As Chris Guillebeau asserts in The $100 Startup, “a business ultimately succeeds because of the value it provides its end users, customers, or clients.”
Your value proposition is the backbone of your company. You may have the best product or service out there—but if you don’t have a unique value proposition, your conversions are likely to suffer tremendously.
Despite its undeniable importance, the majority (54%) of companies don’t do anything to optimize their value propositions. Shocking, right?
The good news is that we can help you to not be a part of that statistic. Read on to find out how.
So What Is a Value Proposition Exactly?
First things first, let’s define what a value proposition is, so there is no confusion. According to Investopedia, a value proposition is “a business or marketing statement that a company uses to summarize why a consumer should buy a product or use a service. This statement convinces a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.”
In sum, a value proposition does the following:
- Describes the problems solved by your product or service
- Explains the benefits derived from your product or service
- Spells out how it differs from the competition
Just to clarify, a value proposition is not a slogan or a catchphrase. Think of the world-famous McDonald’s slogan, “I’m lovin’ it.” While catchy, it does nothing to inform us of McDonald’s value, does it?
What Are the Steps to Creating a Value Proposition?
1. Define the Benefits (and Be Specific)
List the precise benefits of your product or service. What kind of problem does it solve? Why should people want to spend money on it? Be as specific as possible.
2. Define Your Buyer Persona
From there, you will want to define your buyer persona. Consider demographics, income, family size, age, gender, hobbies…every characteristic you can possibly think of that would fit your target.
What are the needs and desires of your buyer persona? Keep in mind that sometimes people don’t even know what they want. Everyone was perfectly happy with flip phones until Apple created the touch screen phone. Before long, touch screens became ubiquitous, and now, many people can’t live without them.
Also understand the emotional needs of your target. As Guillebeau claims, “value relates to emotional needs. Many business owners talk about their work in terms of the features it offers, but it’s much more powerful to talk about the benefits customers receive. A feature is descriptive; a benefit is emotional.”
For instance, a feature of Spotify is the limitless database of music it provides its listeners. A benefit would be: listen to your favorite tunes while relaxing or hanging out with friends. See the difference? Be sure that your value proposition acknowledges your buyer persona’s emotional needs and desires.
3. Differentiate Your Brand
Research your competitors to determine how you stand out. Your product or service won’t be the best at everything—but find at least one thing that really makes your brand different and home in on that. Be sure that it’s something that you can live up to. If your value proposition centers around customer service but for whatever reason, you can’t provide the best customer service, then you will want to rethink your value proposition.
Amazon has differentiated itself by offering massive selections at reasonable price points—and super fast, easy delivery (with the purchase of Amazon Prime). Due to the convenience and low cost, many people now shop for books on Amazon, which has caused bookstores around the country to go out of business.
Barnes and Noble stays in business (for now anyway) by offering a unique value proposition: book-lovers can enjoy a quiet ambiance—over a cup of coffee if they so desire (thanks to the bookstore’s partnership with Starbucks). The second selling point is the value of immediacy that Barnes and Noble offers its customers: as a brick-and-mortar bookstore, people can buy a book right away, instead of waiting several days. The selection may not be as extensive (or cheap) as Amazon, but the combination of a relaxing ambiance and immediacy make for a winning value proposition that has kept Barnes and Noble in business.
However, now that Amazon has started to open brick-and-mortar stores, that value proposition may not suffice for much longer. Barnes and Noble will have to find a way to differentiate itself and provide a unique value that its competitor does not offer.
4. Create Your Value Proposition
Once you have determined the exact benefits of your product or service, the problem it solves and how it stands out from competition, it’s time to create your value proposition.
You’ll want to put your value proposition on the homepage of your website. Start with a headline that states the benefits upfront and makes it clear what the value is, followed by a short paragraph with a more detailed explanation of the benefits. Many brands with successful value propositions also include a short list of bullet points stating the benefits, which can be quickly scanned by the reader and ease readability. All of this can then be accompanied by a video or image to show the value. Keep in mind, however, that the video or photo should be a supplement to your value proposition—don’t rely on that alone to convey your message.
The brand Cloudflare made this mistake. Their homepage shows a video with a headline that reads, “Give us five minutes and we’ll supercharge your website.” Do you know what it means to “supercharge your website”? Because I sure don’t. Since it isn’t stated upfront, the visitor has to watch the video in order to find out what this means. Overall, not a very convincing value proposition. It would have been much more effective if they had explicitly defined the positive results that came from their services.
Lastly, remove all the other clutter and ensure that your value proposition is the very first thing that people see on your homepage.
How Can You Guarantee a Winning Value Proposition?
Go Niche or Go Home
Your value proposition should not appeal to everyone. If it does, you are doing it wrong. It should speak directly to your buyer persona, even calling them out by name.
Slack’s value proposition is “a messaging app for teams.” The rest of that phrase changes depending on when one views the homepage. For instance, it is “a messaging app for teams who see through the Earth!!” Followed by the subheadline, “The IceCube Collaboration is one of tens of thousands of teams around the world using Slack to make their working lives simpler, more pleasant, and more productive.”
Another view of the homepage has a slightly altered version of this value preposition that reads, “a messaging app for teams who are changing the world!!” The subheadline states “charity: water is one of tens of thousands of teams around the world using Slack to make their working lives simpler, more pleasant, and more productive.”
You get the picture. Slack doesn’t try to be a messaging app for everyone. Rather, it differentiates itself by tailoring specifically to business team members—and not just any type of business. It caters primarily to more innovative, smaller and remote-based companies. Slack’s value proposition is that its users can “be less busy.” It claims to facilitate communication and increase productivity for remote-based team members of forward-thinking, world-changing companies—doesn’t get much more niche than that!
The last thing you want to do is confuse your audience with industry-related jargon and ambiguous, convoluted language. Remember that simplicity is often best. Make sure that your value proposition is as straightforward and specific as possible. It should be so clear that within five seconds of reading it, a light bulb will go off and your consumer will understand just what makes your product or service so valuable.
Speak the Language of Your Consumer
Remember that the language you speak with your team will likely differ from the language used by your buyer persona. To ensure that you are speaking the same lingo, interview your target and observe the words that they use. See what kind of vocabulary resonates best with them, and incorporate that language into your value proposition.
Lastly, don’t leave people guessing. If you can, back up your statement with statistics and testimonials. Instead of claiming that your product or service is the best, prove it with numbers and feedback from customers.
Summing It All Up
One last word of advice: Brainstorm as much as possible. If you created a value proposition in half an hour, it’s probably not going to be very effective.
SUCCESS agency CEO, Avin Kline, recommends working with your team and coming up with ideas together. Play devil’s advocate and challenge one another. Aim to get about 50 ideas (not just two or three) on paper, and really work as a team to make sure that what you come up with in the end is valuable to your target, a true differentiator and something that you can live up to.
And at the end of the day, remember that it’s all about clear communication. If you can effectively communicate why your product or service is unique and worth it, your business will be well on the way to success.
Speaking of SUCCESS…if you still feel stuck and need help in crafting your value proposition, our team members are only a phone call away. Schedule a consultation with us and from there, we’d be happy to help you create a compelling value proposition—so you can say hello to conversions and goodbye to bounces.