Understanding Your Value Proposition
Nothing is more important for a business than answering the customer question: why should I do business with you? Yet, it is amazing how many very talented business people cannot do this. They cannot clearly and concisely articulate their company’s value proposition.
Before we get started, think about this. It’s all about differentiation (not that awful calculus you took in college). That’s because what the customer’s question really means is “why should I do business with you instead of your competitor?”
How is your product or service different than those you compete with? Truly a lot of clients struggle with this.
We would tell you that almost every business has some differentiation from its competition. And if you can’t find that differentiation, create it!
(In fact, businesses whose only points of differentiation are price and delivery are offering a commodity. Things like precious metals, livestock, and lumber are commodities at the wholesale level.)
Click to read: Finding Differentiation
Some points of differentiation can be obvious like quality of construction, length of warranty, response time, and other specifics of product or service.
But if you think about it, for businesses with retail trade, things like location, areas served, hours of operation, parking, ease of access can be very different between competitors. Brands have a great deal of loyalty too; consider leading labels you carry that others do not.
Also, how businesses treat their customers can be very different. Exchange policies, frequent buyer programs, coupons and specials, delivery, personal consultation, special orders, and so on have a big impact on customer satisfaction and repeat business.
And, quite frankly, where there isn’t differentiation, create some! The point is, if you don’t create differentiation in the minds of prospects, your competition will.
Click to read: Using the customer's perspective
Using the customer’s perspective
For something that seems so obvious, it is surprising how many businesses fail to seriously understand their customers and what’s important to them. Big business spends a fortune every year on creating customer/buyer personas, because there is one thing they can be sure of, different customers want different things.
Perhaps one of your customer personas is Millennials who live close in. You find that these folks have a much lower than normal rate of automobile ownership, preferring transit instead. Now that dingy old bus stop out front is a key piece of your marketing outreach to these prospects.
All customers like to save money. You like to maintain your margins. “Next visit” coupons are a match made in heaven: you get the all important repeat visit and profit on the first transaction, the customer gets to save a few bucks on his next visit in consideration of his loyalty.
Expand your service with a “free consultation”. Again, it’s a win-win because you get to learn more about the customer, potentially up-sell, and they feel like they’re getting the red carpet treatment.
Click to read: The Chasm statement
The Chasm statement
Here we must gratefully acknowledge the contributions of a true giant in marketing and selling, Geoffrey Moore, the author of Crossing The Chasm. In what may be the greatest work ever on introducing new products and services, Moore introduces us to a tool that simplifies creating your value proposition.
Often referred to as an “elevator pitch”, from the scenario of getting stuck in an elevator with a key prospect, a Chasm statement is a crisp and concise statement of your value proposition.
Following is a small chart that, on the left, has the keywords that will form your pitch, and blanks to the right where you will insert information specific to customer personas, your products/services, and your competition. When completed, it will read left to right, top to bottom.
FOR [describe the target customer persona]
WHO [describe the need/problem they have]
OUR PRODUCT IS A [describe the product/service]
THAT OFFERS [the new capability/feature]
UNLIKE [name competitive offerings]
OUR PRODUCT [describe the key difference]
Click to read: Put it into everything
Put in onto everything
Once you’ve formulated your company’s value proposition, it’s time to put it to work. Again folks, this is what makes your business different, and what makes customers want to do business with you. Don’t be shy about telling them.
Make sure it’s part of all your messaging. We don’t necessarily mean the literal words themselves; however, there will be opportunities throughout your business to promote your value. Don’t let those opportunities pass by.
On your website, in your literature and advertising, on social media posts—literally put it everywhere. Make sure all your employees know the “pitch”. Of course, it’s nothing less than critical for your sales people.
Remember, your value proposition answers your customer’s most important question: why should I do business with you?