What’s Your Value Proposition?
In the business world it’s almost unheard of not to have any competitors, which is why it’s so important to know why and how you’re different from other businesses.
Done correctly, an effective value proposition can give you a huge advantage over your competitors. But beware that on the flip side, an ineffective one can make your ideal customers turn to your competitors, because they don’t immediately realise that you offer what they need.
What is value
The term “value” is now so overused in business and, more often than not, when you claim to offer value, customers automatically assume you’re talking about price (also known as ‘absolute value’). When a customer’s thoughts are on price alone it’s easy for them to compare you against your competitors and make a decision based purely on who offers the best value for money.
Your aim, therefore, is to show your customers the additional value you bring that‘s not price focused. This is where your value proposition and value differential comes in.
Your value proposition
Simply put, a value proposition is a summary of how your product or service benefits your customers and typically answers the question, “So, what do you do?”
Your value proposition is the most compelling reason why a prospective buyer should become a customer and highlights the benefits and features of your business that set you apart from your competition.
Add context with your differential
Along with your value proposition you have a value differential, which is the piece that adds knowledge and context to the concept of “value”. With this differential you move beyond simply telling your customers what they get for their money, and into why your customer can only receive that particular value by purchasing a particular product from you.
Having an easily identifiable way of comparing products that doesn’t rely solely on price is a fantastic tool for marketing your business and selling in a competitive market.
To calculate your differential, a great idea is to run a survey with your customers to establish…
- What they value
- What they don’t value
Customers are largely indifferent to price, but they definitely sit up and take notice when introduced to differential value. It provides clear sales leverage, helping your salespeople communicate why customers should buy from you. It improves the work your salespeople are doing because they can finally differentiate themselves from your competitors. And, it improves your overall marketing message by offering more specific and quantifiable information.
You’ll find some really helpful exercises for defining your value differential in our new “Top Tips and Ideas for Business Growth” Book – click here to download your free copy now.
