order to make sure your value prop is clear and fully represents your company, get feedback from as many employees as possible, in as many departments as possible.
These tips should help you create a compelling value prop or optimize your existing one, increasing your conversion rates and thus your revenue. For a more in-depth look at value creation strategies, check out our white paper on Value Creation Selling.