Regardless of the products or services manufactured, there is always competition among companies. What makes a client choose one company among many similar ones? The answer lies in the best value proposition. Marketers use it to show why this particular company is better than competitors. They also try to attract the attention of more customers to their company. For a business model, value proposition is critical. You can create a product of the best quality, an excellent presentation, the most amazing price, but the client will not know about it if they do not inform him.
What is a value proposition?
Start by defining the term. There are many descriptions of it, but one of the best explanations for the concept of value proposition belongs to entrepreneur Michael Skok. He believes that this statement, which explains what benefit the product or service can provide, as well as who it is intended for. A value proposition is a short statement that describes the portrait of the target audience, the consumer’s problem that the product will help to cope with, why it is clearly better than the alternative options. The key to this definition is the word "unequivocally." A convincing value proposition is a promise designed to show how different the brand is from competitors, why the target audience should choose it instead of the rest. You also need to make sure that it is expressed in only one sentence or phrase. If marketers cannot achieve this, a significant flaw will appear in brand positioning.
Suggestion Options
Let's look at a few examples of value propositions to understand what is at stake. For example, for a company that creates toolkits that allow businesses to manage online payments, business owners will be the target market. The main advantage and unique offer for the product is the simplicity and transparency of payments. Therefore, when developing a value proposition, it is necessary to focus on the ease of use of tools. The phrase may sound like this: "A clear tool to help business owners easily manage online payments."
Another option is a taxi service. The target audience of this company is people who need to get from point “A” to point “B”. The main advantage may be the immediate response of the operator. The emphasis in developing a value proposition for such a company must be done on saving the client time. Therefore, it may sound like: "We’ll take you to the place in minutes." Another example is the mass market, aimed at frugal customers. The main advantage of the company is that it offers its customers quality products for little money. At the same time, prices in the store are lower than those of competitors. Therefore, you can focus on the quality and cost of the product. We compose a value proposition template based on these criteria. It may be: "Get more for less."
How to write a unique offer
Now consider a few tips for writing your own value proposition. The first thing to start is the development and creation of a special template. A special design for an ideal value proposition was developed by the Swiss business management theorist Alexander Osterwalder. Its design is designed to develop the products that customers really expect. The Osterwalder value proposition development model has become one of the most widely used. The theorist has developed a template that focuses on the client and his requirements. Using this template, you can define the main determinants in a value proposition.
Business questions for model building
When compiling a template, you need to answer how many questions about the product and the client:
- What does your product do?
- What does the customer feel when using your product?
- How does your product work?
- What features does it have?
- What are the emotional shopping drivers?
- What are the problems and hidden needs of the client?
- What are rational shopping drivers?
- What are the client’s risks when switching to your product?
As a result, a template will appear describing the product and customer needs. This structure is very similar to a business model template and is a simple visual basis for brainstorming before creating a value proposition model. It will help to find out why the client needs a supplier, what the client can perceive as additional value, what he considers annoying or disadvantageous.
Advantages of the Osterwalder Model
The value of the model lies in the fact that it allows you to understand exactly what customers want, and visualizes products and services that perfectly match their needs. Osterwalder’s value proposition collects customer information in a single structure and helps to find compliance with their needs and requirements. This makes it possible to design a more efficient business model. This ultimately leads to profitability. At the same time, time will not be wasted on developing ideas that may not interest customers.
Additional customer value
When developing new business models, as well as before creating a value proposition, organizations tend to focus on internal problems and tend to forget about the needs of their customers. Anyone can think of good and creative ideas, but the main goal is to create additional value for the client that he can feel. Using the value proposition model, organizations identify needs in a clear and structured way, as a result of which they are able to develop a template that will reflect the requirements of customers. At the same time, they get a profitable business model both for themselves and for their customers.
Understanding Customer Problems
Using a value proposition, companies get the opportunity to understand what customers really want, to see the problems that they experience. With this knowledge, you can understand how customer needs can be met. If you express all this in a structured and visual form, it immediately becomes clear what aspects and features of the product or service require adjustment to meet the requirements. In order to correctly apply the value proposition model, it is important to have a clear understanding of customer requirements.
The client’s problem is that it gives him trouble, annoys him. It is also what he perceives as something negative. These are unpleasant side effects, such as rising costs, high risks, decreased sales, fierce competition, negative emotions and atmosphere. But not all problems are perceived by consumers as equally important. This must be taken into account.
Client Objectives and Benefits
Tasks - this is what the client wants to do, but can’t do it himself. A company needs to know if their products or services meet these goals. There may be several tasks that a product can solve. Benefits - this is a positive result from the use of the product that the client wants to receive. It is about customer expectations that need to be surpassed in order to get around competitors. For example, cost savings, user friendliness, quality service and a pleasant working environment.
Market research
The company can obtain information about the needs of customers in the process of negotiations with them or by analyzing the market for their products. By writing down answers, classifying and setting priorities, marketers get a clear picture of how the company can serve its customers in the best way. The most important elements will then form the basis of a new product or service. By providing them, it is important to manage the client’s greatest pain.
Testing Offers
With a careful study of customer problems and options for resolving them, the chances of failure with the product are minimal. But at the initial stage, testing will still be needed. The creator of the product is faced with the task of conducting a final check. The created proposal will need to be tested at an early stage so that adjustments can be made in a timely manner. It may happen that customer requirements are misunderstood or misinterpreted. Therefore, a value proposition must be put into practice. It is important to always test it together with the client so that you can determine whether it really works and meets the requirements. The company conducts a phased assessment of the correctness of previous assumptions and interpretations. After all, it is the client who determines whether this value proposition is attractive to him. You must always remember that it is for the client that the product is created.
Jeffrey Moore Ready Template
You can successfully use ready-made options for constructing a value proposition. For example, in Jeffrey Moore’s book “Bridging the Abyss. How to bring a technological product to the mass market "the following template is proposed:" For [target customer], which [statement of necessity or opportunity], our [name of product / service] [Product category], which [statement of benefit] ". Example: “For marketers who are trying to increase ROI on social media, our product is a web analytics software that translates engagement metrics into effective revenue metrics.”
Variant of Steve Blanca and the slogan Venture Hacks
Another option for the proposal was called XYZ. It was invented by Steve Blank. His template is: "We help X make Y by making Z." Example: “We help parents spend more time with their children by providing convenient playgrounds.” The Venture Hacks tagline is a value proposition template that is used by businesses already existing in your industry to create their own unique value: “[A proven industry example] for / from [new field]”. Example: "Flickr for video."
Template for offers from Eric Sink.
Value suggestion expert Eric Sink says that the main idea is to identify the following points in a few sentences:
- Why does the customer need this product.
- What a product it is.
- Who needs it.
Example: "The simplest OS for laptops."
Template by David Cowan
This specialist suggests highlighting the scale of the task that your company is solving. Tell people what your company offers them. Next, complete this with one simple sentence. For example, report that in the world every 62 minutes a person dies of melanoma. The sentence may sound like this: “We offer an iPhone application that allows you to independently diagnose skin conditions.”
Template "Client-Problem-Solution"
Brent Cooper and Patrick Vlaskowitz in the book “Startup Around the Client. How to build a business right from the very beginning ”suggested using what they call the“ Client-Problem-Solution ”template:“ Customer: [who is your target audience] Problem: [what problem do you solve for the client] Solution: [what is your solution to the problem ].
Elevator Ride by Dave McClure
Founder of the California Startups 500 Fund and Accelerator, Dave McClure, offers a three-step checklist for writing his own unique value proposition. In its interpretation, this is an understandable, simple, catchy slogan from short phrases that contains the answer to three key questions: what, how, why. Example: “Our product is a program that reduces costs by saving time.”
Employer Value Proposition
Another area where this proposal applies is the hiring of employees. It reveals how the labor market and employees perceive the privileges that they receive by working in this organization.
In total, five components of the employer's value proposition are distinguished:
- Opportunities. It includes the conditions for the development of the organization and career growth of employees.
- Human. It is a team and corporate culture.
- Organization. It combines the company's position in the market, the quality of its products or services, and social responsibility.
- Work. Includes premium part, convenient schedule, working conditions.
- Reward. This includes payment for labor, as well as the social part, for example, sick leave and leave.
There is a problem with the fact that some of the value propositions compiled contain incorrect attributes or do not differ at all from competitors, while others actually show a significant gap between the promise and what the client receives. This leads to a decrease in employee liabilities. But it is important to understand that a strong and competitive value proposition can attract talented employees and increase their involvement in the company’s business.