You can do this with a Value Proposition. Value what? A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition can be applied to an entire organization or parts thereof, or customer's accounts, or each of your products or services. Creating a value proposition is a part of business strategy.
Usually, a value proposition is created based on the costs, benefits, and value that can be delivered by the organization to its customers, prospective customers and other people associated with the organization, directly or indirectly. A value proposition can be seen as a mutual understanding between a service provider and a customer. Loyal relationships are established when the service provider and customer feel they are participating in a mutually beneficiary exchange. A customer buys your products/services for the quality and when the benefits outweigh the costs incurred to avail the services.
Why do you need a Value Proposition?
A value proposition will help you to break through the clutter and get customers attention. A majority of companies are trying their heavy marketing force in order to cover up for their weak value proposition. A value proposition must contain
- Describe "What We" provide
- Answer " So what"
- Quantify "How much"
- Provide Proof
These elements will help you carve out a perfect Value Proposition Canvas for your organization. Let's have a look at the 10 Step Process on how to create a perfect Value Proposition
- Begin with your core competencies
- In-depth study of your customers
- Turn core competencies into values
- Detail study of the competition
- Be aware of trends in your industry
- Define the company vision
- Identify one core value
- Try to build a value chain
- Articulate the value proposition
- Test the value
Begin with your core competencies
What are you really good at? A value proposition must contain what you do and who you are. It can't just be what you want to be and what you say you are. Make a list of the internal capabilities your company has in developing your services or products. Make a list of the following:
- What you brought to market first
- What you offer as the only provider to the market, and
- What makes your offering clearly superior to any alternative
- What makes your company unique.
These are good differentiators and will help the process. It will act as an added benefit and will help in attracting more customers as they will have a clear picture on what is the value they will gain from the product. In-depth study of your customers, An in-depth study of your customers will help you to get a clear idea on what are the requirements of your customer and what are they expecting.
- Who are your top customers?
- What problems do you solve for them?
- What problems do they want to be solved?
- Is there a new trend in any of your key customer segments
Turn core competencies into values Translate a technological advantage into a customer stated advantage. List proof points for each. Using a language which Is easy to decipher for the customers redefine your core competencies. You should ask yourself why someone should buy from you rather than your competitor. Detailed study of the competition Chooses top 3 or 4 competitors in your industry. Keep a track on how they market their product and what is the value proposition they have.
Understand how they have crafted their value proposition and how they are defending it by living up to their expectation. Map out the differences between the competitors and you to avoid similarity of any kind. Be aware of trends in your industry If your industry is old, keep track of the changes that it is going through. It is necessary to understand these changes and adapt in order to stay afloat in the market or else there is a chance that you will run out of business soon. Similarly, if your industry is new, understand the trends of the industry to gain an edge over your competitors and be the top player in the industry. Define the company vision A vision is an integral part of the organization. It defines where the company will be in 5 years or 10 years or 20 years. The value proposition must align with the long-term strategy. It is mandatory to articulate the vision. It can be done in various categories, namely
- Product Leadership
- Customer Intimacy
- Operation Excellence
Identify one core value A hiker cannot simultaneously go North, South and West at the same time. It's impossible. Be decisive about which of the three you choose. It conveys a clear message to potential customers as to why they should buy from you and to employees as to what they should be doing. Choosing, makes a statement as to what your structure, core competencies, business process, and culture will look like, and provides the customer profile upon which you can build a well-constructed business strategy! Try to build a value chain It is necessary to assess that whether you can support your top value across every part of the company, from product design to the delivery channels to process for support. Make sure to identify weak areas in the company, there is a possibility that that you may break the value chain. Articulate the value proposition Through the value proposition you should be able to communicate to your customers what you provide them and why to buy from you. Your value proposition should be precise so that it can be used as the starting point for developing, positioning or messaging for products or services. Test the value Test the final value proposition with customers to see whether it resonates. As you go through this process, continually ask yourself these questions:
- Are you and your executives being honest, or are your using wishful thinking when you list your core values?
- Can you defend the value? What are the proof points?
- Can you quantify the value to your customers?
- Do your customers see value in the propositions?
Tempted to have a value proposition for your company? Contact us and stay ahead of your competition.
May your garden teem and throng with customers
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