Why do you need a value proposition?
Value Proposition and why it is crucial to have if you want business growth:
In the business landscape of today the need for a clear value proposition has risen from important to that of a crucial for your business growth and sales strategy.
So what exactly is a value proposition? The concept of a value proposition is simple; it is the value you are offering to a defined stakeholder group. The VALUE you offer; not the product or services you provide.
Put simply, when you buy a drill, do you buy a drill?
Or do you buy a hole in the wall?
There are always exceptions to the rule, but the majority will agree, it’s the hole in the wall that you buy.
In this instance, the hole in the wall is the value you offer to your target stakeholder group of DIY enthusiasts. Your drill is the product you recommend they use to create the value offer. Why people should buy your drill (not the product they are buying) forms the basis of your value proposition.
Each stakeholder group will have a different WHY that need to be communicated, thus a different value proposition.
For example, stockists, investors, end users, and potential partners are your stakeholders. There is whole ecosystem to be catered for when it comes to the value proposition. This means that your value proposition is not just a key component of your marketing plan, but key to your sales and growth plan too.
For larger firms the creation of the value proposition requires internal collaboration across sales, brand, marketing, business development and product development. It is important to remember that all these departments prioritise different stakeholder groups. All must work together to ensure what could result in complex multiple-messaging is clear, concise and cohesive for all audiences. This working practice is of course the elusive, inter-departmental collaboration, and it is why organisations yearn for it!
The key components when considering a value proposition for any stakeholder group are simple. What are the needs and wants of your target audience, and what is it that they fear. The fear of an experienced DIY enthusiast when drilling a hole in the wall will certainly be different to mine; I am much more of a novice when it comes to these things. Sometimes, people will also start to include the unknown fears of a stakeholder group; the fears they are yet to discover!
Once you have established these points, you can then start to embark on considering the benefits and features your service or product offers; how you will alleviate the fears and deliver directly on the customer needs and wants identified. It is also important to list and be conscious of substitutes that exist for your product or service in the market place. For example, going back to our “hole in the wall” you can purchase; electric drills, hand drills, push drills or as in the majority of my cases, some nails and hammer!
Most importantly, in your value proposition, describe the experience each audience segment will receive when dealing with your business. We live in a world where the experience of interactions with a brand, product or service is now King, Queen and Castle. It simply is this way. No debating about it anymore. It does not matter if you are large or small, a private enterprise or a not-for-profit. Experience is everything. Communicate it. What will it feel like to work with you? What will the experience of using your product or service be like?
It should really go without saying, but I am going to say it! Make sure everything included in your value proposition is deliverable and this includes the experience too! Anchor everything in your value proposition to action and deliverables.
Important to note at this point is the radical difference in emphasis and thus mind-set that the value proposition holds in comparison to the more tradition marketing mix approach. If this shift in mind-set is yet to be clear to you, read and re-read this blog post, or google this topic until that shift in thinking sinks in.
Final word; keep it simple, clear and concise. Today, the world is busy, loud, cluttered and full of noise. As a result our attention spans have decreased. Keep your messaging valuable to those you are communicating with. You are taking their time, and time is money! This “age old phrase” and remains today, as was.
Written by Sophie Medd