Creating Your Value Proposition
At its core, marketing is about communication. Companies want to tell people what they can offer them in order to force an action, usually a sale. Communicating value is more complicated than simply listing everything a product or service can do. The best marketing is efficient and effective, wasting as few resources as possible.
Value propositions are targeted and concise messages that business owners and their marketing teams can use to assert their company’s position in the marketplace. This article explores what a value proposition is, its significance, and how you can create one.
What is a Value Proposition?
A value proposition communicates the product or service benefit a company promises to deliver to its customers. The statement is intended to make the product or service attractive to the ideal customers. It also declares what the company can do better than its competitors and why customers should buy its product or service.
A value proposition is different from brand slogans and catchphrases. It should focus on the benefit customers will receive from a product or service, not that actual item or its features. A value proposition tells customers how a product or service will fix a pain point and improve their lives.
The Difference Between a UVP and USP
A value proposition is sometimes referred to as a Unique Value Proposition (UVP). A Unique Selling Proposition (USP) is a similar concept.
A USP expresses the one thing that makes a company better than its competitors. This single, specific benefit is what makes the company stand out. A USP should answer the question, “What makes the company different from the competition?”
The difference between a UVP and a USP is that a UVP involves the primary benefit customers will receive from a product or service and a USP is a company’s comparison to its competition.
Why You Should Focus on Value Propositions Over Selling Propositions
Telling the world your company is better than your competitors will probably not do much for your business. You have to engage and motivate prospective customers by conveying a clear reason why your product or service fills their needs, how it specifically benefits them, and why it is better than similar products or services. Value propositions should succinctly drive customers’ decisions. Forging a connection can generate attention and subsequent revenue.
Four Value Propositions
The Company’s Unique Value Proposition
We search for value in everything we do. “What do I get out of this?” If we don’t see any worthwhile benefits, we avoid that action. Customers are no different. In fact, when they shop for a certain product or service, they question value each step of the way.
Companies need a UVP to voice why prospective customers should do business with them. Without a UVP, customers don’t have a reason to stick around and can move on to another company that might have a strong value proposition that’s difficult to ignore.
Your company’s UVP is the answer to this question: Why should customers do business with us and not someone else?
The Avatar’s Unique Value Proposition
A company’s ideal customer or client is also known as an “avatar.” Creating an avatar lets you pinpoint your marketing approach to speak directly to a subset of your audience that you want to work with. An avatar is a key prospect, not a general customer.
A UVP can be created for each avatar since everyone, even your ideal customers, has different needs and expectations. Each UVP should answer this question: Why should this avatar buy from us instead of a competitor?
The Product’s Unique Value Proposition
Once you have identified your avatars and created UVPs to address them, you can turn your attention to your products or services. You should list everything your company offers and then create a UVP for each one.
Each UVP should answer these questions:
- Why should my avatar buy this product or service instead of another item we sell?
- Why should my avatar buy this product or service instead of a similar item that a competitor sells?
The Procedural Value Proposition
Every action you ask a prospective customer to take, from clicking on a link to finalizing a sale, requires a value proposition. You have to list each conversion step and create a value proposition for each one.
Creating Procedural Value Propositions (PVP) for each action relevant to each product or service concerns answering the basic question: Why should my avatar do this?
A few PVP samples include:
- Why should my avatar click my ad instead of another ad?
- Why should my avatar click my ad instead of staying on the website hosting the ad?
- Why should my avatar continue to engage with my website?
- Why should my avatar continue scrolling down a product’s page?
How to Create a Unique Value Proposition Matrix
A UVP Matrix can tell you which value propositions will have the biggest impact. It can help you prioritize and modify all of your UVPs to optimize your marketing strategy.
Step #1: Prepare the answers
First, answer all of your UVP questions, even the individual ones for each avatar.
Now, it’s time to rate each answer twice. Grade each answer from your avatar’s point of view. You should use a simple number scale, with 1 being the bottom and 10 being the top.
Step #2: The first sweep
How attractive is each point from your avatar’s perspective?
Step #3: The second sweep
How exclusive does the UVP seem? For instance, is this product or service benefit only available via this company?
Step #4: Add it up
The UVPs that have the highest scores are more likely to convert your prospects to customers than those with lower scores.
Perception Is Everything
When you work with avatars, you must get in their minds to see things like they do. How you assign value to something is different from nearly everyone else. It’s especially crucial to step outside of yourself and into your avatar’s shoes when you create a UVP Matrix. You should remember that you are scoring each point from the stance of your avatar.
Also, keep in mind that determining exclusivity can prove challenging. It’s all about perception, more so in this instance. The very idea of exclusivity on its own can be heavily biased. The best way to handle this issue is to research your competitors and find out if they make similar claims to yours. If they do, then the perception of exclusivity can be considered low. It doesn’t matter if you actually offer a better product or service. If someone else offers something similar, the benefits you posit might not seem so special.
A Valuable Message
Marketing is a process of asking questions, answering them, and then using those answers to relate a message of value to prospective customers and clients. Your company has something to offer people. A value proposition drives that information to potential customers by answering the age-old question: What’s in it for me?
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