Defining Your Value Proposition
Posted in Uncategorized on October 4th, 2009 by admin“Value Proposition” is a phrase that you’ll hear marketing types throw around with some degree of regularity.
The reason is, it’s at the core of everything your business does. Put simply, if you have a good, well defined value proposition, everything else will come easily. If you don’t, well, you’ll that your efforts are constantly being held back by an invisible, yet perceptible, ‘headwind”.
So, what is a ‘value proposition’?
Simply put, it helps to answer the following question in the prospects mind: “Why should I buy from you, and not your competition?”
In a lot of cases we see, even if a business intuitively “knows” their own value proposition, they’ve done a poor job of defining it for the prospect, and an even worse job of articulating it. If the prospect doesn’t instantly ‘get it’, the chances of converting the prospect into a sale diminish significantly.
So what are the characteristics of a well articulated value propostion?
Appeals to a relevant and intense problem instantly
While to most this should be self evident, while raising money for small entrepreneurial companies in silicon valley, I can’t tell you how many times some very smart people were spending time building “better mousetraps” without a clear idea of customer in mind.
We used to call these, “solutions in search of a problem”.
While it’s true that occasionally these turn into products, this is an example of marketing “into the wind”.
Instantly communicates that you understand the problem and you have the solution
Ideally, through your value proposition, and the material that supports it, your prospect can see that you understand his problem. Marketers call this ‘empathy’. One very common technique is in a personal appeal that should look very familiar. It goes something like, “I used to be just like you….”
The reason this advertising cliche looks so familiar is because variations of it continue to work to this day.
The second part is that you have the solution to their problem. The cliche continues, “then I started drinking super magic muscle builder x” (or whatever).
Ideally, it quickly becomes clear that not only do you empathize with their problem, but you are offering the magic bullet that will make their pain go away.
Translate that solution into an obvious and immediate benefit to the customer
There are times that this can be inferred or is obvious. There are many other times when it’s desirable or necessary to spell it out for the prospect.
Some other guidelines for a well articulated value proposition
Quantifiable
Third party verified
idea or concept is not already owned in the customer’s mind by another competitor
Ted..hope your business venture comes to fruition. Your value proposition sounds very much like a “mission statement”. In other words what your company’s purpose is and what you expect to accomplish. Love to hear more. Hugs. Aunt Ada
What is the difference between Value Proposition and Positioning? Sometimes the marketing terms just confuse me…
hahahha….
thanks for keeping it topical jasa. i imagine you’re really not all that confused, but i’ll explain my understanding anyways for those who really are!
your unique selling proposal, or value proposition is related to your positioning but not identical.
i tend to think of ‘positioning’ as how you intend to carve out a niche in a marketplace — or — in the mind of the potential consumer of your product or service.
‘we are a full service brokerage’, ‘we cater to the value conscious customer’, or ‘our product is purchased by the prestige marketplace’, are generic examples of positioning, in my mind.
positioning of course can have lots of elements to it besides just price. one could be service (or lack thereof), like in the case of a discount brokerage.
a (good) value proposition expresses how you intend to pull all the elements together (price, service, product, rep, delivery) and then an expression of how those elements will serve to fulfill a need, or more often eliminate a pain your target customer is feeling in a way that is credible, connects with him/her on a very deep emotional level, and gives a reason to do business with you versus your competitor.
r8r
These tips are too much impressive. And that is so much useful for the marketing lane. So thanks for posting me.
Thanks you for this information, I agree with you on all points..If I’m honest, this helped refresh my memory a bit and I’ll apply this to the marketing project I’m currently working on.
Great article!Really first time heard about Value preposition.So true you have said If we have a good, well defined value proposition, everything else will come easily. If we don’t, well, you’ll that your efforts are constantly being held back by an invisible, yet perceptible, ‘headwind”.
very good your text.
Great point well written i’ll be back soon thank for the post
signed The Auto money affiliate
2 years ago
I appreciate these tips but tell me the the difference between Value Proposition and Positioning? Thanks!
I’m still an undergraduate in marketing but allow me to share with you what I know.
Value proposition is about what you are trying to offer to the customers. The main idea is to convince them that you are “Value for money”. The most basic formula in value proposition is : Benefits – Costs=Value. Where benefits refers to all the tangibles and intangibles they can derive from you offerings against the costs of the product/services. The main idea is to increase the final value. Either u increase by adding benefits or you cut the costs, that depends on the direction of your value proposition.
Positioning statement is about where you want to be among your direct competitors in the product market. It’s kind of like a battle of the mind of the consumers. When you think of reliable cars, you think of toyota. Luxury, maybe Mercedes.
On the whole positioning actually helps to define the target market you want to go after and want them to relate to you almost immediately, value proposition is more about how do u want to go about communicating the value you are offering to your target market. They work hand in hand.
If I want to position myself as the top class airline, I would be offering top services and use the best airplanes etc. OF course I would expect my target arketing to be willing to pay for it and be price inelastic.
If I want to position myself as the cheapest airline, I would be offering no frills and use cheaper planes. I would expect my target market to appreciate my costs cutting and no frills in exchange for cheaper fares. They are price elastic.
The examples just ran off my mind, subjected to flaws but i hope u get the idea.
Hope that helps
post is very good but i want to know that the difference between Value Proposition and Positioning?
Thanks for sharing Knowledgeble information here.
Hello,
Thanks this is very nice information,