It’s the most important task your business will ever undertake!
This is a long post because it’s a very important topic. If you don’t have a strong value proposition or you don’t know how to use it, your marketing lacks any punch.
Definitions of value proposition are generally vague, confusing, and different depending on the source.
The usual definitions miss aspects of value proposition that could make the concept much more useful. A value proposition is much more than just an “internal tool” that has no practical application beyond helping you understand your business.
And when even marketing experts fail to see that it could be an almost unfair, it’s no wonder so many businesses don’t have strong value propositions.
In this article, you’ll learn the two necessary elements of a value proposition and what a strong, refined value proposition will give you.
But before we get to any of that, you should know that value proposition is arguably the most complex concept in business that you’ll ever come across.
And the way I define it doesn’t cut corners to make it simple. Instead, the purpose is to make it your unfair competitive advantage. Simplified concepts can’t really do that.
But it’s well worth the time it takes to get it just right because it forms the basis for your success.
And if it’s weak, your business is almost guaranteed to fail.
The acronym soup
There are several concepts and techniques that are similar to the common definition of value proposition. But none of them are as useful and valuable as a strong value proposition in itself.
However, they can help to illustrate what, exactly, a strong value proposition is.
- USP(Unique Selling Proposition). USP is the most closely related concept. It’s often considered synonymous with value proposition (especially in relation to copywriting). But it only focuses on what makes your product better than competing options. And that’s just a part of a strong value proposition.
- FAB(Feature-Advantage-Benefit). FAB is a process that helps you figure out what each of your product’s features means to your customers, which enables you to address their concerns, desires, wants, and needs. You start by listing your product’s features (e.g., stainless steel as the material of a knife). Then consider what advantages it creates (it won’t corrode). And finally turn that into the practical benefit (you don’t need to buy a new knife every year).
- POP-POD(Points of Parity – Points of Difference). POP-POD is a process used to find differentiating factors between businesses. You start by finding “points of parity,” or the factors you have in common with your competitors. And then you find “points of difference;” the aspects of your business that differentiate you from your competitors.
- UVP(Unique Value Proposition). UVP sounds nearly the same as value proposition. But the strong focus on uniqueness makes it less useful (much like USP).
The value of a strong value proposition
When you’ve created and refined your value proposition (the way I believe you should), it will help you in several ways:
- It makes you focus on aspects of your business and initiatives that make the biggest difference.You’ll know what you need to deliver to be the best option for customers.
- It helps you avoid wasting time, money, and energy.You won’t waste time going after customers who won’t buy from you anyway. You won’t waste money offering products or services that don’t attract more customers. And you won’t waste huge amounts of energy (as well as time and money) on marketing efforts that don’t create results.
- It helps you develop the most persuasive marketing concepts.You don’t have to guess whether you’re focusing your marketing correctly or not. You can create a simple, clear list of the few things that really make the difference, and you can focus your marketing only on those.
- It gives you the right basic wording for marketing messaging.People often water down their marketing message so much that it loses its persuasiveness; they create “marketing bladiblaa.” When your value proposition is refined, you can just copy the basic ideas from it word for word and build your marketing messages around them.
- It shows you how your customers view you and your products. Without a strong value proposition, you might speak about your business and products in a way that doesn’t resonate with your customers. You don’t know what’s wrong, but you’re making your prospects feel misunderstood. And people who feel misunderstood don’t buy from you.
- It reveals the connections between your product and your prospects’ goals.Understanding exactly how people believe your product will help them is necessary if you want your business to succeed. Otherwise you can only guess what people expect and hope for.
- It gives you confidence.Having a strong, refined value proposition gives you clarity so that you can move forward without second-guessing your every move.
The two elements of a strong value proposition
When you create a strong value proposition, it’s not just a couple of sentences.
It’s not a company or product description, mission statement, elevator pitch, or advertisement (though it could almost be used as one).
Instead, a strong value proposition is a believable collection of the most persuasive reasons your target customers should do what you’re hoping they will do.
It has two separate parts, and both parts are necessary for it to work.
1. The articulation of your value
This is the part most people easily recognize as a value proposition.
Simply put, value articulation describes the overall perceived value of your product or service.
It’s not just the product you sell; it’s everything potential buyers perceive as valuable in your offering
If you buy a car, you don’t get just the ability to move around from point A to point B. You also get the convenience of not needing to wait for a bus.
Typical pitfall: Some value is expected from you and all your competitors. You need to deliver it, but it doesn’t make you a better option than your competitors.
For example, every car gives you the ability to move around and the convenience.
If something isn’t at all unique to you, it won’t be enough to build a strong value proposition.
People choose cars based on size, price, status, brand, design, and other features and benefits that differentiate cars from each other. They also choose based on perceived value; perhaps a certain car will make them feel more confident, feel like a part of the “in crowd,” or help them project the image of themselves they wish to have.
You need to have something unique to offer. Otherwise people have no special reason to choose you, and when your competitors do offer something unique, people choose them instead.
In other words, your product or service needs to be a better option than that of your competitors in at least one way.
But you only need to be unique in your customers’ minds.
It doesn’t matter if someone else offers the same product or service that you do if your customers don’t know about it. That happens in three ways:
- Your customers don’t know about the competitors whose “unique” offerings are basically the same as yours.This is becoming increasingly rare because finding alternatives is so easy online. If you base your value proposition on this, you’re going to see your results get worse over time.
- Your competitors don’t advertise.Many people don’t realize they offer something that could be perceived as valuable if they just told people about it. So, if you’re the only business who advertises a product feature that every similar product has, it can appear unique.
- Your customers don’t believe your competitors can deliver it as well as you do.Sometimes it’s nearly impossible to be significantly different from your competitors by offering something they don’t. But if people believe you do something better than others, they’ll choose you even if your competitors offer all the same products.
As long as people believe you’re the best option for them in at least one way, they have a reason to choose you instead of your competitors.
To get this part of your value proposition right, you need to find the core of it.
It’s what makes the biggest difference to the buyers you’re targeting.
Developing the core into a refined value proposition
The core of your value proposition—on its own—is just a few sentences that describe the very basic reasons that will most likely cause your prospects to choose you over your competitors.
And that’s what many people (even “experts”) think a value proposition is all about.
But that’s not entirely true.
All that’s great, yes. But it actually isn’t everything in a truly refined value proposition. You need to take it a bit further before you even start developing the second part of your value proposition (that’s coming up).
Refining your value proposition from the core takes some work:
- You need to define the most important benefits—those foremost in your buyers’ minds—that the core ideas deliver.Most people come up with a list of core ideas that are essentially just features (e.g., cheap price or best quality). If you don’t figure out the most valuable benefits of those features, you’re losing most of the potential. And no, you don’t need to identify all the benefits–just those that make the difference.
- You need to find the words that resonate with your target audience. You’re likely to describe the core ideas (and the benefits they deliver) very differently from how your target customers describe them. If you don’t match their wording (and arouse the emotions that go along with it), you’re losing most of the ideas’ power. Sure, you can match the wording in your marketing messages when you write your ads etc., but that often leads to a lack of cohesion in messaging.
- You need to remove the buyer’s need to look for alternatives.You can have a strong value proposition, yet prospects will still look for alternatives. That is, unless you take away the need and urge to seek alternatives.
But even if you develop the core in just the right ways, it’s almost useless without the other part of your value proposition.
2. Support for your value proposition
This is the part of a value proposition most people don’t know about. And most of the few who know about it forget it or get it wrong.
Your value proposition–just like so many others–will go largely to waste if you don’t get this right.
The first part describes your product’s or service’s value.
This part gives people a reason to believe your offerings are as valuable as your basic message makes them out to be.
It’s easy to come up with a great promise.
But delivering it can turn out to be difficult.
If people don’t believe you can deliver what you’re promising, they have no reason to pay any attention to you.
There are a few basic ways you can make an otherwise hard-to believe promise solid and believable
- Be specific.People probably don’t think you’re a liar. Still, they won’t believe a vague claim. But if you make a very specific claim or promise, it becomes believable. For example, “The largest online shoe store” has little meaning; it’s considered “marketing talk” and forgotten almost instantly. But “Selection of 56,487+ pairs of shoes” is specific enough to have an impact.
- Show the proof.Is there a study that proves your claim? Or can you easily show the logic behind what you’re saying? Try to first introduce the proof for a claim before making the claim. For example, rather than saying, “This treatment cures cancer. There’s a study of 1,000 patients…” say, “According to a study of 1,000 patients, 95% of cancers can be cured with this treatment.” Starting with proof creates an expectation of truth. Starting with a huge claim makes people suspicious about everything that comes after that.
- Guarantee it.Can you guarantee the results you’re promising? If you don’t believe you can deliver results strongly enough to guarantee them, why would anyone else believe you? But because of guarantee blindness, the usual 30-day money-back guarantee doesn’t make a big difference anymore. For example, I guarantee improved conversion rates if you follow the advice I give, and I give you your money back doubled if you don’t see a significant increase in your conversions.
- Provide an easy way to test it.A free trial, demo, or anything that allows people to experience first hand that you’re telling the truth takes away doubt better than almost anything else. For example, Optimizer offers a free trial without credit card information. That ability to test the service instantly without any big commitment takes away the need to make big claims as people can experience them firsthand.
- Let someone else speak for you.People are so accustomed to inflated promises in marketing that your word is rarely enough. But when someone else speaks for you, people have much less cause for doubt. Testimonials and endorsements from recognized and respected experts are especially good at building trust, though testimonials from customers work very well too. For example, I rely on testimonials from marketing experts (some of whom are clients) to build trust on my home page. If I said the things they say about me, few people would believe me.
There’s no one ideal way of proving your claims. The right approach differs from situation to situation.
Plus, you usually need to use different methods to prove different parts of your value proposition.
And you need to get it right. If people don’t believe your value proposition, you might just as well not have one at all. And your potential customers will choose one of your competitors who have a strong, believable value proposition.
You have more than one value proposition
As I said before, a strong value proposition is a believable collection of the most persuasive reasons your target customers should do what you’re hoping they will do.
Everything you ask people to do—from opting-in to an email newsletter to investing in your highest-priced product—should have its own value proposition that makes that action compelling.
I won’t get into much detail about this concept right now (stay tuned). But here’s an example:
- Someone uses Google to find a specific kind of product.
- They see your AdWords ad in the search results and decide to click it.
- They land on a sales page for your product and decide to buy it.
The ad has its own “action value proposition” (AVP) that makes it the best option of the links people see.
And the product has a “product value proposition” (PVP) that makes it worth buying, which is communicated with the sales page.
But don’t think about those before you’ve developed a solid “business value proposition” (BVP), which is the reason people should even listen to you in the first place (and what I’ve been mainly talking about now), since all the other ones are derived from it.
For example, your product’s PVP is derived from your BVP. And the AVP for your AdWords ad comes from the PVP.
Since all other marketing efforts depend on a strong business value proposition, you’ll struggle to get any of the other ones right if that BVP isn’t just right.
Create a strong value proposition (and learn to use it)
Creating a strong (business) value proposition is the most important task any business, including yours, will ever undertake.
When it’s strong and refined and you know how to use it, it gives you a seemingly unfair competitive advantage against your competitors.
You should create it as soon as you can, ideally right when you start building your business.
But it’s just as beneficial to businesses that aren’t new. Some of the biggest companies in the world are heading toward bankruptcy because they haven’t done a good-enough job creating their value propositions. Re-defining it, though, could make the difference between sinking and swimming.