Value proposition is the explanation of your products/services’ benefits. In simple terms, it is a demonstration of the advantages that your products have compared to your competitors. It is an answer to customers’ questions “What value do I get from using your product?”, or “Why do I have to choose your product?”.
Marketers often focus on value proposition in their campaigns and advertising efforts. The reason behind this is clear – you want to make a person want your product because it is useful or helpful to them. Our article acts as an in-depth guide on the value proposition for marketing strategy.
What Is the Value Proposition?
Value proposition demonstrates your products’ key benefits. Value proposition also sets the product or service apart from the competing options on the market. We could encounter it in various different forms and many different types of content, but the goals are the same. The three main things you want to achieve in your value proposition are:
- Explain the benefits of your product/service
- Solve a specific customer problem or pain point
- Demonstrate a unique selling point or competitive advantage
Marketers pay a lot of attention to formulating the value proposition. It should be very clear and very objective and should not sound overly promotional. Your statement must reflect your brand’s tone of voice and be based on emotional intelligence best practices. The value proposition is not the same as a slogan or tagline, it is more like an objective description of your product’s qualities and benefits.
What Is an Example of a Great Value Offer?
A great value is a bit tricky to define. It is a subjective term and many people have different perceptions of values. For example, someone may find 10 USD for 150 Instagram followers a great value (especially ones that have little knowledge of market prices), while others consider it expensive. So, the understanding of the value will vary from customer to customer.
The most effective way to offer great value is to look at the competition. If you can offer cheaper rates, higher quality products/services, or additional benefits (like complimentary products) compared to your rivals, you are offering great value.
Many people consider promotions and discounts to be a great value, as well. When they are getting $40 worth of product for $25 they believe they are profiting from it. But the value is not all about money. It could be a premium quality product, exclusive service (not found with the competitors), expert help (with a high customer review rate), etc. The below sections talk about tips to offer and provide great value to customers.
How To Provide Value
Providing value is not easy. However, it is the goal of any successful marketing campaign. In inbound marketing, the value proposition is the first thing that marketers work on – they determine unique selling points and benefits they have compared to other products and services in similar categories.
Think about the following questions when you are writing a value proposition statement:
- Is your product or service a necessity? (or a luxury item)
- Does your product or service solve any of the customers’ problems or pain points?
- Is your product or service unique?
- What is the quality of your options compared to competitors?
- What differentiates you from your competitors?
- Why should a person choose your product or service and what do they get in return?
- What are the alternatives to using your product or service?
These questions will help you understand your products’ value and think like a customer. Keeping them in mind will help you create valuable but also genuine statements that will gain you trust of your target audience.
Value Proposition Formula
Developing a strong value proposition formula is a crucial part of any business. This is a statement that tells the audience what your product does for them in terms of meeting a specific need or range of needs. It’s a promise of value to the market, and it can also serve to inform the direction of a business.
Customers want to know what they’re getting for the money, and the value proposition establishes this. There are a few important elements to a strong value proposition formula. The first is positioning. You have to create a connection between your product and the audience’s needs. This alone can help to establish value in their minds. Next, you must clearly outline what you’re offering and how it differs. After this, it’s important to quantify the value.
There is no scientific formula for writing a value proposition, but the general structure looks like this:
This [product or service] helps [target audience] [benefit / solve the problem] by [differentiation / unique selling point / competitive advantage].
How Can the Value Proposition Help Marketers?
The main purpose of a value proposition is to maintain a competitive advantage. You highlight your strengths compared to your rivals and that difference can be a reason person may buy from you instead of looking elsewhere. However, there are many more benefits that marketers gain by brainstorming product/service benefits and values and creating a value proposition statement.
To know where you stand
The value proposition can become part of your brand image and help you understand your brand better. It tells a success story and introduces the strong side of your brand. Together with competitive analyses (often accompanied by SWOT analysis), you get a clear picture of where you stand in your industry.
Here is how a value proposition statement makes your position on the market clear:
- Competitive advantage – is your product/service better than those of competitors?
- Unique selling point – does your product/service feature something that no other competing brand can offer?
- Quality and price – do you produce better quality? How do you compare with your rivals in terms of pricing?
To know who you’re targeting
The Value Proposition is about knowing your audience. It’s about understanding who you are and what you want to accomplish with your brand. It also clears things up by showing the challenges your customers are facing.
The best way to create a value proposition is to understand what your customers want and need. Marketers analyze the demographics and psychographics (their personality characteristics) of their buyer personas before writing a value proposition. This way, you have a better understanding of the pain points and challenges they face. Afterward, you can think about the ways your products and services make their lives easier, solve specific problems, or complement their lifestyles.
You also learn a lot about how to communicate with your audience – their preferences, the language they use, how they interact with different digital channels, etc.
To position yourself as the best solution to their problem
Position yourself as the best solution to their problem. Show your marketer how you are the best solution to their problem. Give them a reason to choose you over your competitors and reinforce that position by pointing out examples of other companies who have done what they want, or have failed in doing so, leaving them with no choice but yours.
The value proposition is very similar to a promise that you make to your customers, and it’s what makes them want to work with you. Relationship marketing is entirely based on this principle. Trust is the foundation of any successful marketing relationship, but it can be hard to build trust when we are dealing with strangers online or in person.
When creating the value proposition for your product or service, focus on three things:
- quality (the product or service)
- consistency (the way that it’s delivered)
- transparency (how much information about what they need is provided)
If these three components are present in every interaction between yourself and potential customers, then people will feel like they’re being treated fairly.
Crafting an Effective Value Proposition
The value proposition is not the same as a promotional copy. It does have a lot in common with taglines and slogans, but the purpose of these concepts is very different. The main goal of a value proposition is to clearly define the benefits your customers get from choosing your products and services.
There are many elements that marketers use in the creation of an effective value proposition. For example, they may incorporate components like:
- Bullet points (product features, benefits)
- Images and illustrations
- Videos (testimonials, product videos, and other types of video marketing techniques)
- Creative copies
- Call-to-action (CTA) buttons
Examples of Successful Value Propositions
Now let’s look at some examples of successful, differentiated value propositions. A well-known classic example is Coca-Cola’s “The Real Thing,” which communicates the idea that no matter what, Coca-Cola is a timeless and unchanging product. Walmart created “Save money. Live better,” which conveys a message of affordability and value. Tesla’s “Accelerating the world’s transition to sustainable energy” paints a clear vision of the company’s mission and values.
All of these examples demonstrate the power of the differentiated value proposition—if it’s done right, then it can represent your brand on multiple levels. You can emphasize product features, talk about customer benefits, and even bring out your core mission and values. Your value proposition should make people feel something—it should be emotive yet concise, and able to capture the essence of your company in just a few words.
Evaluating Your Current Value Proposition
Now that you know all the basics of a value proposition, it’s time to evaluate your own. Ask yourself if the value proposition you are offering is clear and concise and if it matches the goals of your brand. Additionally, take some time to look at your competitors and see what kind of value propositions they have.
A great way to get an objective view of your value proposition is to have someone else read it and provide feedback. Listen to the feedback, take notes, and make adjustments based on their comments. However, make sure that your adjustments don’t distort the main objective of a value proposition.
Finally, be sure to test it out with customers before launching it. Set up surveys or one-on-one interviews to ask them how they responded to each element of the value proposition. Ask open-ended questions so that you can gain valuable insights into their thinking process. This will give you a better understanding of how people perceive your brand. This in turn may help you come up with a stronger value proposition and maximize its effectiveness.
Tips for Developing Your Value Proposition
Developing an effective value proposition demands a bit of creativity. Here are a few tips that can help you craft one that hits the mark.
- Focus on the specific needs of your target audience
- Understand their wants and pain points
- Make it clear why they should choose you over other competitors who offer similar products or services.
- Highlight how your product or service can satisfy them or solve their problems
- Make your statement simple and concise
- Come up with something that’s easy to remember and makes an immediate impact with clear and direct messaging
- Avoid industry jargon, as well as any overly technical language
- Test different variations of your value proposition (use surveys, A/B testing, or customer interviews)
- Measure the success of your value proposition
