Value Proposition Benefits and Advantages
(This is the second post in my series on the Value Proposition; check out my initial piece covering 'The Value Proposition Definition' here.)
A robust and impactful Value Proposition is essential for any business to effectively engage and connect with customers, partners, stakeholders, and critically internal employees, by clearly communicating how it is different, better and worth purchasing from. The Value Proposition is central to the overall business model (it’s no coincidence that it’s at the heart of Alex Osterwalder’s Business Model Canvas) and should form the anchor for all decision-making, operations, and customer engagement. It is more than a set of words; more than a set of marketing messages; it is the framework for how the business aligns its activities and output with its target audience’s needs, to deliver a compelling experience that can ultimately be monetized through an exchange of value. In this respect, the Value Proposition is key to validating your business idea; both as you start up and as you grow. Here are the benefits and advantages that should be considered as you go through the process of discovering, articulating and realizing your Value Proposition:
Whether you're a start-up or an established business launching a new product or service, you're unquestionably excited about your concept. Yet this enthusiasm can often blind you if you're not careful. If you’re not clear about your Value Proposition at the outset you risk developing something that may satisfy your needs, but not those of your intended customers. A Value Proposition gives you direction by defining your ideal target audience right up-front, and then identifying and understanding a core need that you look to satisfy with your planned solution. A clear Value Proposition thereby helps you avoid wasting time, money, and effort by offering products or services that aren’t relevant or attractive to your target customers; and then trying to marketing and sell to customers who won’t buy from you anyway.
A robust Value Proposition gives you and your team focus by identifying the fundamental initiatives, activities and aspects of your business that will have the greatest impact on meeting your defined target audience's needs. Your Value Proposition is your 'True North', focusing you on the who, why and how you're delivering value. It outlines what you must deliver to meet your defined audience's needs and create an overall remarkable experience. If an activity or initiative isn't consistent with your Value Proposition you have to ask: why are you doing it? The simple answer is you shouldn't be. Feature creep is the result of a weak Value Proposition; staying true to the core need that you're fulfilling for your defined audience will enable you to ask whether a specific feature is absolutely necessary to meet it, thereby providing a filter for what's in or out. As Steve Jobs once said: “I’m as proud of many of the things we haven’t done as the things we have done. Innovation is saying no to a thousand things.”
Having a strong and honed Value Proposition gives you, your team, and your stakeholders clarity so that you can progress without questioning and second-guessing your every move...thus breeding confidence. Referring to the certainty of your 'True North', you can be assured of the decisions that you make by seeing where and how you're adding value to your audience. Confidence comes from knowing that you're making a difference to the people that you're serving, that you're doing so in a way that's meaningful to them, and that your actions are aligned to delivering an overall remarkable experience. People want to feel as though they're valued members of a winning team on an inspired mission; the Value Proposition is your mantra.
Improves Customer Understanding and Engagement
The Value Proposition gives you the basis to engage with customers in a compelling and resonant manner by understanding how they view you, and your products or services. Without this alignment you may be talking to prospects and customers in ways that bread misunderstanding or even alienation - and people who feel misunderstood don’t buy! The Value Proposition determines the factors that not only make a difference to your audience, but do so in aspects or ways that are meaningful to them, as opposed to superfluous 'gimmicks' or peripheral features. By grounding your solution in an understanding of your audience and their specific need, you can engage with them in a much more compelling and effective manner.
Provides Clarity of Messaging
Especially as a start-up without any brand recognition, you're going to have to paint a very clear picture as to why you’re worth people's time. Often though, many companies’ marketing messages end up being vague and unfocused, thereby losing their impact and persuasiveness. The Value Proposition frames not only how you're creating value for your audience by addressing a core need, but critically why your solution is better than what they are currently doing or using, or versus whatever else is potentially out there that could do so. It also asks the question "how are you remarkable?" - what is it that, in your customers' minds, makes you worthy of their attention and interest? By thinking in this way right upfront, and building these facets directly into your product or service, you have the basis to define a clear, consistent and engaging message that will resonate with your audience. At an executional level, a refined Value Proposition will specify the right wording and phrasing for your marketing messages by taking them directly from the articulation of your Value Proposition statement; these can then be tested across keyword targeting and ad copy, etc. This in turn is a method for verifying your Value Proposition directly with customers as you move forward.
Increases Effectiveness of Marketing
The Value Proposition directs your marketing efforts to concentrate on those activities that will generate the greatest results. By truly understanding your desired customers and their core need that you're solving for, you're able to focus on the channels and vehicles that are most relevant, and will effectively communicate the benefits and advantages of your solution.
An effective Value Proposition works on many levels; inspiring and guiding the team internally, as well as providing clarity, confidence and assurance to prospects and customers. It is the embodiment of your brand and your business. A powerful Value Proposition is THE most important asset that you will develop, whether you're starting up, pivoting, or launching a new initiative from within an established business.