Consumer choice has never been greater. In fact, you can expect 30,000 new products to hit the market each year. With competition so immense, and the chances of failure so high (at a rate of 95 percent, to be exact), attention should be paid to delivering value to your target audience. One of the most effective ways is to focus on your value proposition.
A value proposition, if you don’t already know, is the main benefit consumers can expect when doing business with your brand. It’s a short narrative explaining how exactly your products or services will help a customer’s life in a distinct way.
Apple’s value proposition, for example, is all about offering a unique experience. Uber, on the other hand, focuses on user convenience, while Slack promises greater productivity. Each of these brands makes promises with their value proposition, and then does everything possible to make sure they deliver on their commitments consistently.
They also use their value propositions to differentiate themselves from others in their industries. By doing so, they’re in a much better position to attract the right prospects and gain market shares in their respective targeted segments.
Clearing the Field
To develop a compelling value proposition, you must get clear on what you excel at — and how your product or service provides a solution to at least one of your target audience’s pain points. Figure out exactly what strengths you bring to the table. Determine how these strengths stack up against your competitors. And take a long, hard look at whether these strengths do anything to differentiate your products or services from the rest of the competition.
The creation process is more about asking the right questions than it is anything else, which will require you to be brutally honest with your answers about your offerings. It’ll also require you to be truthful about the current consumer landscape. Once you’re ready to do this, you can turn your attention to the following steps:
1. Gather customer data. The foundation of any good value proposition will always start with a solid understanding of your target audience. If you’ve already been gathering customer data, then the process should be relatively straightforward. If not, then capture intelligence from three very distinct perspectives: jobs, pains, and gains.
“Jobs” is the most obvious. Verify what a customer base hopes to accomplish at work or home. Then, identify the obstacles – or “pains” – getting in the way and determine what exactly the customer “gains” if he or she were to overcome the established pain. By structuring customer data in this way, you bring a method to the madness.
2. Map the data to your brand. A value proposition – a compelling one, at that – will serve as a promise to your customer base, so it should correspond with the customer data you’ve been collecting. Establish how your products or services alleviate customer “pains” and what the customer “gains” by purchasing your products or services.
But don’t stop there. Validate your findings by seeking feedback from your customer base on what they like the most about your products or services. Is it convenience? Is it price? What about the quality of your offerings compared to the competition? When you can align your brand with your target audience, you’ve got the makings of good value proposition.
3. Conduct a competitive analysis. Consumers will inevitably ascribe a value to your products or services. It’s what they call “perceived value,” and part of this perception is based on what’s already available in the market. In other words, get to know the competition. What value are they offering to your target audience? Is it quality? Is it price?
By studying your competitors, you ensure that your value proposition becomes a differentiator. You’re not highlighting the same benefits or merits as others in the marketplace. Your value proposition becomes more distinct and unique to your brand, which can then make marketing to your target audience much easier. You know your distinct value.
4. Verify the real value. Good value propositions will speak to a use case for your offerings. So dig deeper into the specifics of the customer’s “job” and how it relates to your brand. Does your product or service help people complete a specific task? Will it make them feel a certain way? Will it change other people’s perceptions of them?
If your product is functional in nature, make sure the value proposition highlights that function. The same is true for products that have social, emotional, or personal implications. Skipping this step often means that you risk clouding the real value of your goods or services and that the proposition won’t resonate with your customer base as it should.
A good value proposition makes it much easier to conduct business in today’s marketplace. All you need to do is look back at this promise to provide direction with everything from marketing and customer service to sales and delivery.
Jennifer Tomlinson is senior manager of channel marketing at Microsoft. She leads partner marketing efforts to help companies manage their current customers and grow their customer base. Jennifer has more than 20 years of experience in implementing successful, scalable marketing strategies for product, audience, and channel marketing in enterprise and small- and medium-sized businesses.
