To begin this third installment of our brief series on the development of value propositions, let’s briefly review.  Firstly, we’ve been discussing a value proposition focused on acquiring new customers, not one for other constituency groups.  Your value proposition should be realistic and you must be able to deliver on its promises.  In order to start the process of developing a true value proposition, you must begin with objectivity, and it can be helpful to receive input from others outside of your organization.  It is important to clearly contrast your offer from competitors’ offers.  From there, take what you have and begin to refine it with the goal of boiling it down to single statement, clear and concise.

Here are links to Parts One and Two, for those who missed them.  Now, on to Part Three!

Test it
Once you have your value proposition set, it is time to test it.  The ideal way is to get feedback from your customers in order to determine whether you are measuring up to your promises.  There are a variety of ways to request and receive this feedback.  The important thing is to make sure that you are getting an honest assessment of two things.  First, how are you performing for your customers?  Does your performance measure up to your value proposition?  Secondly, is this what truly matters to your customers?  Your value proposition must propose something of actual value, otherwise it becomes a misnomer.  Because you may discover other things which your customers find more valuable, you will likely make changes to your value proposition throughout the testing phase.

Prove it
You may be thinking, “Isn’t this what we were doing during the testing phase?  Weren’t we proving to our customers that we will live up to the value proposition?”  Well, yes.  What I mean here is to prove to your potential customers who are reading your value proposition for the first time that you will live up to it.  This is where you allow your current customers to do the talking for you through testimonials.  Few things are more compelling for prospective customers than reading genuine praise for your company from individuals just like them.  How can you include customer testimonials into your value proposition?  Clearly you cannot include a three or four sentence verbatim testimonial, but there are ways to allude to your customers’ appreciation within the testimonial.  For example, “Our clients appreciate that our prices are 20% lower, while our product lasts 70% longer than our competitors,” or “4 out of 5 customers say our sushi is the best they’ve ever tasted!”

Exceptions to every rule
This section exists in part to be interesting and in part as a bit of caution.  Let’s do a little mix and match game with a few value propositions with which you may be familiar.

____ Everyday low prices                                                                                                          1.  BMW

____ The ultimate driving machine                                                                                         2.  Lending Tree

____ When banks compete, you win                                                                                      3.  Walmart

Okay, these are more like slogans than genuine value propositions.  For these brands which are so immediately recognizable, these slogans work.  However, imagine that you have never heard of Walmart.  If you read, “Everyday low prices,” you will think, “Great – low prices on what?”  The point is not to fall into the trap of using a cute catchphrase as your value proposition.  While it may work on occasion, more often than not when a prospective customer is trying to compare your company to others in order to determine which is going to best meet his or her needs, expectations, etc… that customer wants to hear you tell them exactly what you can provide which is better than those competitors.

We hope that this series has been helpful to you in establishing the importance of value propositions to the branding process.  When undertaking a marketing effort such as this, don’t be afraid to seek help, research and seek out as many resources as possible, and most of all, don’t be discouraged by some trial and error.  Once you have completed the process, developed a stellar value proposition, and begin to see it working for you, it will all have been worth it.  Please don’t hesitate to contact us with any feedback and/or questions!

In Part I we discussed what a value proposition is, with regard to winning new customers, and that your value proposition must be realistic and deliverable.  If you missed it, check it out here.  So, on to creating a compelling and successful value proposition!  First though, understand that in order to do so, it will require some contemplation and introspection.  There are many books on this subject containing various instructions on the best path to take when seeking to put together a strategically reasoned value proposition.  Below we have provided an overview of how to consider this task.  It should not be “easy,” per se, but it will be very rewarding when finished.

Where to begin
Time for the introspection mentioned above.  Examine your business model, what you provide to your clients and how you provide it, and consider this:  “What three reasons should prospective customers choose me over my competitors?”  Objectivity (as much as is possible) is key here!  The difficulty in this exercise is that you are more closely familiar with your business, product, or service than anyone else.  Make every effort to pull yourself outside of the company persona and really ponder what it is that you would value most, what is important to you when looking for the product or service you provide.  The best way to do this is to ask others:  current customers, colleagues, and friends.  The answer to this question, along with the input of others should give you a great deal of insight into the tangible benefits that will allow you to move on to constructing or recreating your value proposition.  It may also reveal areas of improvement to make your business better meet the value proposal.

Contrast with competitors
It is important to differentiate yourself from your competitors.  The three reasons exercise above should be an excellent way to start.  The point here is to tell your prospective customers what you do better than your competitors.  It is okay to match them in certain areas, as long as you draw a clear distinction on some element of value that will cause a prospective customer to choose you and give you a competitive advantage.  This will likely require you to delve into the introspection and querying mentioned above, particularly depending upon whether you serve businesses or consumers.

Refine it
This can be the most difficult part for many people.  Many business and marketing gurus suggest that you should refine your value proposition into a single, clear and concise sentence, and that is a great idea.  Clear and concise is great, but it must also be believable!  Going back to our earlier example, if a prospective customer reads your value proposal, no matter what it is, and his or her first though is, “There’s no way that’s true,” then there is no way that he or she will give you a chance to prove it.  I can’t stress enough to steer clear of outlandish claims.

In Part III we will take a few other important elements in creating a value proposition, as well as a few examples.  Remember that this is an essential part of branding your business and should not be taken lightly.  For some, this comes naturally and very little effort is needed to come up with an instantly credible and stellar value proposition.  If that is not you, not to worry!  Please let us know if you have any questions, and we can also guide you to some good resources on the topic.  Thanks for reading, and see you next time!

Everyone is in sales, to one degree or another.  If you are out of work, you are selling yourself and your skill set to a prospective employer each and every time you interview or network.  If you are a manager at a company, you are selling your leadership style to each and every employee you manage.  If you operate a non-profit organization, you are selling the importance of your charitable work.  You get the idea.  Everyone wants a leg up, wants to separate him or herself from the competition, to get out in front of the pack and stay there.  There are many ways to accomplish this in the grand scheme of things, but in business, the first piece of the puzzle is to win customers.  An essential element of this is your company’s customer value proposition.

According to Investopedia, a value proposition is, “a business or marketing statement that summarizes why a consumer should buy a product or use a service.”  In other words, it’s your opportunity to separate yourself from the pack, and give yourself the leg up on the competition.  The idea is to win customers and to provide exemplary service in order to retain those customers.  We’ll tackle a few important elements briefly here, before discussing some steps to building your value proposition.

For customers
An important distinction is that we are discussing a prospective customer value proposition, i.e. a strategy for winning new customers.  Value propositions may be constructed for current customers and various constituency groups like employees, partners or investors.  Though the value proposition structure is going to be similar, the goals of each differ, and so the focus here will be specifically for customer-building.

Realistic and deliverable
You should be able to deliver on your promise(s).  Suppose that you own an HVAC company.  Desiring to win customers, you determine that your value proposition is, “We are the least expensive in the world, we can repair any HVAC unit and have it running BETTER than new, no matter the problem, and we will never be late to, or cancel, an appointment!”  Well… okay.  There are several things wrong here, but most obviously, these are promises which can’t possibly be kept.  In addition to the likelihood that many prospective customers will be turned off by the hyperbole, the first time you tell a customer that their HVAC unit must be replaced because there’s a family of badgers living in it, they are going to be angry that you couldn’t repair it as you’d promised.  Clearly this is an extreme example, but it illustrates the point:  deliverable promises.

In Part II of this series, we will explore how to go about developing your company’s value proposition, as well as exploring some examples.  We hope this has been helpful, and we always encourage you to contact us with any questions.