“First, you must have entrepreneurs who fully grasp their customers. They understand their product so well because they themselves are customers. The second thing is having an awesome value proposition.” Craig Sherman
As a business owner, you know that your success depends on your ability to create value for your customers. But what is your value proposition? And how do you ensure it’s front and center in everything you do? This blog discusses the importance of a business’s value proposition and shows you how successful companies have put them into action.
What is a value proposition?
A unique value proposition is an actionable identifier for your business that communicates why a company exists. Without it, buyers won’t have a reason to buy your product or Service. An Organization’s value proposition provides a declaration of intent or a statement that conveys a company’s purpose to consumers by explaining to them:
- What problem(s) the product solves
- Who the product is intended for
- What valuable benefits the product offers (versus alternatives)
- How the benefits make your business better and more competitive
- How the solution is different from the competitor’s
A company’s unique value proposition communicates the purpose of what it sells and the benefits to a select segment of consumers. Companies display their value propositions compellingly and prominently on a company website and in other relevant venues.
A strong value proposition must be intuitive so that when customers read, hear or experience them, they immediately recognize their value without further explanation.
How a great value proposition can make a business successful
A great value proposition is the unique value businesses offer customers that competitors do not or cannot. Great value propositions communicate to a targeted segment of people why they should buy from you and not from the competition.
In short, it is the strategic component of your business model that makes your products and services compelling to your target audience.
Value prop vs. Mission statement
The difference between value propositions and mission statements:
Value propositions concisely communicate the value of a product or service to customers and why they should buy it. It explains why a business is unique and the best among competitors.
Conversely, a mission statement is a statement that describes a business’s purpose for existing in simple terms. It defines a company’s values, culture, goals, ethics, and plan.
The proposition of Value: Examples from Successful Companies
A Company’s unique value proposition is probably the most critical component of its communication & marketing strategy. As will be shown below, a value proposition tells potential customers why doing business with a company confers advantages versus competitors. Here are some examples from successful businesses:
Starbucks Value Proposition
Starbucks offers customers the finest coffee produced by themselves, with a strong commitment to creating a global social impact, served in stores that promote a welcoming and warm atmosphere where everyone can feel “like home.”
Walmart’s Value Proposition
Walmart’s value proposition reflects its business policy: It provides its customers with a wide variety of products, at the lowest price and in the most convenient way possible.
Winners’ Value Proposition
At WINNERS, value combines brand, fashion, price, and quality. Unlike traditional retailers, we generally don’t do promotions, sales, coupons, or other gimmicks – Just exciting merchandise at amazing prices every single day!
McDonald’s Value Proposition
McDonald’s is famous for its value proposition: food of a consistent quality that is served quickly and consistently across the globe.
Apple’s Value Proposition
Every iPhone we’ve made — and we mean every single one — was built on the same belief that a phone should be more than a collection of features that, above all, a phone should be absolutely simple, beautiful, and magical to use.
Microsoft’s Value Proposition
Microsoft’s Value Proposition – Small business: productivity. Large business: competitiveness. Public-sector: efficiency.
Amazon’s Value Proposition
Amazon’s business model is based on three value propositions: low price, fast delivery, and a wide selection of products.
TimeWellSchuduled’s Value Proposition
TimeWellScheduled is a: “is a complete scheduling solution you can rely on year-round to optimize staff hours, communicate shifts times, manage staff information & payroll all in one user-friendly, cloud-based system!”
Click: here to learn more about how we can add value to your business!
The Value proposition explained
As the above examples demonstrate, a good value proposition summarizes the measurable and emotional benefits or results customers can expect when they purchase products or services from your business. It focuses on the benefits that make the company stand out from the crowd and the unique value it provides.
Note: After reading each of the above value proposition examples, ask yourself if it matches your perception of the company.
What a value proposition is NOT
To Clarify: a value proposition is not a promotional slogan, incentive, values, or mission statement, as mentioned earlier. These are high-level concepts. In contrast, a value proposition is a functional statement that quickly strikes at the heart of the problem customers need to solve and the reasons why the solution provided by a business offers the most value.
- A great value proposition is different from a slogan or positioning statement
- 69% of B2B firms have established value propositions
- A good value proposition can be read in under 5 seconds
- 52% of companies have different value propositions for different products or services
Tagline/Slogan vs. Value Proposition
The tagline is form; a value proposition is a function or purpose. A slogan is symbolic; a value proposition is literal/actionable.
Taglines and slogans are used for advertising and promotion, whereas value propositions define the value a product or Service offers a customer.
Take, for example, these taglines and slogans:
- “Just do it” – Nike
- “The World on Time” – FedEx
- “Real Service. Real Savings” – Geico
- “Think Different” – Apple
Strong versus Weak Value Propositions
Below are some value propositions examples that do not concisely communicate value:
- “We are dependable, fast, and provide good service.”
- “It is the best system on the market today.”
- “We have the best service and price.”
- “Dedicated to our customers.”
- “Our Customers love our selection.”
Here are some value propositions examples from successful companies:
- “Do things faster, collaborate more efficiently, increase productivity.”
- “Be More Productive at Work with Less Effort.”
- “Provide quality entertainment to its users, 24/7.”
- “Move packages from one point to another for a better price than anyone else.”
- “Innovation in vehicles, innovation in batteries, and innovation in infrastructure.”
Things to consider when developing your unique Value Proposition:
The value proposition is the constitution of a company that guides its efforts toward providing the highest value to a specified customer base. For example, when managers and employees are in doubt, a concise value proposition can advance the effectiveness of a company’s marketing efforts, ensure that resources are allocated to the right processes, and guide the decisions and plans of managers and employees in everything they do. Therefore, spending time defining your company’s value and connecting it to all promotional activities is important.
Points to consider when developing your compelling value proposition:
Who uses your product?
- Know your target customer; these are the customers who the product is designed for.
- The product or service exists to solve a problem (need or desire).
Identify your customer’s main problem.
- Know the problem(s) your product or Service is designed to solve. This is the reason your product or Service exists.
Identify all the benefits your product offers.
Examples of possible benefits a product or Service provides:
- Better communication
- Reduces time to completion
- Enhances the gathering and managing of information
- Eliminates mistakes
- It adds fun to the experience
- Saves time and money
- Increases capacity, efficiency, and productivity
- Healthier and safer than the alternatives
Describe what makes these benefits valuable.
Examples of value-added benefits:
- easy to use (user-friendly)
- faster than people or older systems
- cheaper than alternatives
- Lasts longer (more durable) than alternatives
- More Reliable than alternatives
- Consistent, predictable vs. Rival companies
- More accurate than people or alternatives
- More Flexible than alternatives
- Better Service compared to rival companies
- Solution fixes one or more problems (better than expected)
Connect this value to your buyer’s problem.
- Demonstrate (concisely) how the product’s benefits solve the customer’s problem in a value-add way.
Differentiate yourself as the preferred provider of this value.
- How does the sum of these benefits make your solution different from the others?
Note: the above model can be used to develop value proposition templates and value proposition examples.
Every successful business knows and lives by its own value proposition – it’s what sets them apart from the competition and drives customers to them. This blog discusses a value proposition and explains how to create one for your business. We’ve also provided examples of firms that have successfully developed their great value propositions.
If you want your business to succeed, take the time to create an effective value proposition that communicates what makes your company unique and valuable to your target customer. So don’t wait – start crafting your company’s unique selling point today!
Thank you for reading our article!
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