In the simplest of terms, a value proposition is how your company can solve the customer’s problem more effectively than any competitor. Your value proposition might be that you have a better understanding of your customer’s problem because you used to work in that industry or at that company. You might have a more advanced product that can solve multiple problems at once, or a more highly skilled group of employees to help solve the problem. Or maybe you’re a lot less expensive than your competitors (although often times a value proposition allows you to focus on quality and not price).
A good value proposition has two sides: the customer side and your company’s side.
The Customer Side
The first side of the value proposition is about what the customer needs. Without the customer needs side, your value proposition is based on your view of the world and what you THINK your customer needs. By doing a little research, asking the right questions, and understanding the customer, you can identify his or her needs and build a better value proposition.
In order to better understand your customer, ask questions in the four following categories:
What are the customer’s financial goals? Is cost the real issue? What else is important financially?
What outcomes does your customer expect? What are the one or two outcomes that will make this successful?
What types of resources does this problem require, both from the customer’s end and your end? Does it have to be one person? Can it be a combination of people or types?
- Time. What are your expectations around timing? Is this an urgent or later-term need? Is it a one-time problem or ongoing?
The answers to these questions will provide you with a deeper understanding of your customer’s problem—and any expectations for a solution. Include your customer’s answers to these questions in your value proposition statement.
Your Company’s Side
The second part of a good value proposition is based on what your company can do as a business. It’s how you can uniquely solve their problems with a deeper understanding and better ability to execute than your competitors. You’ve already asked important questions and gathered the information to help tailor your solution to their specific needs. Now weave that information into a specific message to your customer. Include the following:
- Industry messages
that communicate an understanding of the sector.
- Issue messages
that communicate your value around issues the customer knows.
- Differentiating messages
that stake a claim and point of view, on what your company thinks about the business.
- Capability messages
that articulate how your company can get it done and fulfill on that promise.
- Financial messages
that demonstrate the value the customer will gain.
- Personal messages that acknowledge the style and preferences of the buyer.
When crafting your value proposition, include both your perspective (in terms of what you can offer) and the perspective of your customer (in terms of what they need). If you’re successful with this message—and what you can execute—then you may have something unique that will set your company apart and give you an advantage.