Value Proposition Workshop: Crafting Your Value Proposition
After you’ve analyzed your customers, your competitors, and your own company, you should have enough insight to craft a value proposition for your company. The idea of a value proposition is certainly now new, but many business people still fail to understand exactly what it is. It is NOT a list of features and benefits, and it’s not marketing fluff. It’s a statement, usually several sentences, that describes what your company offers in terms of tangible business results defined from your customers’ perspective. That last portion of the definition is where many companies lose their way. Your customers don’t care what your company offers just because you think it’s the greatest thing since sliced bread. They care about what you offer that meets THEIR needs and helps them achieve THEIR objectives.
An effective value proposition plays a key strategic role in developing a company’s brand strategy and competitive positioning. Once you determine your value proposition, all of your marketing messages can be cohesive. If communicated well, there is a clear agreement or understanding of the business exchange that will take place between your company and your customers. If backed up by the infrastructure to deliver what you promise, you have the ability to build brand equity: that intangible something that drives customer behavior and makes them prefer one brand or company over another.
Before crafting your value proposition, you need to determine the differentiator that will be the basis for your offer. There are really only three types, and you can use the following statements that apply to each one to determine where your company fits. Keep in mind that some companies fall into two of the following three categories; however, in order to have a truly strong brand strategy you need to focus primarily on only one.
1) Operational efficiency, or lowest price offer:
- Your customers just want a good product at the lowest possible cost. New technology or improvements aren’t particularly important. It really is price that counts.
- You’re not trying to come up with new or better products or services. You just want to produce more volume at lower cost.
- You focus on creating operational efficiencies to keep costs down.[/list]
2) Market leadership, or the best products or services, most advanced technology:
- Your customers care most about “the best” – period.
- Your company culture is completely dedicated to innovation and quality.
- You work constantly on improvements and innovations that you can bring to market first.
- You stay on top of what your competition is up to and make sure you stay one step ahead.[/list]Customer intimacy, or the best overall solutions and service:
3) Customer intimacy, or the best overall solutions and service:
- Your market is flooded with products or services like yours and pricing is all across the board. However, your customers want more than a standard product or service; they want customized solutions.
- You strive to know as much as possible about your customers’ businesses and needs and build successful relationships so you can deliver the ideal products, services and solutions over time.
- You know you can’t just say “we offer great service.” This is ingrained into your corporate culture, and your employees just do it; in every interaction they have with every prospect and customer.
- What objectives or unmet needs does your company provide its customers?
- What is the quantifiable offer that your company provides to meet customer needs?
- Why would a customer select your company over your competitors?
All of the discussions you’ve had and documented during your VP Workshop should now come to bear on the answers to the above questions. Just start writing . . . you can always go back and tweak and perfect it later. The hard part is done! Now, with your value proposition clearly defined, you have the core messaging that will be communicated through your Brand Strategy. Give your VP Team a pat on the back, and start thinking about how you can best bring life to your value proposition and begin building that coveted brand equity!