The Ultimate Guide to Creating a Value Proposition that Works

When you run a company, you know its ins and outs; you also know how the products and services you offer can benefit the lives of your customers. However, just because you and your team are intimately in tune with these benefits doesn’t mean your customers will understand them–no matter how good your marketing and ad copy is or your social posts are.

Luckily, there are a few tools you can use to help convince people to buy what you offer–and one of the most useful is known as a value proposition.

If you work in, or run a business software company, there’s a good chance you’ve heard of a value proposition and agree that your company should have one. But do you truly have an understanding of what a value proposition is?

In essence, a value proposition is a summary of the value your service or product will deliver to customers once they choose to buy from you. Your value proposition should summarize the benefits you offer, the problems you solve and the things that differentiate you from your competitors/alternative offerings.

Once you get a better understanding of what a value proposition is, you may feel like you’re ready to craft one for your organization. However, to create a value proposition that works, you should review examples of successful value propositions from real world companies. By looking at examples of value propositions that helped companies grow, you can determine what you should (and shouldn’t) include in yours, and how you can use your statement to generate and convert more leads.

What Is a Value Proposition?

As mentioned above, a value proposition lays out the value of buying from your company. If you run a business software company, it makes clear why they should choose your software solutions or services and not those of another company. When your potential customers read your value proposition, they understand why it’s worthwhile to spend their money on what you’re selling: how you help them achieve their ambitions or create remarkable impact, how you’ll solve their problems, how you’ll add to their lives and how they can experience something that no other business software company or product can give them.

On your company website, your value proposition should be the first thing that visitors see. Your value proposition can also feature as the central message (or messages) of your marketing material, since it lays out why people should be attracted to your product or service. You can also use your value proposition in sales pitches and correspondence with potential clients. A value proposition is a good jumping-off point to explain the reasons why clients should consider creating a long-term professional connection with your organization.

Ultimately, every single company should have a value proposition. Regardless of whether there are any companies that do what you do, your value proposition isn’t actually about your company. Your value proposition explains what your customers need and want, and it is an important psychological device not only for getting leads to pick you over competitors/alternative offerings, but also for convincing them to actually spend their money, i.e., create desire.

The Importance of a Value Proposition

So, we know that every company needs a value proposition. But why are these statements so important?

Value propositions help companies increase sales. In fact, a study showed that value propositions can increase conversions up to 90 percent. That’s a huge increase in revenue for companies, and it can help make the difference between financial success and failure.

In addition to increasing conversions, value propositions help differentiate you from competitors. This can help you build a niche for your particular business software company brand and strengthen your reputation.

Finally, you don’t just create value propositions to benefit potential customers. You also use them to help your organization internally. Value propositions are clear, easy-to-understand and easy-to-reference statements that your team can look at to familiarize themselves with your company’s mission and unique offerings. This can help shape a strong organizational culture at a business software company and make everyone feel like they’re working together toward a common goal.

The Elements of a Great Value Proposition

I hope I’ve convinced you that you need to craft a great value proposition. That’s a good first step. But how do you go about doing it? First, familiarize yourself with all the key components of value propositions so you can customize your company’s version.

The key elements of a great value proposition:

• It has a powerful headline. Grab people’s attention right away. A powerful headline can capture someone’s interest and get them to look further into what you’re offering.
• It is written in the language of the customer. Your customer should be able to read and understand your value proposition immediately, without too much thought. This means it should be written in their language. It should describe your value and benefits the way your customer would describe them, not the way you would (so no technical or industry jargon).
• It is short. This one’s straightforward. Don’t write an essay that explains the benefits of what you’re selling. Summarize it into a sentence or two, so people can take it all in with just one bite.
• It explains your differences. Don’t just explain your benefits and features in your value proposition. Also, hone in on what makes you unique and different. This can be the tipping point that persuades a customer to buy.

The Downfalls of Failing Value Propositions

Let’s face it: just because you’ve written a value proposition doesn’t mean that value proposition will work. There are many ways companies craft value propositions that fail, and some of the following elements can cause a value proposition to backfire.

• It tries to be impressive. Don’t try to be impressive with your value proposition. Limit jargon and big words. You don’t need to show off and make potential customers think you’re an expert. You need to get across–concretely–why they should consider giving you their money.
• It reads very generic. You should be straightforward in your value proposition–but don’t be generic. This means you should not look at a value proposition of your competitor and then try to copy it. Your value proposition should use unique language and get at why YOU are worth buying from, not someone who does something similar to you.
• It uses superlatives. When you write a value proposition, you’re not being salesy. You’re simply selling by explaining why you’re awesome and unique. Don’t use superlatives to try to convince people. They come across disingenuous and make you seem like you have to try for customers–rather than simply be worth purchasing from because you exist.

Steps to Writing a Value Proposition

Now that you know what a good value proposition has and doesn’t have, you can start the process of crafting your own. Here’s a simple step-by-step process that can help you get at the language to describe why what you offer is so unique.

1. Get clear about why you do what you do; then work outward

Business expert, consultant and writer Simon Sinek holds to the fact that companies can create the best value propositions when they start with understanding why their company does what it does. Start by taking an ‘outside-in’ approach by:

• formulating ‘what’s broken’ in the world of your customer,
• why it’s key to resolve this once and forever (creating a sense of urgency),
• and what the ideal world would look like if it was resolved.

Then talk about “how” you plan to do those things–from tangible strategies and concepts, to larger business objectives that are uniquely designed to solve your customers’ specific pain points, increase their impact, improve their lives, and shape unique experiences.

Finally, identify the “what” of your business and the nuts and bolts that help you reach your “why.”

2. Hone in on the most important and most interesting parts of your why, how and what

Look at the most interesting things you touched on in your previous discussion. Try to summarize these things in a two- to three-sentence paragraph that explains what you do. By paring down your ideas into a summary of the most important ones, you can end up with a brief outline of why people should value what you do. Remember: Less is more.

3. Consider your uniqueness

Once you’ve written your value out on a piece of paper, focus on the factors that make you unique. Make sure you assess carefully what your competitors or the alternatives (in the eyes of your customers) do and how you do it differently. If you haven’t already done so, make sure you incorporate language that calls out your unique features and capabilities.

4. Make sure it is sticky

Every value proposition for a business software company needs its central idea to be “sticky.” Ideas that are “sticky” are simple to digest and comprehend, and they linger in people’s minds. If a value proposition contains a sticky idea, people will see the idea and remember it. To ensure an idea is sticky, it should meet the six criteria of the SUCCESs Model: it should be simple, unexpected, concrete, credible, emotional and able to tell a story. If your central idea doesn’t meet four or more of the SUCCES criteria, go back and pare down or tweak.

5. Finesse

The ideas you’ve gotten at are the meat of your value proposition. Now finesse the language until your idea becomes clear and sticky and ends up in the language of your customer. At the end of this process, you’ll have yourself a value proposition!

Evaluating Your Value Proposition

Once you’ve finished your value proposition, make sure you evaluate it. To evaluate your value proposition, ask yourself the following:

• Does your value proposition address customer pain points that you solve?
• Does your value proposition point out how you are unique from competitors?
• Does your value proposition describe how your services or products will improve customers’ lives?
• Does your value proposition read clearly and succinctly?
• Does your value proposition read as if a customer was talking about your company?
• Does it communicate your big idea in a sticky way? Look at your value proposition and ensure it meets the SUCCES criteria.

Once you answer yes to all those questions, you have a value proposition that will work. Your final value proposition is now ready to incorporate into your branding and sales materials. It should be front and center on your company website, since your website is like an online storefront for your business. It should show people–from the very start–why they should buy from you. Also, include it in landing pages, social media profiles, email marketing correspondence and even print marketing materials. Finally, incorporate it as the center of your sales pitch. You can and should leverage its power to drive conversations and increase conversions.

Examples of Successful Value Propositions

Looking at successful value propositions from the real world can help give you ideas for your own value proposition. Here are some business software companies that nailed their value propositions and used them as tools to grow and thrive.

Uber

There’s no doubt that Uber has been one of the most successful and disruptive companies of all time. Their model has not only be embraced by customers, but also by businesses around the globe who want to “Be the Uber of [insert name of industry here].” One way that Uber got people to pay attention in the first place was with their value proposition. It reads:

“Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And payment is completely cashless.”

Uber’s simple, short value proposition is written in customer language, and it points out its differences from competitors (taxi cabs that require cash inside). It also explains what pain points it solves–giving drivers directions, handling payments and having to search to find vehicles to ride in.

Drift

Drift is a web-based live chat tool that is used by salespeople and marketers. They have made a huge impact on the business world and become a sought-after communication tool because its leaders have nailed the narrative behind the company and why it’s a solution that organizations should rely on.

To pitch their company, Drift’s execs and salespeople tell a story in popular narrative form: there’s an enemy that must be overcome and their platform is the sole solution that can help them defeat the enemy.

Drift’s value proposition is simple and succinct:

“Conversations. Not Forms. With Drift on your website, any conversation can be a conversion. Instead of traditional marketing and sales platforms that rely on forms and follow ups, Drift connects your business with the best leads in real-time.”

In a similar manner to the sales pitch, the value proposition declares that there’s a problem that needs to be solved for B2B, and that Drift is the solution. It is sticky, easy to understand, and even tells a story, all within the short 3 sentence paragraph.

Gusto

Gusto is a company that has created a B2B software solution that lets companies manage all their HR tasks in one place, online. Gusto succeeded when they created their value proposition in that it both make the company’s uniqueness plain, and it states their value in a way that is simple, credible, and emotional.

Their value proposition reads:

“It’s time to tame the chaos of payroll, benefits, and HR.Get it all done with Gusto.”

Not only does it directly address the customer (in familiar language) and talk about troubling problems the platform could solve, it also clearly summarizes what benefits the services affords users and tells the story of how it can lead an organization from chaotic to manageable.

If you want to succeed at bringing in customers, creating desire, communicating an idea that sticks, and convincing potential customers to buy, you need a value proposition. Spend time crafting one that highlights the unique benefits your company offers, the pain points you solve and how you’re different from businesses that do things like you do. Then, use this statement in your marketing materials, web presence and sales pitch; you can rely on it as a tool to help generate and convert leads.

As a business leader, have you come across value propositions that inspired you or influenced your own statements? Are there companies that have absolutely nailed their value proposition? Let me know your thoughts!

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