Providing value to your customer is everything in business.
Most small business owners believe that the value they provide to their customers is the products and services they deliver. In fact, a well-defined value proposition outlines to the customer how the company’s products and services solves a problem and improves their daily life.
A value proposition is much more than a slogan or a wordy explanation of a business’s offerings. The value proposition simply answers the questions that every customer asks before making a purchase. Why do I need this? What’s value am I getting out of it? What problem is this solving for me?
A solid value proposition makes it impossible for a customer to pass up the company’s offering. It also outlines specific benefits that the customer can enjoy from their purchase, and positions the company top of mind.
An interesting value proposition example is that of Uber. Uber has two main customer segments — drivers and passengers. The value Uber provides their drivers is a way to earn money with flexible work schedules and easy payment procedures. For passengers Uber delivers on-demand taxi service that is cash free and at a lower price than the competition. These are all of real value to the customer.
Creating a value proposition does take significant effort and time but is well worth it. When thinking about building a value proposition a few types of value to consider are newness, convenience, customization, status, cost savings and status building. Also, consider specific types of benefits customers can expect and be able to answer why customers should by from you and not the competition.
Here are some easy tips for defining your value prop.
1. Identify value in simple terms related to human nature. Think of human needs and how your product and service meets those of your customer. This can include time savings, cost savings, status or newness.
2. Define the problem you solve. Try to look deeper at what you actually help your customer with and what “job” they are hiring you to do.
3. Differentiate and position yourself creatively. Be clear about what your competitors offer and of course how you are different. It’s the difference that can make your products and services compelling.
Remember, a great value proposition is clear, communicates a specific result to the customer and solves an actual problem, and your slogan is definitely not your value prop.
Christie Wilson is an entrepreneur advisor at Medicine Hat College and the APEX Entrepreneurship Incubator.
