Why You Need to Write a More Compelling 'Value Proposition'

Regardless of your industry, what you do, or your business type, two things are true:

1) You rely on customers/clients for your success, (2) You have competitors.

As such, how you market your business is a critical part of business longevity, reputation, and influence.

The business landscape is continuously shifting, but the basic fundamentals of business rarely change.

Whether your company is a scrappy startup or an international company, it needs to find a way to consistently provide value to customers and just as important, it needs to communicate that message succinctly and effortlessly.

At the foundation of these efforts exists the 'value proposition', a deceptively simple set of key messages that serve as an anchor for all sales and communications efforts for an overall brand or a specific offering.

This is why a value proposition becomes so important. Indeed, a value proposition is arguably the most important aspect of your overarching company message, and is potentially the most critical element of your marketing strategy.

Do you want more customers to choose you over your competition? Smart marketers use a compelling value proposition to show prospects why their company is better than the competition.

What is Value?

It is what/how your product/service helps your clients/customers to do or to achieve their end goal in their business(es).

Examples of delivering value:

• Helping save time
• Improving processes
• Helping save money
• Helping make money
• Providing valuable information

What is a Value Proposition?

In its simplest terms, a "value proposition" is a positioning statement that explains what benefit you provide for who and how you do it uniquely well. It describes your target buyer, the pain point you solve, and why you’re distinctly better than the alternatives.” A unique value proposition is a promise to deliver value, the unique part is about differentiating yourself from others. In essence, a Value Proposition is the motivation behind each purchase a customer makes. We don’t get excited by products or services, we are excited by how they will make our lives better . For example, you don’t like the experience of going to the dentist, but you like looking attractive and you like avoiding the agony of mistreated or neglected teeth.

Regardless of your product or service, you almost certainly have competition.

So what makes a customer choose you over another company?

The answer lies in a great value proposition.

Value propositions do not beat around the bush - the message and the intent of a value proposition are clear and obvious. All companies use value propositions to hook customers and reel them in. When companies fail to take the time to develop a value proposition, they risk missing the mark with regard to defining their target audience and reaching their target customer successfully.

Value propositions are not slogans; they are an explanation of how your company is going to solve the customer’s problem and what benefits customers can expect. As such, value propositions can be formed using many different elements, not a single sentence alone (i.e., headlines, sub-text, visuals, and more can also be used to make a value proposition clear to a customer).

The specific definition of a value proposition will differ from company to company.

Your customers are not interested in you or your products per say – they are interested in themselves and their problems with a view to solving their business problems. They have a lot of choice of products they can choose from. If your product stands out, they like what you can do for them. They like how you make their lives easier. They like the way you make them feel about themselves. They like the way your worldview matches theirs. They like what your brand says about them. They like how you can change their world.

"Describes the benefits" - a good value proposition speaks about the outcomes of engaging with your product or service (not your company - a company should have its own separate value proposition).

“…customers can expect…” – stating the obvious, but a value proposition is written in the language of your customer, and framed in a way that will resonate with them. The benefits described must be authentic!

“…your products and services…” – a well-formed value proposition describes in customer-centric language which of your products and services is going to deliver the desired benefits.

If we are going to communicate with customers, we need to first understand their preferences and requirements, then learn how to speak their language. This is the foundation of all sales – knowing your customer, pitching them something they will love, then reminding them that they have made a good decision.

A unique value proposition is essential for any business that wants to clearly communicate to potential customers why it’s better, different and worth buying from.

A value proposition is not:

• An incentive: The word ‘incentive’ is defined as a ‘positive motivational influence’ designed to incentivise a visitor to act right away. Incentives are not value propositions, but often brands confuse them.
• A catchphrase: A slogan or tagline is “a catchphrase or small group of words that are combined in a special way to identify a product or company.” Slogans are not value propositions, but many brands conflate the two.
• It’s not a positioning statement: A positioning statement is an expression of how a given product, service or brand fills a particular consumer need in a way that its competitors don’t. A positioning statement is a subset of a value proposition, but it’s not the same thing.

Building the Value Proposition:

A simple framework from which to build your value proposition.

• For (target companies)
• Who are dissatisfied with (current offering/alternative)
• Our product/service is a (new product/service)
• That provides (key problem-solving capability(ies)
• Unlike (the product/service alternative)

A good value proposition fulfils a number of key tasks:

• It explains how your product or service meets customer needs (relevance)
• It describes the benefits your customers will receive (quantified value)
• It positively positions your product or service in relation to the competition (unique differentiation)

An effective value proposition basically takes into account what the market already has to offer, what the customers are looking for actively or purchasing and what you have to offer that makes it different from the rest.

As a product manager, crafting a compelling value proposition is one of the most important steps in developing your product. It is also one of the most often overlooked even by smart, experienced product managers.

If you are not communicating your strategy and product roadmap in terms of your value proposition, then you are not doing an effective job as a product manager.

A better way to think about a value proposition is as a promise. 

More specifically, a promise to your customers of the value they are going to receive when they engage with your product or service.

Having a strong value proposition that resonates and engages customers is the backbone of your offer to your customer. It won’t just explain, differentiate and engage, it will also increase sales.

Developing a Great Value Proposition for Your Business

Developing a great value proposition starts by first identifying and defining a number of elements related to your business.

This process includes:

• Defining your target audience/buyer
• Identifying the problem/need of your target buyer
• Stating how your company and product/service solves that problem
• Identifying what sets you apart from your competitors, i.e. why you are the better choice

To be successful with the above process, you should look at your current customer base and choose a specific demographic to target. Once you have identified your target buyer, the most important part of developing a value proposition is to understand their problem, how your product solves it, and what benefits your product or service gives customers. To do this, you should make a detailed list of all benefits your product/service offers, and identify the value that your product brings to your customer.

Do not stop there - you also need to identify what sets your company apart from the competition. Is your product more effective? Do you deliver results faster? Is your product easier to use? Less expensive? Why should your target customer choose you? 

“We have the best quality”, " our products are quality", " we can guarantee our quality", etc, cannot be enough.

Why is a 'Value Proposition' so important?

If you do not have a powerful value proposition, or cannot articulate your product’s strategy and roadmap in terms of that value proposition, then you are not doing an effective job as a product manager.

A few reasons why it is so important:

1. It helps you focus on the right aspects of your business. Remember the faster, better, cheaper rule? You can only compete on some things, not everything. A clear value proposition can act as a basis for deciding what to focus on.

2. It can help you develop the right marketing strategy. That is consistent with your value proposition. This is important because marketing and promotional activities can be an extension of your value proposition. So you are extending the message because you cannot tell everything in your value proposition statement, but if you know what’s important to you you will continue to focus on that and mention that in your marketing.

3. Understand who you are in the market and how people see you. If you did your research, used your customer’s words and emotions to arrive at your unique value proposition, then that is a statement based on what people actually think of you and expect from you.

That is important because if you don’t know how people see you, you might talk to them in a way that doesn’t appeal to their interests.

4. It can also help “sell” the company to new hires. As well as retain and motivate existing employees. This is what’s referred to as “employee value proposition“.

A Value Proposition has four essential elements:

It shows how products/services create value for a specific customer segment

Why a value proposition is fundamental to a product’s success

First of all, one legitimate way to think about a product manager’s role, is as the person in the company responsible for developing his/her product’s value proposition and then communicating that value proposition both internally and externally. This is one of the most important aspects of a product manager’s job. If he/she does not have a succinct, customer-centric way of articulating how the product(s) will benefit customers, then who will?

Indeed, when you think about many of the other things a product manager does — gather market intelligence, develop customer personas, solicit user feedback — the reason behind all of these tasks is to help determine a compelling value proposition. Without that value proposition — without a clear explanation of how the product will deliver value — how will the product manager have any strategic basis for what to build?

A strong value proposition will serve as a strategic guidepost for you throughout the development of your product. It’s a simple strategic reminder about your product that you can and should refer to often, particularly whenever a tough decision presents itself.

For example, if someone wants to prioritise a feature on your backlog that’s not slated for development right away, you can ask yourself: Will this serve and support our value proposition?

It helps the rest of your organisation make better-informed decisions about the product.

It’s also a good idea to make sure your value proposition is always visible to all of the other teams who are working on your product. This includes your development team, your sales team, your marketing department, your support staff, and even your company executives.

When these other groups have your product’s value proposition front and centre, they are more likely to make decisions about the product that serve and supports that value proposition.

It ultimately leads to a better product.

Rarely, will you enjoy a setback-free development cycle, where everyone involved in bringing your product to market is able to work uninterrupted — with no competing projects, budget issues or resource constraints to slow things down or force you to adjust course. These setbacks always come up.

Without a value proposition close by — without a simple statement to remind you why you are developing this product in this way — you might have to make difficult decisions about how to adjust course according to gut instinct, a coin toss or some other non-strategic methodology.

But by having your value proposition as a reference, you will be in a better position to make the right strategic decisions when you course-correct in the face of these inevitable setbacks and challenges.

How to Translate Your Value Proposition to the Product Roadmap:

If you cannot communicate your product roadmap in terms of your value proposition, then you have an ineffective product roadmap.

“A roadmap is a strategic-level blueprint for converting your value proposition into a product.”

Yet many product managers think of their roadmaps simply as lists of planned product features, fixes and other initiatives. Those features might be valuable, even necessary, to the development of the product you and your stakeholders envision. But the question you need to answer as you develop your roadmap is “why?” A feature is important only to the extent that it can create value for your customers.

You will want to think about your roadmap from a customer-value standpoint — not from a focus on the features that you will be building into the product, but why you will be doing so, and whether or not that answer serves your value proposition.

An illustration of how this process might work.

If your value proposition for your next software release for example is to make it easier for your customers to get their jobs done using your tool(s). For each feature competing for limited space and resources on your roadmap, you need to ask yourself whether it will serve and support that value proposition.

Now you are reviewing a list of features and stories to determine what will make it into the product roadmap, and you come to a set of patches that will allow your mobile application to run on several different devices, which it is currently incompatible with.

Intuitively you would think that yes, you should include these initiatives on the roadmap — and perhaps even prioritise them — because they will allow for broader adoption of your application.

But first you do a few minutes of research on the data you have gathered on your customer personas — which includes the devices they are commonly using. Turns out that a small percentage of them currently use unsupported mobile devices.

Your best value proposition is not about what you do or the products/services you sell, but articulate a highly valued outcome the customer desires as it contributes to the business results or the corporate strategy of the customer. 

Great Examples to Take Inspiration From:

A number of businesses which have done a fantastic job of creating value propositions that clearly state the precise benefits a customer is going to derive from choosing them.

Some companies, and their corresponding value propositions:

Apple - Value proposition: ”The experience IS the product.“

Their value proposition is made evident by statements like, “There’s nothing quite like the iPhone,” and “That, above all, a phone should be absolutely simple, beautiful, and magical to use,” and a presentation of unique features, such as Touch ID.

Lyft - Value proposition: “Rides in minutes, whenever you need one.”

Lyft does not leave you hanging in making it clear why you should choose their company - rides are available in minutes. This message is developed not only by this very direct statement, but also by the step-by-step images of the Lyft experience, and a bulleted list of benefits (happy drivers, happy riders, and “serious about safety”).

Product: On-demand car service.

Target market: People who need a simple method for getting from “point A” to “point B”.

Primary benefit: Immediate response.

What makes it unique? Lyft focuses on providing local service without any delays.

Uber - Value proposition: “Get there: Your day belongs to you”

Product: Low-cost taxi service.

Target market: People who need low-cost, on-demand transportation.

Primary benefit: Eliminates the frustrations of travel.

What makes it unique? The proposition focuses on the needs of the customer by using the word “you.”

Digit - Value proposition: “You can save money without even trying.”

For most people, it doesn’t get much better than that - who wouldn’t want to have more money in their pocket without even thinking about it? Digit perpetuates this message by highlighting that everything about its use is automated, so users don’t have to do anything to benefit, and by including a very succinct to the point video on their homepage.

Spotify: “Music for Everyone”

Product: Online streaming music.

Target market: Families and single people alike.

Primary benefit: Music on the go.

What makes it unique? Moms, dads, kids, singles… there’s music to suit everyone’s tastes, all in one app.

Pinterest: “The World’s Catalog of Ideas”

Product: Access to ideas and inspiration.

Target market: Creatives, DIYers, women planning their wedding or looking for a masterpiece to cook tonight.

Primary benefit: Ability to find something beautiful to create.

What makes this value proposition unique? Emphasizes the vast depth and size of the platform.

Salesforce: “Connect to Your Customers in a Whole New Way

Product: CRM solution.

Target market: Business owners and marketers.

Primary benefit: Easy-to-use CRM solution without compromise.

What makes this value proposition unique? Focuses on building a deeper relationship with your customers.

LegalShield: “Worry Less. Live More.”

Product: Legal protection.

Target market: Individuals and small businesses.

Primary benefit: Legal protection you can trust to be there whenever you need it.

What makes it unique? It takes the stress out of legal situations.

Once you have finalised your product’s value proposition, you should use it to inform each decision about what to include on your roadmap at what priority level, and to articulate these decisions in terms of how they will bring value to the customer. If you want to make more of a mark on your industry and be a force to be reckoned with, you need a strong value proposition.

Some of the benefits you can expect when you create a clear, compelling value proposition for your brand

• Potential customers can quickly understand what your company has to offer: Most customers already know what they are looking for when they research. So, if it’s not immediately clear that your company can meet their needs, they will likely look elsewhere.
• Creates a strong differential between you and your competitors: Almost regardless of what you do, you have competitors. An effective value proposition tells the ideal customer why they should buy from you and not from the competition. In other words, it provides your company with a unique differentiation.
• Attracts the right prospects and increases not only the quantity but the quality of prospective leads: A company’s value proposition targets your company’s ideal customer and explains why your solution is the best option. This increases your chances of attracting the right prospects for your business and finding higher quality leads that are more likely to convert to customers.
• Improves customer understanding and engagement: A powerful value proposition helps your customers truly understand the value of your company’s products and services. It also helps your ideal customers to see how your services benefit them and are their best available option. With this increased understanding, customers are more likely to become engaged with the services or products you offer.

Provides clarity of messaging: A strong value proposition makes it immediately clear to your customers what you offer. Additionally, it also makes sure to communicate your message clearly.

In Conclusion

A quality value proposition is clear, easy to understand, and communicates the specific results a customer will get. It also must explain how the product or brand is different and better than competing ways to solve the same problem (i.e. competitors, legacy processes).

In a nutshell, a value proposition is a clear statement that

• explains how your product solves customers’ problems or improves their situation (relevancy),
• delivers specific benefits (quantified value),
• tells the ideal customer why they should buy from you and not from the competition (unique differentiation).

Nailing these criteria helps to create an effective foundation for all sales and marketing efforts, and it can also provide a useful compass for guiding any future messaging.

There are literally millions of companies in the world, and likely tens of thousands that do something similar to your company. How do you stand apart from these competitors? How do you clearly articulate the value that you can provide?

Strong value propositions deliver results: increased revenue, faster time to market, decreased costs, improved productivity, increased market share or improved customer retention levels. When prospects realise value from your products and services, you increase sales, generate quality leads and strengthen customer loyalty.

Developing a compelling value proposition should be one of the first steps in whatever process companies decide to implement. It is an important tool in ultimately capturing your first customer. The point is to make use of that tool to engage potential customers and remove some of the uncertainty under which startups operate.

Brands have crafted such unique, compelling Value Propositions for many a dull product/service. What would each brand do in your industry? And what’s stopping you from doing the same?

Value propositions have enormous potential to help your business attract customers, but only when they are written effectively.

This is far easier said than done, as developing a value proposition can be extremely challenging.

A Value Proposition by itself is not enough. You need to have a complete value delivery system to ensure your organisation is delivering that value to your customers.

Credit: Andre Theus, P.M.

Credit: Infographics - Jeff Desjardins

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