If there were one bit of advice I’d give anyone in business start-up mode or a small business starting up- work out what is your value proposition. A value proposition is essential for any business wanting to clearly communicate to customers why it is different and better from its competitors. Positioning yourself uniquely in the market you operate in will help you survive and prosper.

You don’t want to get lost in the crowd? Even if you are selling the greatest product or service in the world, without the brand recognition no one is going to know who you are, there will be no sales and therefore no long term success.

What is a value proposition you ask? It’s not as convoluted as the below diagrams which demonstrate the frameworks used by various businesses to develop a value proposition.

Value proposition diagramThe murky depths some go to demonstrate their value proposition. It is really simple; be able to answer why are you different, better and superior?

Your customer
The first step in analysing your value proposition is to think about who your customer is. I like to call this phase the 3 WHATS. What relationship do they have to your product or service? What are the problems you are solving for them and what is your customer’s perception of your product or service?

Your value proposition needs to:

  • Solve a problem or improve the situation that buyer is in (resonance)
  • Give a reason as to why the buyer is going to buy your product and not your competitor’s (differentiate)
  • Know that you can deliver on the product or service promise (quantified value)

No need to start from scratch, as there are always some very popular value propositions you can strategically associate with your brand. Some examples are:

  • Speed of service
  • Range of products
  • Experience
  • Durability
  • Shopping convenience
  • Quality
  • Price
  • Customised
  • Environmental footprint

Don’t forget some of these benefits do not weigh in importance the same way with all buyers. Other methods of coming up with a great value proposition are to examine the weaknesses of your competitors. Most of the time it’s quite simple to differentiate yourself. If you are a ‘one of’ or a business filling a gap in the market, then it’s easy.

Some brilliant examples of value propositions
When talking about take away food franchises, you usually associate them with cheap and quick. This space is pretty cluttered now but Preta a Manger found a gap in the 90s market with ready to eat food parodying the French gourmet take-out restaurants that were just that, very gourmet. This healthy and boutique food service took off from one store to more than a hundred in both the UK and the United States.

The Dyson hand dryer promises hygiene with fewer bacteria than other dryers, hands are quick to dry and operate with low running costs.

Shopify is a one stop shop, e-commerce solution and looks at how succinctly and prominently the value proposition is communicated. Shopify is a complete e-commerce solution that allows you to set up an online store and sell your goods. It lets you organise your products, customise your storefront, accept credit card payments, track and respond to orders — all with a few clicks of the mouse.

How to stand out in a cluttered crowd
The harder scenario is coming up with a value proposition for something that is not so unique. Supermarkets, selling books, travel or clothing items is one of the most competitive spaces to sell in.
Spotify was not a very new product when it first came out, competing with the likes of Napster, Google Music, Itunes and many others. With one of the largest music libraries of 15 million songs, it was the first of it’s kind to provide this online streaming for free on desktop computers and only paying a subscriber fee for use on mobiles and tablets. Spotify found a way to differentiate itself to its competitors by giving people the opportunity to listen to your music anytime and anywhere.

How about the way Apple stands out in the crowd? Now a monolith, Apple who 30 years on has continually changed its strategic focus, with humble beginnings promoting a personal computer at a premium price. There was a particular gap in that market that it successfully filled. While now the value proposition transforms the lives of everyone; the value proposition was developing the breakthrough products of its iPhones, iPods, and iPads.

In the very saturated gluten-free bread market, there is the brand Precinct whose value proposition is it hand makes its artisan bread every day. The ingredients are front in mind with the customer on all its packaging; a style sourdough bread that includes stoneground chia, buckwheat, and besan flours. The value proposition is that these quality products make a healthy bread that is like ‘normal’ bread. The competitive advantage is that it is like normal bread. Simple.

Note when thinking about your value proposition they are simply articulated with no business jargon. It’s also not a mission or vision statement. If your competitors are already providing these value adding products and services, figure out how to clearly and uniquely communicate your competitive advantage to your customers.

Examples of weak value propositions:

  • Best in class by leading authorities
  • Improve communication and morale
  • Technically the most advanced on the market

So test and test
How do you know it’s going to work without using a crystal ball? The best way is to test your value proposition by running targeted competitor Facebook and Google ads and pointing them to a landing page where the value proposition sitting front and center. You might need to juggle 2 or 3 if your a business strategist or you can not pick from one! This happens a lot.

Get input from small groups of customers with surveys and focus groups too. If you have staff, do your staff know how to articulate your business’s value proposition every day and are they engaged with it? The CEO, board members, and senior people also need to walk the talk.

Your value proposition is the most important element driving your brand and generating more business. Get this right and it establishes a foundation upon which a company’s sales funnel and marketing are built on.