Understanding and Communicating the True Worth of your Value Proposition
No matter how amazing you think your business idea is, the concept is nearly worthless unless you can figure out how to clearly communicate its value to your customers: what business leaders commonly refer to as the value proposition of your company. In our High Performance Revenue Guidebook, we define a good value proposition as one that “ quickly informs a prospect who you are and what you do. It maps your products or services against what your customer wants most (based on your research), and what you do best (based on your performance).
1. Identifying the problem you’re solving
When developing your value proposition, it’s vital that you communicate what your business/product is and why your product is unique or of greater value than similar items/services. When it comes to creating value props, focusing your energy on the problem you’re solving for your customers is key. As Charles Kettering – head research at General Motors – once said, “a problem well stated is a problem half solved.” And knowing what and how your business plans on solving a particular pain point for your customers is a core component of your value proposition.
2. Build a customer profile
To write a good value proposition, you have to put yourself in your customer’s shoes. If not, you could end up creating a product that doesn’t match your customers’ needs: like Harley Davidson did in 1994 when it released a perfume (It didn’t sell well). While there were many mistakes during the perfume research and launch, it is clear that the company didn’t invest enough time to understanding their customers’ needs when developing the value proposition for this perfume. One way you can avoid this type of mishap is to follow models for creating great value propositions models. Strategyzer’s model
and the one we developed in our Guidebook are great places to start.
3. Keep it short and simple
According to Collis and Rukstad in, “Can You Say What Your Strategy Is?” a value proposition should be able to “summarize your company’s strategy in thirty-five words or less.” This length isn’t an absolute rule, but a suggestion designed to keep your proposition on point. Another way to think of this is through the elevator pitch concept. Once you’ve developed your elevator pitch, make sure everyone knows this concisely stated value proposition well and can recite it consistently.
Here’s a great elevator pitch example from Slack:
“The average office worker receives 304 emails per week. They also attend an average of 62 monthly meetings, half of which they consider 'wasted time'. Slack was made to make work more efficient. It organizes conversations by channels and drastically reduces the need for emails or meetings. It's integrated with 100s of productivity tools like Google Docs, Calendars, Email, Dropbox, Zoom... so you can receive automatic notifications and take action without leaving the interface.”
- 4. Getting everyone at your company on the same page
To quote Collis and Rukstad, again, “It’s a dirty little secret: Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else.” Your value proposition is your guiding star. If leadership can’t articulate it, this will send a message to others that it’s okay for them not to care. So, It’s crucial to get leadership buy-in and have them learn and teach the value proposition to your employees.
- 5. Conclusion
As a quick refresher, always be precise when writing your value proposition. Simplicity and an economy of language will go a long way to making your value proposition easier to understand. Make sure you understand yourself and your customers. Work hard to figure out what customers want and take the time to make sure you know what you can provide. And finally, make sure everyone in your company is on board and understands your value proposition.