Do you know what your business’s value proposition is? Be honest! If you are scratching your head right now, don’t worry. You are not alone. Developing a compelling, yet succinct value proposition statement is no easy task. Often we are so immersed in the day to day grind of running a business, we fail to see the world from the customer’s point of view. This ‘inside out’ thought process lays shaky foundations for some significant business decisions, none more so than how and where we should target our potential customers.
So What Is A Value Proposition Anyway?
A value proposition is essentially a statement detailing the outcomes customers can expect through engaging with your product or company. The word ‘outcomes’ is key. A strong value proposition leaves customers in no doubt about what exactly it is they gain from engaging with you versus your competitor. Remember it’s NOT about your business, your superior skills or your technologically advanced products. The statement is all about the customer. If you are a company with multiple customer segments, a specific value proposition is required for each. Likewise, if you offer a number of different products or services, each should have its own value proposition. A value proposition needs to resonate with the specific customer segment if it is to have an effect.
So Why Does My Business Need A Value Proposition?
1. To attract the right customer leads
A strong value proposition has the potential to jolt your customer out of their complacency with the status quo i.e. their current supplier/brand. It can make them sit up and take notice of what you are offering and most importantly can give them a compelling reason to take action.
2. To form the basis of all your messaging
Your value proposition forms the basis of all marketing messages from your organisation. When developing website copy, brochure text, corporate presentations, press release etc, your value proposition helps guide and prioritize what you communicate to specific customer segments.
3. To ensure cohesive effort internally
A clearly articulated value proposition ensures all functions within your organisation understand and focus on delivering the outcomes your customers expect. This avoids time being wasted on developing products or add on services which are not perceived as valuable by the customer segment.
How Do I Develop A Value Proposition For My Business/Product Or Service?
It is possible to sit with a blank page and develop a value proposition however there are some great tools out there which can make the job a lot easier! For a couple of years now, I have been using Alexander Osterwalder’s Value Proposition Canvas to help our clients get to the root of how they create value for their clients or customers. The VP canvas is a plugin to the larger Business Model Canvas, both of which have gained significant global praise from business people and consultants alike.
Why The Value Proposition Canvas Works?
The effectiveness of the canvas lies in its ability to focus the organisation on the customer. It systematically drives you to consider the jobs your customer segment are trying to get done, the problems they encounter and the outcomes they desire. It then allows you to match these elements to your product or service offering, enabling you to see, in a very obvious sense, how you are creating value for your customer.