Today’s markets are fierce. Obvious correct? Whether you are a manufacture, service provider or somewhere in between, it seems the market continues to get more competitive by the day. Companies large and small are forced to compete outside of their traditional areas in an effort to grow and protect their customers from competitors. Over the last several years, most companies have seen greater competition in their market space and as a result have had to change the way they do business to survive by either fixing the gaps in their business or responding to their customer demands. Recently, leading brands such as Nestle, Kraft and Johnson & Johnson have all announced changes in their business in response to the new demands of the marketplace.
Value Propositions tend to be used as a generic term for why customers should buy from you, which can be okay depending on your business. In general, a company value proposition is essentially your promise to your customers in exchange for something of value. Hopefully money. In most small to medium sized companies, the value propositions you have for your business as a whole does not look very different from your product value propositions. What this means is one or two value propositions truly define your business because of the size and scope. The good news for small to medium sized companies is that separate value propositions for your products and company may not be required for success. For larger companies, product category focus will determine if unique value propositions are required which is different from your overall company proposition. As an example, a manufacture of bearings will have a differentiated value proposition for the product which may relate to the performance, life expectancy, installation or warranty to name a few than the overall company. For a smaller firm whose offering is what defines their business such as a local restaurant with a few locations, the offering of good, fast food at a value price will define the business as a whole.
When looking at your value propositions for your business, here are our top 5 must haves for today’s businesses.
- Accuracy: This is at the top of our list for obvious reasons. Your value propositions should be accurate in their claims to your customers. After all this is your promise to your customers and breaking that promise with claims that are stretched will most likely send your customers to the social media outlets to tell the world how you are not living up to your promise. If your company value is unparalleled service, then providing exceptional service should be in the company DNA. As a result, customer feedback scores should be higher than the industry or local average etc. If the product outperforms all others in lower noise output, use comparison test data to support your claim. Accuracy in your value proposition statements will go a long way in winning the trust with your current and future customers.
- Uniqueness: What is unique about your offering? With the market being as highly competitive as it is, having uniqueness in your offering is required today. This does not mean that every aspect of every product must be unique. It means focus on the aspects of your product or service that is unique. An air purification system which can eliminate 25 of the most common air pollutants and VOC may not be that unique any longer. If your system can accomplish that in less than 10 minutes in the average size room with a unit half the size of competitors, then your value proposition should focus on these unique features.
- Differentiation: Find the differentiation your customer’s value. Using the example above, creating differentiation of your air purification system that is square vs. round may provide little value to your customers if the value is really in how much air it can purify in an hour, regardless of the shape. The differentiation in the value propositions should always have meaningful value to your customers. What do they gain as a result of this feature or service? Better performance, faster service, more free time for themselves? With a long list of value you can provide your customers, focus on those that make a difference to your customers and tell your potential customers in easy to understand statements or examples.
- Simplicity: In today’s market place, a simple, easy to understand value proposition is a must have to gain the attention of your target customers. When creating your value propositions, continue to further refine the message to your customers as you get feedback. This process may take a few attempts to get it to resonate with your customers, however, keep striving for a value proposition as simple as you can make it. Don’t be afraid to be creative here. You can use diagrams and graphs instead of text to get your point across, plus it makes sharing your story on social media outlets that much more interesting and effective.
- Customer Focused: This typically seems obvious, but often gets missed by companies who have been around for a while and may have lost touch with what their customers really value. Your value propositions should be focused squarely on your existing and target market. Talking to your customers on a regular basis and asking specifically what they value is key to making sure your products and company meets your their needs. To capture share from your competitors, talk to their customers and determine what they value vs. what you are providing.
Below are some simple value proposition examples and a template which can be used as a guideline.
Excluding taglines for ad and websites, avoid vague statements in conversations with your customers such as:
Our technicians are the best trained in the market.
Our product is the longest lasting on the market.
Our product is the only one which provides this feature.
We are the largest provider in the Midwest.
We have the highest quality.
Instead try the following:
Each technician receives over 20 hours of advanced training per year on the latest techniques
and troubleshooting methods to ensure quick resolution.
Our product lasted 30% longer based on independent testing in 2015 saving on average $50 per
Our proprietary feature X allows our customers to complete their jobs on average 20% faster.
With our team of dedicated professionals, we have the resources to efficiently get the job done
right the first time.
Below is a template that can be used to map out the key points of your Value Proposition. Create a statement for each heading and incorporate into the final Value Proposition. We use Microsoft Excel as it is easy to populate the fields and edit later. Feel free to modify as you need. We found that keeping it simple and concise works best for most situations.
Product Name: MaxAire 1500 Air Purification System
Feature: Digital Filter Life Indicator
Customer Gain: System indicates when air cleaning is reduced
Customer Pain: Pollutants unknowingly stay in the air with dirty filters.
Value Proposition Statement: Our unique Digital Filter Indicator warns customers when the filter is
reaching the end of its life and needs to be replaced ensuring harmful
pollutants are always removed from the home.
The area where we spend most of the time is on the Customer Gain and Pain sections. Getting to the true outcome statements may require a visit or phone call to some customers. Don't be shy. Ask the tough questions, even if you are afraid of the answer. It will provide dividends in the future when you truly know what your customer values. Conversely, if you make assumptions for your Pains/Gains it can have an impact on the effectiveness of your Value Propositions. Remember, always give your customer a reason to believe in your company and products.
Does your company’s value propositions exhibit some or all of these attributes? If not, it may be time to make an adjustment to improve your message to the market. Being a leader in your market requires that the value provided to your customers is always relevant.