Create a compelling point of difference
What makes customers buy or use your services? This fundamental question is the driving force behind every aspect of your marketing strategy – from acquiring new customers through referral programs or advertising, to retaining your existing customers by consistently meeting – and exceeding – their expectations.
A value proposition is a short statement that clearly explains the benefits your customers experience when they do business with you. It's not a catchy slogan (although it can be turned into one, if that's important to you). It's not a mission statement or long list of capabilities. It can be a few bullet points and it can be visual.
So why do some businesses find it so hard to articulate what their value proposition is?
"The key word to focus on is value", says Charryse Scarpignato, Head of Marketing, Macquarie Business Banking. "What do customers and potential customers value about you? How do you add value to their business and how do you meet their needs?"
The best way to find out is to ask, but position the question from their perspective. Ask them ‘What do you feel you've been able to accomplish from working with my company?'
Ask your staff what they think makes your business distinctive and what is that point of difference.
The key word to focus on is value. What do customers and potential customers value about you? How do you add value to their business – how do you solve their problems?
What can a value proposition do for you?
Think of your value proposition as a succinct elevator pitch.
"A good value proposition is a conversation starter, a chance to engage with new clients," says Scarpignato. "It should ultimately result in a question to them, such as ‘how do you do that?', and then you can talk more about your firm's strengths."
It also helps you to articulate the key message you want your referral partners to understand, so they can help you attract more customers through their network.
In addition, it can also help you to develop a strong culture within your business, connecting all staff to a commonly held belief. It sets service standards, highlights training gaps and can help you to identify whether new hires are the right fit.
Six measures of a strong value proposition
- Does it resonate with your target market? Does it tap into their needs? Think about how you solve problems for your customers. It could be helping them to sell more, save time and money, and manage risk. Think benefits, not features
- Is it clear, simple and succinct? If it's not memorable, or if it's full of business jargon, it's not going to get you far
- Does it really set you apart? Too many value propositions cover bare minimum expectations, such as honesty or good service. Don't just repeat what everyone else in your industry says – set your sights higher
- Does it sound good when you say it out loud? Saying it out loud is a good test if you're not sure about the first point
- Could it trigger a conversation? Your value proposition is just the starting point – you want to encourage people to want to know more
- Is it true? There's no point in defining a value proposition you can't deliver on. If you're not the fastest, cheapest or safest, don't make that claim. If your staff don't believe in it or you can't hold them accountable to it – you're likely to fall short of expectations.
Given the increasingly rapid changes in customer expectations and the competitor landscape, it's important to review your value proposition regularly as part of your business planning. It's also a good idea to check in with your customers, to see if you are actually meeting those priorities.
"By spending some time thinking about what your clients want, you can open up a new future for the business," says Scarpignato. "It lets you identify new services, locations or specialisations before your competitors. And that could help you determine a smarter path to growth."
Your value proposition checklist
- Does it resonate with your target market?
- Is it clear, simple and succinct?
- Does it really set you apart?
- Does it sound good when you say it out loud?
- Could it trigger a conversation?
- Is it true?