Is Your Value Proposition a Brilliant Diamond—or a Dull Rock?
Can you describe, in 20 words or less, the way you deliver value to your ideal clients in a way that is remarkable and truly differentiating?
Many business owners struggle to clearly articulate their fundamental value proposition. Usually this is because they are focused on building their business with an ‘inside-out’ point of view.
What we mean by ‘inside out’ is that the business is so focused on what they do and how they do it, that they lose sight of whether any of this matters to the customer. Or, worse, the business misses who their right fit customer really is.
The end result is a value proposition that lacks clarity, much like a rough diamond before it is shaped and polished into a stunningly unique gem.
Just like diamonds, value propositions need to be unearthed, polished, then presented to the world. Most B2B businesses don’t put this level of energy into developing a crystal clear value proposition that stands up to pressure.
Identifying what truly makes your brand different can be challenging, but it is definitely time well spent. Before spending your first dollar on marketing tech, advertising and sales commissions, your best investment is in honing your value proposition.
Let’s walk through how to know if your value proposition needs work and some practical techniques you can use to sharpen a dull value proposition to make it shine.
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What is a Value Proposition, Really?
We find many businesses have weak value propositions because they don’t understand what a value proposition really is. So, let’s start with a definition.
Your value proposition connects your business model to customer benefit. It answers the following questions in the minds of customers: why should they choose you over other options, and why now?
A well-crafted value proposition helps you cut through the clutter of your market and get the attention of the right people at the right time.
It is expressed and used in two key ways.
First, as the front door to your brand with new customers and partners, at the top of your website and your company overview. It will be front-and-center and kick off your brand story.
Your value proposition should also be infused throughout your entire business cycle. This includes all commercial, operational and hiring activities. All of your employees should carry it proudly and loudly, not just marketing and sales.
The Connection Between Value Proposition and Customer Experience
Your brand is built upon a promise to deliver on your company’s stated mission and goals, which translates into a particular value proposition for the customer. Your brand expresses to the market what prospects and clients can expect from your services.
Ideally, it fulfills (even exceeds) the expectations they bring, even before the relationship begins. The promise – and your delivery on that promise — differentiates you from the alternatives. Your brand is derived from who you are, who you want to be and who people perceive you to be.
When the promise is met or exceeded, the result is positive experiences, and growth in revenue and brand affinity. So, in short, the connection between brand and experience is in ‘meaning what you say’ because you are delivering on what is promised, as a brand.
Warning Signs That Your Value Proposition Needs Work
We look for the following signs that a value proposition needs work.
Warning sign #1: un-remarkability
The first sign is that your messaging sounds like everyone else. When you compare your offering to competitors, how is it different? Does it stand out? When you have nothing to distinguish you from everyone else, customers are usually left to decide mainly on cost, if they can decide at all. In fact, in complex B2B services deals, many buyers end up sticking with the status quo, or delaying a deal, because they cannot confidently differentiate between the options. Being forced to compete on cost alone is not a situation most businesses want to be in.
Warning sign #2: chasing customers
In his book, Alchemy, Rory Sutherland says that there are two ways a business can create value. They can either create an offering, then go find customers for it. Or, they can first figure out what customers need, then design the offering to match. Either way can be successful. However, the business that chooses the 2nd, more customer-centric path, will find that their competitive advantage is more durable, and they won’t be constantly chasing customers that match their offering. And chasing customers (in other words, traditional lead generation) adds a lot of cost for the business.
Warning sign #3: inconsistency
A third warning sign is when you ask your team what they think your business’s value proposition is, you get different answers. If those most involved with your business don’t know or can’t express how you create unique value, then, it’s probably going to be hard for customers to see it.
Read more: How to Meet the Demands of Today’s B2B Buyer
Three Important Questions to Clarify Your Value Proposition
Now that we know how to identify a weak value proposition, let’s shift to how to fix it. To create a winning value proposition, begin by asking yourself these three key questions:
Who is your right-fit customer?
Your right-fit customer is simply the best customer type that will drive future value and growth. They are your most valuable type of customer because of the ideal match between their needs and your offering – and you have a differentiated approach to create value for them that they appreciate. Having this focus and a superior understanding of right-fit customers gives small businesses the advantage to ‘punch above their weight’ in terms of competing more profitably.
Many of our clients can’t articulate who their right-fit customer is when they first meet with us. Performing a deep dive into the criteria that make up your right-fit customer enables you to speak more directly with them and “punch above your weight” to compete more profitably in your space.
What are the strengths that set you apart?
To understand the unique value your business (or offerings) deliver, ask yourself:
- What are your core strengths, competencies?
- What sets your business apart from others that your right-fit customer would use?
What is the primary problem you solve for customers, and how will the customer be positively affected once their problem is solved?
For B2B services, your customers are probably looking for help to:
- Increase customer revenue, either through customer acquisition (new customers) or by increasing revenue per existing customer (LTV).
- Reduce costs—which in turn increases profitability.
- Reduce risk, such as through reducing human error, compliance risk, data loss risk, or order/shipping accuracy. Aiding in reducing risk is especially attractive to customers in highly regulated industries such as government, banking, and healthcare.
- Improve their customer experience. Does use of your offerings translate into better customer support, customer onboarding, and product/service experiences for the client’s customer base, either directly or indirectly?
What are your true differentiators?
A lot of businesses make the mistake of confusing features with differentiators. Another mistake we see often is using a list of strengths that most competitors would also have.
A strong value proposition is built upon true differentiators that meet 3 tests.
Test #1: Is it true?
It should go without saying, differentiators have to true and not be just baseless claims. Companies don’t typically intentionally fabricate their strengths. Instead, it happens incidentally when they assume a feature is a differentiator when it really isn’t.
Test #2: Is it relevant to customers?
Differentiators have be important and of value to customers, in terms of how they make buying decisions. Ideally it is something they cannot do on their own, or cannot do without.
Test #3: Can you prove it?
True differentiators are proved out in delivery and client success stories. Positive outcomes are quantifiable and verifiable. This is especially important for large scale deals where a business case has to be presented.
How To Build a Value Proposition That Shines Like a Diamond
Once you’ve given the above questions some thought, it’s time to craft your value proposition, into the form of an elemental statement for for further refinement.
A value proposition is not a list of features or a sales pitch. It is expressed as a short statement that clearly communicates the benefits that your potential client gets by using your service.
Define your strengths
Start buy defining your differentiating strengths — what sets you apart. Clearly define your team’s core competencies. These are competitively differentiated resources (capabilities, skills, brand) that create value for customers. Ideally, they are also sources of competitive advantage.
Connect your strengths to customer expectations
Next, list the ways your strengths can solve problems and provide benefit, success for customers.
As you think about this, consider the following questions:
- What are your customers’ biggest problems
to solve? - What does success look like for them?
- How does my offering satisfy their problems better than alternatives?
- What drives their purchase decisions
(emotionally and functionally)? - Why wouldn’t they purchase (i.e., their
objections, fears)?
Then, synthesize your strengths and problem solving benefits using this format:
We help [ X ] do [ Y ] by doing [ Z ], where:
X is your target customer.
Y is your feature(s)/benefit(s).
Z is what sets you apart from the competition.
Once you establish the key elements of our value proposition, you can get more refined with this next format:
Key Takeaways
- Value propositions are short statements which succinctly promise enticing value to your target customers in particular.
- Value propositions are the foundation of your entire marketing strategy. Even if you “do everything right” when executing a campaign, you might not see results if your value proposition is weak or non-existent.
- When clearly conveyed through marketing materials, a winning value proposition catches the interest of your right-fit customer, immediately sets you apart from competition, and results in improved KPIs across the board.
Does Your Value Proposition Shine?
Our customer-centric approach helps you build a value proposition aligned with what your customers believe in and expect. We clarify and amplify your differentiating sources of customer value through digital channels so you can ‘punch above your weight’ competitively.
Let’s get started!
Schedule a value proposition diagnostic today.
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