What Is A Value Proposition?

Welcome back to the latest edition of the Impactful Influencer, it's great to see you here!

In this Linked In newsletter, we're going to take a deep dive into what a value proposition is, and why, as a business owner, you need one.

If you’re starting a new venture, or looking to improve the performance of your existing one, a value proposition will lay the foundation for your success.

Your value proposition is the driving force behind why your client or customer will choose you over others.

It helps you create a message to market that deeply resonates with your target audience, so you stand out from the crowd.

Every day companies design products and services to improve their customers lives. However, 72% of those product and service innovations fail to deliver on expectations.

This means that customers don't care about seven out of ten new products introduced to the market.

When you have a strong value proposition, it doesn't have to be this way.

Today, we’re going to give a framework to ensure your value proposition is clear, concise, and memorable, so that your dream prospects pay attention and say “yes!” to you.

?Let’s go!

A value proposition is a statement that clearly communicates the value your product or service provides to your clients or customers.

It answers the question, “Why should I buy from you?”

It will help your business succeed.

Of course YOU believe you have something great to offer (after all, your business is your baby!) - however, you need to make sure your target audience agrees!

Your value proposition helps you capture the attention of your dream buyers by communicating the benefit they can achieve from their engagement with you.?

It’s not enough today to simply offer a product or service; you also need to clearly communicate why yours is the best choice available.

That is exactly what a value proposition will help you do.

What Is The Purpose Of A Value Proposition?

The purpose is to clearly communicate the unique value your product or service provides.

A well-designed value proposition will help you attract new customers, retain existing ones, increase conversions, and ultimately, drive revenue and profit.

Before we get into it, though, let’s clarify the difference between a client or customer, because I'll be referring to both here.

The terms can be used interchangeably.

However: a customer is generally someone who purchases goods or services through a transaction that is short-term and impersonal.

They are mostly found in b2c (business to consumer) businesses, like retail and hospitality.

A client, on the other hand, is someone who engages the services of a professional. They receive personalised service, advice, and expertise.

Clients are common in professional services, and of course marketing businesses like mine.

I’ll be referring to both clients and customers here, because a value proposition is needed for every type of business, large and small.

How Does A Value Proposition Differ From A Unique Selling Proposition (USP)?

A unique selling proposition is a specific aspect or feature of a product or service that differentiates it from others in its market.

It's a statement that clearly conveys what makes a product or service unique, and why it's superior to the available alternatives.

While the value proposition encompasses the overall value and benefit a customer receives from a product or service, the unique selling proposition reveals the most valuable aspect that sets a product or service apart from its rivals.

Both the value proposition and the USP play an important role in brand strategy, by helping businesses communicate what makes them desirable and unique.

How Can I Make My Value Proposition Strong?

A strong value proposition resonates with your prospect’s needs, desires, and pain points, and shows how you can solve their problem or fulfil their dreams in a way their other options can’t.

In crafting your value proposition, it’s important to deeply understand your target audience and what they care about.

What problems do they need to solve? What ambitions do they have?

How can you address those needs and desires in a way that is genuinely better than others who offer something similar?

Once you understand this, your value proposition can develop in the most powerful and effective way.

Benefits Of A Strong Value Proposition

A? strong value proposition generates many benefits.

It helps you attract and retain your ideal clients or customers.

It will reduce customer churn, as they’ll understand the ongoing value your products or services can provide for them.

?It will improve brand perception and increase loyalty for your business.

This is not just amongst your buyers: it will also extend to your employees, partners and suppliers too.

By investing in a strong, clear, and concise value proposition, businesses acquire a powerful tool to drive future growth and success.

How to Create Your Value Proposition

?Step 1: Identify your target audience.

If you don’t know exactly who you’re targeting, and why they would want to buy from you, you’ll need to start here.

Demographics like age, gender, occupation and income level are helpful, but even more important - you'll need to be deeply in tune with your target audience’s needs, pain points, and dreams, to truly understand what would motivate them to purchase from you.

The golden rule here is: never, ever guess.

?You are not your target client or customer. Even if you are, you can never be a ‘representative sample’, and you have to factor in the ‘false consensus effect’.

The False Consensus Effect is a cognitive bias that occurs when individuals overestimate the extent to which their own beliefs, opinions, values, or behaviours are typical and shared by others.

?In a business context, this can lead an entrepreneur to mistakenly believe that their idea is more universally appealing or in demand than it actually is.

So remember, what seems like a good idea to you always needs to be tested and validated with your market before you invest resources into marketing it.

?Step 2: Define your USP and message to market

?Once you know who you’re targeting, you need to define what sets you apart from your competitors.

Remember: Your unique selling proposition (USP) is what makes your product or service different and (hopefully) better than anything else that’s on the market.

This could be a specific feature, a unique benefit, or a particular way you deliver your product or service.

?Your USP can then be turned into a tagline to set you apart.

Let’s look at a few well known examples:

Avis: "We’re number two. We try harder."

BMW: "The Ultimate Driving Machine."

TaskRabbit: "Your trusted handyman."

Air BnB: “ Belong anywhere”

Uber: "Tap the app, get a ride."

Struggling to define your USP? Let’s talk! https://idealclientsuccess.com/zoom30

Step 3. Test and refine.

Creating a strong value proposition requires you to test and validate to ensure it resonates with your target audience.

You may want to run polls or surveys, conduct interviews, and look at data and metrics to see how well your message is being received.

It is not enough just to seek the opinions of others, although this is important when formulating and tweaking your offer.

Validating means putting out an offer and seeing who buys.

This is the point at which 'rubber hits road' and your testing and refining moves beyond concept to commercial performance.

Typical metrics to validate include conversion rates, projected or actual customer lifetime value, and revenue growth rates.

?Step 4: Keep it real

Customers value trust and honesty so much that they’re willing to?pay more?for it.

46% of consumers say they would pay more to purchase from brands they can trust.

Therefore your value proposition can’t be made up.

It should be honest and reflect your business’s core values and mission.

Never overpromise what you can’t deliver.

Avoid making false claims, even if you think that’s what will tempt your market to buy, as this is the fastest way to lose customers and destroy your reputation.

Value Proposition Elements

In order to create a value proposition that resonates with your target audience and drives conversions, you will need to include these key elements:

1. A detailed inventory of your target customer needs.

Who are the specific group you are targeting with your product or service?

What are their problems or needs, and how does your product or service solve them?

?If you’re unclear about this, your message to market will be weak and you will introduce risk into your business.

It will be much harder to make sales if you’re talking to people who are a poor fit for what you do.

You may need to revisit your buyer persona as your business evolves to ensure you are speaking to exactly the right audience for you.

If your business is small, it is better to focus on one group.?

When your business is growing, and you feel confident to introduce new products or services, you can segment your buyers.

Not sure how to do this? Happy to get on a call! https://idealclientsuccess.com/zoom30

?2. A headline or attention-grabbing statement.

You’ll need a short, powerful statement that captures the essence of what you do.

?Its purpose is to grab the attention of your target audience and motivate them to find out more.

A good headline should be clear, concise, and compelling, making your audience understand the value of what you do.

?3. A list of your offer’s features, advantages and benefits

As you may know, features are the factual aspects of your offer that differentiate you from others. Advantages are the reasons why those features are helpful, while benefits are ?specific to your target audience and reflect the positive difference your product or service can make to them.

?When you focus on the benefits as opposed to the features and advantages your target audience will truly understand how you can help them solve their problems or achieve their goals.

4. Your unique selling proposition.

Remember: your USP is what sets you apart from your competition. It should be based on your strengths and what you do best.

?The clue is in the word unique. There needs to be something that others don’t do that you do really well, and this should be communicated clearly and consistently in your value proposition.

?5. Some case studies, reviews and testimonials.

You’ll need social proof in the form of testimonials, case studies and reviews to demonstrate that your product or service works and has delivered results for others. ?

This will boost conversions and eliminate the natural scepticism that people feel when they’re invited to invest in something new.

Social proof adds credibility to your value proposition and builds trust with your target audience.

The higher the price point, the more specific and data driven your social proof will need to be.

There is no point (for example) in offering someone a ￡250,000 investment opportunity, on the basis of a glowing character reference saying what a nice person you are.

?6. Pricing.?

Pricing is an important element of your value proposition as it helps your target audience understand the value of your offer, relative to the cost.

Pricing will always influence the perception of you and your product and service.

Premium pricing positions your brand as the luxury option, while discount pricing positions you as the budget-friendly choice.

You should always be clear about your pricing compared to others who have a similar offer, as your prospects will be evaluating you in this way too.

?7. A call to action.?

A call to action (CTA) is a clear and specific statement that tells your target audience what you want them to do next.

Whether it’s to sign up for a free trial, make a purchase, or request more information, your CTA should be compelling and easy to follow.

A strong CTA can significantly increase conversions by encouraging your target audience to take prompt action.

Simple Value Proposition Framework

If you want to get started on building out your value proposition, here’s a framework you can use.

• Customer? Avatar

This is where you identify your target customer—the specific audience that your product or service is intended for. ?With this, you can tailor your messaging and marketing efforts to their specific needs and pain points.

• ?Problem/pain point

This is where you state the primary problem your product or service solves. By identifying the pain points that your target customer is experiencing, you will demonstrate the value of your solution and how it addresses their specific challenges.

• Solution?

Try to explain your solution in the simplest terms, and especially how it addresses those problems or pain points that you ‘ve identified. List the unique benefits of your product or service and how they’re different from your rivals.

• Headline

Write a short, attention-grabbing phrase that summarises the key benefits of your product or service.

This is the first thing that your target audience will encounter, so it needs to be clear, concise, and compelling.

• Subheader

A subheader is a longer description of your solution. This will typically be 2-3 sentences in length.

You’ll provide more detail about how your product or service works, and especially how it solves the specific problem or pain point that your clients or customers are facing.

This should be written in a style that resonates with your target customer and speaks directly to their needs and concerns.

?Using The Value Proposition Canvas

The value proposition canvas is a framework to ensure a product or service is positioned around the customer values and needs.

The value proposition canvas was initially developed by Dr Alexander Osterwalder as a framework to test product/market fit.

It can be used when there is need to refine an existing product or service offering or where a new offer is being developed from scratch.

This is a tool to intentionally visualise design and test how you create value for customers.

The value proposition canvas consists of two parts, the customer profile and the value map.

The customer profile will describe the "jobs" your customers are trying to get done.

Jobs can be functional, like getting from A to B, social, like impressing friends and colleagues, or emotional like gaining peace of mind.

You will also highlight your customer pains, which get in the way of your customers who want to get the job done.

You will list the negative outcomes that customers hope to avoid, including their dissatisfaction with existing solutions, as well as their frustrations, risks or obstacles related to performing a job.

This will help you visualise, test and track your understanding of the people or companies you intend to create value for.

It's a map that becomes clearer the more you learn about your customers.

The second part of the canvas is the value map.

With this, you list the products and services your value proposition builds on.

You will describe in which way your products and services are pain relievers.

How they eliminate reduce or minimise problems and make customers lives easier.

The value map makes clear how your products and services relieve pains and create gains. Use it to design test and iterate your value proposition until you figure out what resonates with customers.

Your customer profile may contain countless jobs, pains and gains, but your value map helps you highlight which ones you should focus on.

It's important to remember: an outstanding value proposition can still fail if your business model is flawed.

Successful companies combine outstanding value propositions with scalable and profitable business models.

This is such a big and important topic, I'm going to leave it for the next edition of the newsletter!

FYI: I love to support my subscribers in the most helpful and informative way, so If you'd like me to throw the spotlight on any other topics relating to brand marketing, or business growth, why not let me know and I'll do that soon!

That's it for today's Impactful Influencer newsletter!

I want to thank you for stopping by and spending time in my company.

If you are struggling with your brand strategy and development, myself and my team are here to help.

Here's the link again to book a call: https://idealclientsuccess.com/zoom30

Before we part company, can I ask you a favour?

I put so much work into creating value through this newsletter, and it would mean a lot to me if you could like, comment, share and subscribe!

Thanks so much for your interest and attention. I hope to see you again soon!

Jane xxxx