12 Dec Strategy: Why Is Value Proposition So Important?
Let’s talk about value proposition. It’s one of those key elements of a marketing strategy that is often not completely understood.
Where do you start?
After you’ve created your business model canvas and have a good understanding of your competitors, your price point, your channels and relationships, you can identify your value proposition.
There are some great tools that can help you get there. I will note that it can be easier for some verticals and models than others. Product businesses may find it easier than service based businesses to nail a specific value proposition. Don’t be concerned if you can’t get it straight away. As a service based business it can take some time to understand the types of clients you like working with, and what your strengths are.
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I highly recommend service businesses focus on one or two core offerings. Unless you have a big team and even bigger budget, it’s difficult to scale a business with too many services. You would’ve heard the saying “Jack of all trades, master of none”. If you or your team are particularly good at one or two key services, stick to those. That’s not to say you have to turn down business; (although the idea is that you’ll be so busy that you will) but rather that you should focus your message on one or two key offerings.
Why does my value proposition matter?
The old marketing saying, “you don’t sell services or products, you sell solutions,” is so very true. It’s in these solutions that you will find your value proposition.
Let’s talk about consumer problem solving, and why it’s the key to your business success. I’ll use an example from my life now.
We are selling our house in a few months, and after making some basic interior renovations we are turning our attention outside. Our driveway really destroys the ambience of the rest of the front garden. Let me be frank – It stands out like dog’s balls. It’s hideous old, stained, cracked, and bumpy concrete.
Can you paint my driveway?
So, I have a problem and I start to look for solutions. I either need someone to paint my driveway, or to find an easy way to do it myself. I might do a google search for ‘driveway paint’ or ‘paint my driveway’.
You might assume the solution to my problem is driveway paint. I need driveway paint, or a person specialising in driveway paint, right? My google search presents plenty of solutions for driveway paint.
What’s the marketing solution?
Let’s look at my problem again. What am I really trying to solve?
Painting the driveway is not my problem, it’s my solution. So what is the real problem? What is the value I’m looking for?
I’m painting the driveway because I’m selling the house, and I believe it will increase the value of my property.
My pain point is that I believe the current driveway lowers the value of my property. The gain from my solution is increased value in my property.
Going back to value propositions. If I was working in a business selling a service or product relating to driveway paint, I can speak to my audience most effectively if I offer to solve the problem of a hideous driveway depleting the property value.
Let’s compare potential key messages from two businesses that sell driveway paint. Who offers the greatest value?
One company says, “We sell driveway paint…we have the greatest range of paint…we are local…we have good turnaround times.”
It all sounds great doesn’t it? It certainly answers my need for driveway paint.
Now I find another ad: “We specialise in increasing the sale of properties by colour matching driveways.”
They have loads of delighted customers, and even a few influencers talking about how they sold their property for 20% above the reserve after painting their driveway.
They are also local and have great turnaround times.
Which company will I choose?
They both offer excellent value; but which is proposing to directly solve my problem? When it comes to the buying decision a consumer will look for that answer first.
In my example, I like them both; but emotionally, I feel instantly relieved by the business that has the potential to increase my property value. They’re telling me they have the expertise to solve my problem. This company has clearly identified their value proposition.
How do I leverage my value proposition?
A strong value proposition can be the message that wins the sale. From your website to your advertising, this message is crucial. It’s a dialogue that can be creatively spread across all of your marketing activities and collateral.
Knowing your value proposition can help you find the right niche, engage in the right partnerships and collaborations, employ the right staff, and target the right consumers.
If you’re not confident that you’ve found your ideal value proposition, ask your customers what their greatest pain is. Offering the solution is the key.
Still not sure? Book a strategy call with my team to discover the message that is key to your success.BOOK STRATEGY SESSION