Over the last year on different social platforms there's been a lot of chatter of the term value proposition. While I'm pleased with the level of conversation, I'm still noticing a gap in sales professionals or entrepreneurs really understanding exactly what their value proposition is, how to identify it via their product or services and then communicating it to their existing or potential customers.
Because of this, they are always battling customers with price discounts, not being able to differentiate themselves from the competition, working harder to gain customer awareness, etc. This article will help you identify what your value proposition is based on your product, service or solution so that you can better communicate it to your customers.
Your value proposition is not you mission or vision statement - Lyndon
Before I go deeper into what a value proposition is, let me first start with this statement. Far to ofter when I ask people to write down their value proposition, they quote their mission or vision statement 🤦🏽♂️.
Mission and vision statements centers around you and your company and its direction. However, your value proposition focuses on the customer and how do you support them in achieving their goals and objectives.
So with that being said, what is a value proposition?
Value Proposition Definition: "The end benefit a customer receives after purchasing your product, service of solution" Lyndon
From the definition above we can see a clear difference between a value proposition and a mission statement because it's more customer focused. The products or services you offer supports the customer in different ways.
It's the identifying of these different ways, where I think people have the most trouble with and by extension communicating to their customers in their sales pitch, proposal, talk track, presentations, etc.
5 Value Proposition Categories
All products, services or solutions offer five (5) or a combination of the following five categories;
Solutions/services that help customers improve in their output or reduces the amount of time in getting things done or just helps them get things done are solutions with a productivity value proposition.
A good industry that represents this is the technology industry, most tech solutions offer users the ability to get more done and in a shorter space of time. Another good example is the simple role of a car wash. This service provider takes up the task of washing the car for you, while you get the opportunity to use that time for something else.
Productivity is a key value add for any customer and once it's identified that this is important to the customers it should be used to leverage or peek their interest.
"We help you save" - General statement
Have you ever seen or heard the above statement anywhere? As simple as it seems it's a value proposition statement.
Any solution that helps a client improve in a monetary way is a solution of profitability. But it does not just have to be banks and insurance companies that offer profitable value solutions.
Service/solution providers that help customer reduce cost that impacts their bottom also fall into the value proposition category. If we look at customers that purchase equipment like lawn mowers, weed wakers, etc. for the purpose of generating revenue then this falls into the profitability side of your value proposition offering.
Image is always an interesting component in the value proposition offering. A companies's image is important in how their customers (current/future) see them. That image, however, should not always be looked at from the an esthetics standpoint.
Let's continue with the previous example of the lawn mower. It was stated that the customer purchased the lawn mower to provide a service to his customers. At some point that lawn mower will require a service. If, the service provider of the lawn mower defaults in their ability to service the equipment in a timely manner, then that affects the customers ability to service his customers.
This affects his credibility and of course his image as a service provider even if he was not immediately responsible for the delay. Customers will cancel and take their business elsewhere.
Notice how image due to poor service delivery also affect your customer's productivity and profitability.
"My experience with them wasn't very good" - said the customer
The experience factor in the value proposition offering is sometimes over looked. Customers guage/measure their willingness to continue doing business with an organisation based on the experience they got while interacting with that service provider or the experience while using the item.
The experience factor of the value proposition is measured at the end of any interaction. A customers experience while while calling into your company to ask about a product/service can be the determining factor in them continuing business with you or starting a new relationship.
Notice as well, that this "experience" can positively of negatively affect the "image" aspect of the value proposition which also affects profitability.
Customers want C.A.S.H
Convenience in the value proposition offering is easily summed up as the customer's "ease of doing business" with you. This to me is one of the most important components in the five categories.
The reason I say that is because convenience looks at the entire business model. From the customer being able to research or find your website to making a call to enquire all the way to when they pay for your product or service. The convenience component in your value proposition really factors a lot on the buyers journey.
Customers are looking for cash, but not in the true sense of the word. They are looking for a service that is a) Convenient b) Actionable c) Speedy and d) Hassle-Free. If we look at all of these four factors from the standpoint of your business what does that look like for the customer.
It's important to note that this links back to the customer experience, which has links to the other value proposition factors.
In closing, having a clear understanding of what you offer and how your team (sales & marketing) communicates that to customers is important. Without this understanding, your offering will not be attractive making business harder to attain/attract business.