Put simply, a value proposition is the value you are proposing to be delivered to a customer or client. Essentially, this is the main principle behind any business – the idea that you will be in some way delivering value so that the recipient is willing to give you their hard earned cash to receive said value. No matter what your business is, delivering value should be at the crux of what you do – whether that means offering a great product that will positively change the customer’s life, or whether it means providing a good service that will help them to perform a task more quickly.
Understanding the Importance of Value
In order to be successful in business, you need to concentrate on ways to make sure that the end result is more valuable than the cost you’re charging. For instance, you spend money only for a haircut, but the value you receive is that you will get more interest from the opposite sex and you will feel better about yourself. If you only feel a bit better about yourself, then you might feel that overall it wasn’t worth the $40. But, if you feel a lot better about yourself, then you will feel like you got good value for money and that you would get your hair cut by the same stylist again.
Short and Sweet
The value proposition is the base foundation of your entire marketing plan. As such, it’s critical that it is short and sweet. You need to have a clear understanding of what your value is and you need to be able to communicate that clearly and concisely. If you can’t describe your value proposition in small words in one or two sentences, then working on getting there is the first thing you should be doing. If it’s not clear to you, how can you possibly communicate it clearly to others? If you have to use big words and a complicated explanation, how likely are the people you are pitching to likely to remember what you are offering?
Value is about Benefits
When defining your value proposition, remember that value revolves around benefits, not features. Features are the specific attributes of your product. Benefits are the inherent improvements in the quality of life that your product allows your customers to enjoy. If it’s a laptop, the value you’re offering is not the 4Tb hard drive, but the fact that your customer can store all of their pictures and videos in one portable place for another year or two. Your value proposition must be based on benefits because, at the end of the day, the customer is making their purchasing decision based on an improvement for their quality of life, not a feature.
Tell Your Story
Once you have your value proposition figured out, you are going to be using it to tell your story. The essence of marketing is to tell a compelling story about your value proposition to as many relevant people as possible in a way that will compel them to buy your product. There are a lot of tools and terminology in marketing that are valuable, but most of them just describe the important art of storytelling. Just as with a good story, it starts with good characters and a good plot. This is your value proposition, the crux of your story.
Once you have your value proposition clearly defined, the rest of your marketing work becomes a LOT easier. Your tag line,brand identity, target market, price point, distributions channels…are all tied intimately to your value proposition and a lot of it can fall into place directly with a well understood value proposition. So, take the time, get it right, and write it down!