Value proposition gives you the reason why you should buy a product. It is the promise made by the company that builds the product and is the main purpose for which a customer should buy the product.
What is a value proposition?
A product solves a pain point of the target customer segment. The value proposition of a product is the end output that the customers get after using the product. It defines what is the end benefit that would be availed by the customers.
Features are not value propositions!
There is often confusion between the features of a product and the value proposition. Features are the means by which the benefit is delivered to the customers. The value proposition is the benefit itself.
Consider the example of WhatsApp.
The value proposition i.e. the benefit delivered by Whatsapp is easy communication. To deliver this benefit, it has different features like adding photos, videos, status, communicating in groups, and so on. But the value underlying all the features is only one – easy communication.
How do you define a value proposition?
Defining the value proposition is important, as it conveys a clear message to the customers regarding the output that the product is going to deliver. A well-crafted value proposition is crucial for effective marketing.
Things to know before defining a value proposition
- Customers – Before anything, you should know who your customer is, in as much detail as possible. Narrow them down to the finest of segments. It can be based on individual or a combination of, but not limited to, industry, age, geography, gender, habits, etc. Knowing your customers keeps you focused.
- Pain point – What is the pain point of your customer? How intensely are they currently facing this issue? What are the present ways in which they are tackling this issue? This is The most important thing to know which will help you in building your product, and hence the value proposition.
- Cost-benefit analysis – When a customer is purchasing a product from you, he is going to measure it against the benefit that he is receiving versus the cost he is paying for the product. So you should know the cost-benefit analysis before presenting your value proposition.
- Know your competitors – There will always be direct or indirect competition for your product. Knowing your competitors will help you position better in the market.
Defining your value proposition
A strong value proposition is always customer-centric and defines how they are benefitting good from your product.
- Identify the main value of the product – Though there can be a number of potential benefits, list the one that is the most cared about by customers. Eg; “Increase your sales”.
- Identify your differentiator – List what differentiates you from the competition. This would give you an edge over others and provide a unique positioning in the market.
- Quantification – Add quantified data to the value proposition, so that it is easily understandable by your customers. Eg; “Increase your sales by 20%”.
- Craft a clear statement – After assessing the above points, craft a clear statement based on the learnings so that is is effectively communicated to the customers. Strong value propositions have crystal clarity about the benefit that would be gained by the user.
- Amplify – After crafting the value proposition, add it to all the possible customer-facing mediums to convey the message. It can be your website, brochures, presentations, advertisements, etc. Adding it to multiple places reinforces the proposition to your customers.
Characteristics of an effective value proposition
A successful value proposition includes –
1. Clarity of the benefit to the customer
2. Quantification of the benefit
3. Relevant to the customer segment
4. Removes any confusion from the customer
5. Resonates with the customer’s needs
6. Speaks the customer’s language
The value proposition is an iterative process. After crafting, it has to be tested continuously among the target customer segment. As mentioned, it should resonate with the customer’s pain point and should have the customer’s language. You should always keep close monitoring on how it is performing among the customers, and based upon the feedback changes should be made.
Leave a Reply