How To Create A Killer Value Proposition
A great value proposition is always customer centric. Your audience must be able to see themselves in the copy, on the page, or in the content you’ve published online. Your audience must have a strong understanding of who you serve.
You might also enjoy these articles:
Introduction
When it comes to championing your brand, nothing is more important than crafting a meaningful value proposition that speaks to customers. Despite this, many business leaders are unaware of the weight a great a value proposition carries.
I recently spoke with Green Light Copy founder Eden Bidani, whose agency works to assist businesses in developing smart messaging strategies that lead to better customer conversion rates.
In addition to her marketing background, Bidani is also trained in anthropology and sociology, which have informed her worldview and taught her how to connect and relate to audiences in authentic, meaningful ways.
During our time together we spoke about how all organisations should strive to create killer value propositions that target audiences by putting customers and results front-and-centre.
In this article we discuss:
Understanding value propositions
Why crafting a killer value proposition is key
What makes a great value proposition
What a value proposition isn’t
How to craft your own killer value proposition
Why crafting a value proposition takes time and effort
1. Understanding value propositions
Let’s start with the basics: how do you go about defining a value proposition?
While there are many ways to describe them, a standard value proposition usually involves a short statement that encapsulates why your customers would choose your product or service over a similar service offered by another brand.
“There’s kind of a basic formula,” says Bidani, who believes a great value proposition starts with a simple sentence built from three distinct parts:
1. I help [insert audience] 2. to achieve [insert result] 3. by means of [insert product or service].
“So, a good value proposition… it’s really connecting the three different elements together — connecting the audience, connecting the result or outcome that you’re able to help them achieve, and then connecting the product or service by which your business is able to help them.”
This isn’t to be confused with a unique selling proposition (USP), which is a single differentiating factor that makes a business fundamentally different than any other organisation.
“A unique selling proposition says: what is the one offer or outcome or audience that this particular business helps — or the result they’re able to drive — compared to any other business that could potentially do the same thing as they do.”
2. Why crafting a killer value proposition is key
When it comes to determining the strategic worth of value propositions and USPs, Bidani believes crafting a great USP is the most important thing a business can do to determine its own narrative but creating a killer value proposition is a close second.
“A USP is king because that’s what helps customers determine what your company does differently than others, and that helps them really make that final decision between different businesses in the same field.”
“Value propositions, though, are a close second because they really help the audience. They help them understand why you are good for them and how you can help them.”
Value propositions are uniquely good at helping align consumers with a business, irrespective of where the customer may be in the awareness stage of a campaign or customer journey.
If customers are looking for a solution, or looking for something to help them with a specific problem, they know that your business and product can help them.
Alternatively, if customers are unaware of a pain point or problem, they understand that customers who struggle with problem ABCD, your business can help them.
“Customers see themselves in a value proposition, and that makes them able to connect with the company, which in turn helps them generate curiosity and engagement.”
In other words: value propositions are important because they clearly define for an audience what their pain points are while simultaneously providing them with a way to remedy those paint points.
And killer value propositions convince consumers that a single company — ideally, yours — is the best possible option for solving for the challenges you’ve outlined.
3. What makes a great value proposition?
We’ve outlined what a value proposition is, and why it’s important.
But what’s the best way to go about delivering as much value (no pun intended) as possible through your value proposition?
How do you take a boilerplate value proposition and turn it into something that drives conversion?
Bidani believes the best place to start is by putting the audience front and centre. “A great value proposition is really something that’s customer-centric,” she says.
“We're really looking at making sure that the audience has a strong understanding of who you serve. So, they can see themselves in the copy, they can see themselves on the page or in the content that you have published online.”
Bidani argues that the product or service, or how you deliver the value proposition, is something that can vary. So, if we look at the core formula again… that formula should be connected to the product, but the product is secondary.”
In other words, it’s important to prioritise the audience over the way in which you deliver customers value. Let’s look again at our value proposition formula, which is:
1. I help [insert audience] 2. to achieve [insert result] 3. by means of [insert product or service].
Let’s now modify that formula to emphasise the audience and their unique customer journey.
Our new equation will be more specific, and it will also place emphasis on the results customers should expect when they use your services or product. With that taken into consideration, a customer-centric value proposition might look like:
1. I help [insert specific, custom-tailored audience] 2. to achieve [insert transformational result] at an accelerated rate 3. by whatever means necessary.
Notice how the means are less important than the first two aspects of the value proposition?
Bidani thinks that this is how companies differentiate themselves — not by the way through which they help their consumers, but by delivering specific, exceptional results.
“Companies add new features, they add new services, they add new elements to their offers,” she says, “but I think the real core of that is nailing down the audience and nailing down the results you’re able to help customers achieve.”
If you’re enjoying this article, listen to the full podcast conversation on Experimentation Masters
4. What a value proposition isn’t
Just as it’s important to clearly define what your brand’s value proposition is, it also pays to know what a value proposition isn’t.
Bidani mentions that a value proposition is not a feature, nor is it a product or service your company offers — unless that product or feature or service is what differentiates your company from other players in the same market.
“Again, as we mentioned, services and products and offers change all the time, people add new features to SaaS products, they add new products to a line of haircare products or change the colors of buttons on their fashion lines, or they upgrade the hardware on a machine or device. But it’s not about that,” Bidani says.
Another thing that’s worth pointing out is that value propositions are not the same as mission or value statements.
“So, it’s definitely never a slogan,” Bidani continues. “It’s never a tagline, or anything you’d find in a mission statement. It’s not really something you’d find in a strategic narrative or a brand story, because they’re internal. And they usually don’t go into the depth of describing and unpacking all the different value propositions that exist within a business.”
5. How to craft your own killer value proposition
How do you gain the knowledge needed to write a value proposition that means something to customers?
There are six key steps involved:
1. Conduct customer research
2. Unpack research insights
3. Formulate hypotheses
4. Perform competitor analysis
5. Identify a point of differentiation
6. Test your value proposition
You may choose to perform some of these steps in parallel.
Step 1 – Conduct customer research
Qualitative customer research
Thanks to her extensive background in anthropology, Bidani knows that meeting customers where they’re at — and really working to understand their specific needs and challenges — is key to creating a value proposition that sticks.
“I have two absolute favorite methods,” she says. “I like having time to speak with customers one on one as much as possible, and then I also like running anonymous surveys. So, I try to balance the two, while drawing on my studies in anthropology to interview people one on one.”
Of course, not everyone has time to gain a degree in anthropology — but Bidani says there are simple tips for anyone who wants to conduct a meaningful interview with customers.
“Get curious and ask them lots of questions. Have them really unpack what was happening in their lives at the time when they first realised that they needed help solving a certain problem, what they were looking to achieve, and then how they came across the product. How they discovered it, what that process looked like, the decision-making process that they went through, and how much time they spent in evaluation… just really being able to sit with them and understand all those elements of the journey gives you a wealth of information.”
Unpacking all those elements of the customer journey gives you a wealth of information about their problems, about their needs, about what transformation in their lives they’re ultimately looking for.
Bidani suggests that anywhere between 5-10 solid customer interviews will provide strong qualitative insights.
Quantitative customer research
Bidani likes to combine qualitative customer interviews with large-scale quantitative surveys.
As far as anonymous surveys go, Bidani believes they help provide information in aggregate to help uncover larger trends.
At the same time, people often feel more comfortable sharing personal information anonymously, which can lead to better information and results.
“Giving customers privacy lets them open up. So even if you have a survey that takes just five minutes by email, people will be more inclined to share their experiences.”
Bidani often asks the same questions in the customer surveys as were asked in the customer interviews. This is important as it allows you to compare the rich qualitative research and voice of customer feedback with quantitative insights.
Step 2 – Unpack research insights
Once you’ve completed all your customer research its best to get the data and insights into one working file.
Bidani recommends logging the data into one spreadsheet, splitting the data up by customer sentiment, problems, or different elements of the value proposition.
The process of logging the data in a spreadsheet provides clarity.
“You're able to sit back and have a look at the data, look at the patterns, see how many times people express a specific sentiment or how many times people express they were looking for a result fix, or how many times they were describing a particular feature.”
Step 3 – Formulate hypotheses
Next, it’s time to stack rank the different themes or customer sentiments in order of importance.
This step is important as it enables you to formulate your initial hypotheses. You’re aiming to establish a hierarchy of needs for your audience.
Identify the theme or sentiment that most customers have talked about – this is the top priority. The second theme that most customers mentioned was X, this is second highest priority. The third highest and fourth highest priorities were … and so on.
“When you bring the qualitative and quantitative research together, you have really strong hypotheses about which value propositions you should move forward with.”
Step 4 – Perform competitor analysis
Your competitor analysis is something can be run in parallel with your customer research.
Rather than analysing competitor messaging and copy verbatim, Bidani suggests performing a SWOT analysis, Strengths, Weaknesses, Opportunities and Threats on direct/indirect competitors to understand differentiation.
There’s a reason for this approach.
“You never know how well competitor messaging is actually working for them, you have no idea how strong their value propositions are. You have no idea what is going on in the company. You have no idea what is actually driving their success.”
So, it’s better to have a general understanding of who your competitors are, what they do and how they are speaking to their customers.
Your customer research will highlight what’s most important to your audience, and how you can differentiate your proposition, while considering what your competitors are saying.
Remember, don’t lose sight of what your audience is looking for.
Step 5 – Identify a point of differentiation
This is the point where everything needs to come together.
You need to figure out how you can perform business activities differently or better than your competitors.
Being unique is always going to be a more sustainable approach than trying to perform business activities more effectively. Operational effectiveness is easily copied and imitated by competitors.
How can you play a different game, one that your competitors can’t play? Markets are crowded. You need to stand out. Why should your audience give you their attention?
This is where your competitor research comes in handy.
Bidani suggests that, “you’re looking to map out the strengths of your company, relative to the strengths of the competition. How are your competitors targeting their audience? How are your competitors speaking to their audience?”
From your customer research, what are the things that customers really like about your company? You need to look beyond your product and product features.
There are many ways that you can differentiate to get the attention of your audience - Customer Service, Cost, Safety, Convenience, Niche Market, Quality etc.
“There’s lots of different points of differentiation. They don’t have to be huge. They don’t have to be bombastic. As long as you can find those points of differentiation, that’s going to help solidify the value proposition, especially the USP.”
Once you’ve identified your point of differentiation, go all in.
Step 6 – Test your value proposition
Test your value proposition so that you can understand which framing resonates the strongest with your audience and converts the highest.
You’ll likely need to test multiple variations of your value proposition before hitting on a winning combination.
Conducting fast, low-cost experiments using Marketing entry points is a great way to test and refine value propositions with customers. Use EDM’s, social media campaigns, Google AdWords campaigns and landing page experiments to test and learn with your audience.
Aim to gather quantitative data from experiments to guide value proposition design and decision-making, avoiding opinions and speculation.
Bidani also recommends user research to test new value propositions.
“Performing quick user tests, where you have a hero section mocked up with the headline, sub-heading or core value propositions. It’s a really good way to get a gauge on how clear the value proposition is. And it’s not just if the value proposition is speaking to them, but how clearly it is communicated.”
6. Creating a powerful value proposition requires time and effort
While it’s one thing to tout the importance of developing a killer value proposition, crafting one is easier said than done.
Understanding your customer needs, pain points and aspirations in depth must be your top priority. Profitwell suggests that 70% of SaaS companies aren’t talking to their customer regularly. There needs to be a big shift in mindset.
Talking to your customers is something that should be programmed into your operating cadence, whether weekly, monthly, or quarterly.
Conducting effective customer interviews requires skill. Most importantly, qualitative research requires practice. The more proficient you become, your capability and confidence will improve, leading to better outputs.
The marketplace is constantly changing. Staying close to your customers helps you to have more clarity on what you should be focusing on.
Need help with your next experiment?
Whether you’ve never run an experiment before, or you’ve run hundreds, I’m passionate about coaching people to run more effective experiments.
Are you struggling with experimentation in any way?
Let’s talk, and I’ll help you.
References:
Before you finish...
Did you find this article helpful? Before you go, it would be great if you could help us by completing the actions below.
By joining the First Principles community, you’ll never miss an article.
Help make our longform articles stronger. It only takes a minute to complete the NPS survey for this article. Your feedback helps me make each article better.
Or share this article by simply copy and pasting the URL from your browser.