All businesses have to have a value proposition. There, I said it! If you haven't already got a value proposition worked out, then you should be developing one, right now. Even if you have a fully develop value proposition, every 6 to 12 months you should revisit and review it. Some businesses think that their services or product define their value proposition. They do in part, but that's not the full story. Your value proposition means nothing unless it answers a need in the marketplace. Addressing this need has to be at an acceptable price to your target market, and should be sufficiently different from the competition to warrant your market's attention. So, when first developing a value proposition your business, where do you start?
Get Up Close And Personal With Your Market
To craft an irresistible value proposition you must first enter the conversation that is going on inside the head of your potential client. This can be achieved through market research, surveys and interviewing your ideal target. However, do you really know who your potential clients are? Some of the questions you should be asking are:
- Are they male or female?
- What age range do they belong to?
- What is their income per year?
- Where do they live and work?
- Where do they shop?
- What do they read – magazines, newspapers, blogs or social media?
- What clubs or associations do they belong to?
- What concerns and issues do they struggle with?
Ideally, prior to starting a new business, this research would be conducted to understand if there are any gaps in existing markets that you may exploit. By this, I mean identifying whether your sector is underserved or dissatisfied with the current offerings or products available. Many businesses are started by the owner crafting a solution and then looking for a matching problem to solve in the marketplace. However, researching the market place, finding a problem that is begging to be addressed and developing a solution that satisfies this problem is likely to be far more successful. Now, if the solution comes with a business model that allows for you to make a decent profit whilst simultaneously offering your services at an acceptable price to the customer, you have the foundation for a prosperous business.
Where Does It Hurt?
Just like you, your potential client has many things on their mind. They have issues they would like to solve or not have to worry about. Most of these issues have an emotional component. It is the emotional aspects of a problem that you need to be aware of, and how to put forward a solution that assures your target market that your business is the answer to their dilemma. In your search to identify the pain or pain points of your potential client, you must listen very closely to the responses to the questions you pose when performing your market research. The pain may be in an area that relates to their status within their social set, their physical appearance, their reputation or how they save or make money. For instance, you find that your ideal client is active on social media platforms and wants to raise their authority and credibility. This is where you can create a gain for them. They know they need to create great content on a consistent basis to share with their followers. Finding content and creating unique content is demanding and may be seen as a ‘pain'. If part of your service solution is “done for you” content creation, this will address some of the pain being experienced. Like offering soothing ointment for an abrasion, your service will be accepted and most welcome.
Your Solution To The Pain
As human beings, we all have basic needs that require attention in order to feel happy or fulfilled. Keeping this in mind, your value proposition should address the fundamental needs of your customer. These needs may be:
- Need for acknowledgement
- Need for acceptance
- Need for contribution
- Need for security or safety
- Need to feel competent or confident in what they do
- Need for close relationships
Your value proposition must also deliver at least one benefit, such as:
- Save time
- Save money or make money
- Make them look or feel good
- Improve their social standing
- Improve their health
Meeting and satisfying the appropriate needs addresses the pain, whilst the benefits deliver the gain. Understanding this concept puts you ahead of your competition, who are focused on features and themselves!
Now That’s Value
Having identified a need in the marketplace, you should have gone through the following steps:
- Researched your target market
- Developed a solution to their needs
- Ensured your product or service satisfies their ‘pains’
- Included benefits that are perceived by the client as a ‘gain’
- Priced your solution at a level that is acceptable to your client
- Selected a business model that is profitable and scalable
Your offering – your value proposition – has to satisfy various emotional and financial considerations, to be viewed by your clients as representing value. And value means different things to different people. If your value proposition resonates with your target market by meeting and exceeding their unfulfilled needs (pain) whilst improving their lives at some level (gain), you have delivered value. Masters of crafting value propositions will even go as far as mapping their solutions to the financial, emotional, physical and spiritual aspects of their intended market segments.
But Is It Unique?
Up until now, we have been talking about value propositions. To really stand out in the marketplace you have to add one more facet to your value proposition. You need to make it unique. This is where many entrepreneurs drop the ball. They fail by not going the extra mile and crafting a value proposition that features one or more differentiating benefits. Uniqueness can be developed through your offering, for example:
- Special guarantees that your competitors do not provide, providing a risk reduction
- The broadest range or biggest selection of services and products
- Exclusive colours and name brands
- Having the most years experience in the industry
- Having proprietary ownership of software and systems
- Using unique methodologies
- Trademarked designs
- Providing the speediest delivery
There are many copycat businesses that offer the same services and products without any uniqueness. This creates confusion in the mind of a potential customer. These products and services are then viewed as commodities and price is the differentiator. Ensure your offering has a unique aspect to it. Through offering your customers a unique value proposition you will stand out, and you won’t have to compete on price alone.