Value Proposition

NEEDS

We all have needs to fulfil, but some are more important than others. The greater the need, the more likely we are to search for a solution and what it is worth to us

VALUES

The balance between cost and benefit is the crux of the buying decision making process. If we believe a product will deliver benefits that outweigh the costs, we are more likely to buy

The perfect value proposition

Perception is key

Consumer decision making is based on an exchange of values, where a customer gets something they want in exchange for something that you want. In most cases this is a product or service that the customer values in return for money, but in all cases, the perception of the value of the product or service is based on how much the customer feels they will benefit from the exchange.

Be Customer focused

It is essential therefore for you to understand and communicate how the customer will benefit from the transaction, your value proposition. This is not what you do, it is the outcomes in relation to the goals, benefits and solutions that the customer is seeking.

Clear communications

If your saves the customer money, you need to communicate how much money the customer is likely to save, not what you do to save them money. To communicate your value proposition may require you to offer examples that set an expectation in the mind of the consumer along with social proof.

Key areas

What is the need I am trying to fulfil

Customers buy solutions not products, so you need to fully understand what benefit the customer is looking for. Added value features are fine, but only of you fully address the underlying problem first.

Who am I competing with?

Your competition is any other possible solution. For example, Coke views it’s biggest competitor to be Water not Pepsi, as this is the cheapest and most effective way for consumers to fulfil their need. Think like your customer, and consider how you compare with other value propositions, including not solving the problem, which is always an option

What is the benefit

Seeing your value proposition in the context of the problem will let you understand the value that it provides, and help you communicate its benefits more clearly to the consumer. It will also help you avoid costly feature creep, where you’re adding cost that delivers no value to the consumer.

Be prepared to pivot

Focussing on the benefit and the value you deliver means you’re flexible in how you approach your value proposition. This will help you pivot when your product is not accepted in the market place.

How am I going to charge?

Your pricing strategy should match the value it delivers. If the customer is going to gain long term benefits then a service based price may be relevant. However, if it's a one off solution, consumers are unlikely to commit long term, no matter how much you think it will benefit your business.

How am I going to deliver the benefit

A complex delivery or sales cycle can add costs to a product that outweigh its benefits. Similarly, a high priced product needs to have a sales channel that supports the price point and helps to justify the value in the mind of the consumer.

Trust and evidence

The value proposition relies on the consumers belief that the product will be worth the money, so you need to ver come this barrier, either by offering a low risk offering or by providing supporting evidence such as case studies or testimonials

Example

In my business, the customer is seeking advice, guidance and access to skills that they don't have in the business. The benefit is assistance in understanding how to create a marketing and sales strategy which will grow their business. Many small business owners have worked with agencies in the past and found the process to be frustrating. They have seen adwords campaigns generate a lot of cost but little traffic, invested in SEO with no tactical response or create a lot of content with no lead generation. Much of this is because the tactics drove the strategy rather than being part of a consistent and integrated plan. By working with me the customer creates a plan that they are in control of. they understand why each step is being taken, how it will benefit them and influence their customer and how to measure and improve the plan as we go along. Most importantly, as they have been at the heart of the planning process they feel confident in its potential outcomes, that it is relevant to their business and that they are not dependent on a third party to do expensive work to make the most of the plan.