Your product may be the best product in the world, with the most amazing features, your presentation to the outside world might be perfectly executed, and you have the best price in your category, but no one will ever know about all of these fantastic items if they don’t get past your high-level value proposition.
The value proposition is the number 1 thing that determines whether or not people are bothered with reading more about your product or hitting the back button. In this blog post were going to dive into the Value Proposition. What is it, what’s it not and how to create a winning Value Proposition for your business.
What is a value proposition?
In its simplest terms, a Value Proposition is a positioning statement that explains what benefit you provide for who and how you do it uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives.
Basically, a Value Proposition is a promise. A promise of the value you’re creating for your customers as soon as they use your product. It’s the reason a lead should buy your product and not your competitors. A good value proposition as Peep Laja from ConversionXL talks about, will explain how your product will:
- solves customers’ problems or improves their lives (relevancy)
- deliver specific benefits (quantified value)
- tell your ideal customer why they should buy your product and not the product from your competitor (unique differentiation)
A value proposition uses the right language, think of it like this:
Are you able to explain to your friend what the offer is and how they can benefit by telling them in one sentence it is what you’re doing?
Then you’re on the right track. Skip meaningless jargon, which only insiders will understand. It needs to be in the right language of your customer. To be able to do that you need to know how it is your customer talks. You cannot guess what language they use, you have to test it as part of your understanding of your customer. As part of the process of building up Buyer Personas.
The way you talk about your services is often very different from how your customers describe it. Just like when trying to get validation for your startup idea, there are no truths inside the building, you have to have conversations with your customer to find out.
What the value proposition is NOT
An easy mistake to make is to think that a slogan or catch phrase is your value proposition. Slogans are great boardroom material when you have a billion-dollar advertising budget. But that’s not something for the rest of us. Things like:
- Nike – Just do it
- Adidas – Impossible is Nothing
- McDonalds – I’m loving it
- Vodafone – Make the most of now
Are no value propositions. The same thing goes for positioning statements, for example, an expensive perfume might use the following:
“The ultimate fragrance for the discerning woman, our perfume delivers a one-of-a-kind floral aroma immediately recognisable as classic and rare.”
Although it sounds almost like it could be a good value proposition a positioning statement is a subset of your value proposition. A message that helps you more with the broad marketing of your product.
Sell like you mean it
A good value proposition has a number of elements. According to research done by Neil Patel, a good Value Proposition includes the following:
- headline – describes the end benefit you’re offering to the customer
- a subheadline or paragraph – a detailed explanation of what you offer, to whom and why
- three bullet points (optional) – list all benefits and/or features
- a visual elements – show a video or image to enhance your message
How to create a winning value proposition?
There are a bunch of different ways to approach the writing of a good value proposition. And with each different way they’re famous people behind it. You want to convince your customers to start using your products or services and get a higher conversion? Then you can use one of the following four ways to help you on your way to creating that compelling Value Proposition.
#1 Steve Blank’s XYZ
Probably the most easiest way to create a Value Proposition for your company’s product or service is the way Steve Blank describes it in one of his famous writings: “How To Build a Web Startup – Lean Launchpad Edition”.
“We help X do Y doing Z”
In the case of Inbound Rocket: “We help small and medium enterprises getting a higher return on investment with their WordPress web site by turning anonymous website visitors into valuable and identified leads.”
#2 Dave McClure’s Elevator Ride
Dave McClure of 500 startups has a different approach. In his famous “How to Pitch A VC” slide deck he talks about a 3-step checklist for creating Value Proposition statements (starting at slide 12).
* Short, simple, memorable; what, how, why.
* 3 keywords or phrases
* Keep It Simple Stupid (KISS), don’t use expert jargon!
“Inbound Rocket, is the easy way to get more visitors and convert them into leads on any website running WordPress.”
#3 Dan and Chip Heath’s High-Concept Pitch
In “Made to Stick” the Heath brothers talk about how high-concept pitches can convince movie executives to invest in a new movie project with almost no money. Things like “Jaws on a spaceship” (Alien) or “Die Hard on a bus” (Speed) are good examples of this. This concept can be translated into the following format and examples:
[proven industry example] for/of [new domain]
* Flickr for video. (YouTube)
* Marketo for WordPress (Inbound Rocket)
#4 Geoff Moore’s Value Positioning Statement
Geoff Moore author of the famous book “Crossing the Chasm” has a slightly longer format to help you create your value proposition. It delivers a wordier Value Proposition than if you would use Steve Blank’s, Dave McClure’s or Dan and Chip Heath’s format, but the outlining is really simple, and it makes it very easy to use for your company.
For ____________ (target customer)
who ____________ (statement of the need or opportunity)
our (product/ service name) is ____________ (product category)
that (statement of benefit) ____________.
For small and medium businesses
who struggle to get qualified leads from their website
our product is an easy to install WordPress plugin that helps turn anonymous website visitors into valuable and qualified leads.
Just because you build a newer, better product or service doesn’t mean the job is done. Unless the perceived value or gains are not made clear, your leads won’t convert. However, you can influence the way your leads recognizes the gains and losses. The best and easiest way to demonstrate value is to explain what life is like before and after using your product. By using a clear Value Proposition, you can convince potential customers that life is better by using your product and that it’s well worth the effort.
Just like all things startup related, a value proposition is something you need to test and validate though to make sure it has the greatest impact.
Communicating value means clearly defining why they should buy.