This mistake is too commonly made by companies of all sizes. I’ve seen large organizations that are so fearful of identifying a discrete set of prospects to be their target audience, for fear of missing out on any opportunity, that they never even get to answering the question of why “should those people buy from me?” I’ve seen entrepreneurs and small companies that are so busy just trying to hold all the pieces of their business together and make a profit that they view taking the time to understand who they want to serve and why they’re different as a “luxury” that they’ll get to someday when they have more time or when things slow down. It happens to the best of us.
If your product or service is the “reason you exist,” then your value proposition is the “reason you will thrive.” It’s the way to win business over your competitors and the way you meet your customers need in the market. I love how John Jantsch from Duct Tape Marketing put it when he said, “Until you can firmly offer a solid reason for why you should buy from or hire us over everyone else, you’ll compete on price.” There are very few companies that want to be in that position (and even fewer that can be profitable at it), especially for an online business when the next alternative is a click away.
So, what is a value proposition and (assuming you now also believe that it’s important), how do I create one for my business? Investopia defines a value proposition as a “statement to target customers who will benefit most from using the company’s products. The ideal value proposition is concise and appeals to the customer’s strongest decision-making drivers.”
Breaking that down into bite-size pieces, you can derive a strong value proposition by:
- Defining and understanding your target audience: You simply cannot be all things to all people, lest you risk being “nothing to no one.” Define a very specific type of customer that would benefit from what you offer. Are they a business or a consumer? Where are they located geographically? How old are they? What do they do for a living? It’s important to get as specific as possible; the more defined you are about who you serve, the louder it will resonate and the further your message will reach. The more you know about the ideal customer for your business, the better you will be able to meet their need. If you truly have no idea where to begin – simply start by looking at and speaking with who has purchased from you in the past. There’s a wealth of information right in front of you that can lead you to gold.
- Meeting a need or desire of that target audience: Your products or services are meeting either a need or a desire today. Your products and services could be making lives easier, lowering costs, growing revenues or improving quality of life. Once you know exactly how you benefit the buyer today and combine that with what you know are your core strengths (it’s important to know what you’re good at), you can use that to enhance your offering over time and attract more buyers from your ideal target market.
- Understanding what makes you different: What you offer – or the degree to which you can benefit a buyer – needs to be unique to you in some way. That doesn’t necessarily mean that you have to do something that absolutely no one else on any web site is doing (which is nice, but rare). It does mean that you need to deliver your offering in a more unique way, derive better results, provide a greater level of support, be the fastest, most innovative, even the most personable; and yes, you can always be the cheapest, if that aligns with your overall brand. Choose one thing that makes you different, not 4 or 5 things – no one will remember all that. Determine which one is the strongest and stand on that. Use that as the pillar that you use through all communications and acquisition channels. In a perfect world, what makes you different is also the attribute that many in your target market find tremendously valuable.
- Being clear: To be effective in engaging with your target customer, you’ve got to be able to articulate in a clear and concise way what you do, how you’re different and why they should choose to do business with you. You need to do all that in one sentence. Don’t make your audience work too hard to understand it. They need to “get it” and then they need to hear it over and over again. When writing it down, put yourself in the target audience’s shoes; peer through their lens. Use words they understand and are familiar with and promote that singular reason why you’re different and why they should buy from you.
If your prospect has done the hard work to find you online, make sure you make the most of that opportunity and convert them into a customer through the creation and communication of a compelling value prop.