Imagine this. You need to purchase a new pair of shoes and you have two options. Both shoes have the same price and a similar look. So how do you decide between them?
While the shoes are essentially the same, there is one thing that sets them apart: their value proposition.
One pair of shoes markets itself as locally made with 100% vegan leather. The other pair of shoes has an ergonomic design that will let you wear them all day without getting foot pain.
Naturally, you’ll choose the pair of shoes that align with the value you’re looking for.
But it’s not only about paying more for quality. It’s about perceived value, too. According to Nielsen, more than 80% of product launches fail. At the root of the problem is either a disappointing product experience or a poorly communicated value proposition.
In this article, you’ll get a walkthrough of what a value proposition is and how you can create a good one for your business. You won’t need any fancy tools or in-depth marketing knowledge, either. You’ll simply grab your existing sales and analytics data and turn them into a value proposition machine.
We’ll show you how step by step. Let’s start!
Defining a value proposition is simple. It is a marketing technique that evokes a need in customers by highlighting unique features that differentiate them in the market.
In other words, it’s a way to package and communicate value to customers.
Why do you need it? Value creation itself is one of the main pillars of sales. Once you know your key values, you can start creating your value proposition.
A value proposition is more than just a one-liner catchphrase. It should be an integral part of your overall branding. The goal is to ensure a consistent experience for the end-user. With that said, it has become a common practice among businesses to place their value prop in the “above the fold” section on their website.
This way, the customer will immediately get a glimpse of your brand’s offering.
Here’s an example of a value proposition:
“Zero-waste groceries, delivered fast. Access 2,000+ quality goods plastic-free, at a discounted cost.”
This value proposition does an excellent job at addressing potential objections and expected customer needs, such as:
“I need zero-waste groceries”
“I need them delivered quickly”
“I’d prefer a greater selection”
“Cost matters to me”
Value proposition is also not to be confused with the concept of USP (unique selling point). USP is often used in internal-facing strategies and it helps define differences from close competitors. On the other hand, a value proposition is an external-facing narrative outlining how customers benefit from their unique offerings.
A great value proposition gives a clear idea of why the customer should pick you.
While simplicity is key, you should put considerable effort into creating the right value prop, as it can actually impact your sales metrics. Don’t go with the first idea that pops up. Here are a few factors to consider.
1. Sell the benefit of your product
What’s the main problem your product is solving? Start your brainstorming there. Ask yourself what makes your product or service stand out and how you can simply communicate the value to the customer.
Use a template like this if you’re stuck:
“We solve [problem] by providing [advantage], to help [audience] accomplish [audience’s goal].”
Let’s say you sell organic T-shirts hand-made by locals.
Your problem/benefit statement could be:
“We sell organic, local, hand-made T-shirts that will help our buyers look great while shopping eco-consciously.”
Then, put yourself in your customer’s shoes. What does your target market want? This could be your customer’s thought process:
“I need comfortable, ethically-sourced T-shirts from a trusted company.”
Then the starting point to your value proposition could be: “We offer comfortable, locally-sourced T-shirts that will make you feel like you’re wearing _______”
You can end that sentence with a descriptor that suits your brand offering. Once you’ve got your value prop, turn it into a phrase you can use easily. For example, Econic uses the brief but descriptive statement: “sustainable. ethical. Canadian.”
2. Stand out from the crowd/competitors
You likely have a handful or more competitors to keep you on your toes. So how do you stand out from the crowd?
You’re in business because you have a secret recipe to a product that others don’t. It’s time to play up on your unique offering in your copy.
Your value proposition isn’t just a statement about why consumers should buy a product like yours; it’s a statement that explains why they need to buy it from you over your competition.
So how do you create a value proposition that sets you apart?
Before you jump into a rigorous copywriting exercise, take a step back. Does your brand have a unique voice? If you already have a brand playbook, great! If not, it’s time to start crafting your own guide. Use a simple tone & voice generator tool to get started.
Once you’ve built a tone and voice for your proposition, list the key things that set your product apart from the competition. Ideally, you should consider three things:
The experience you give customers
Your product’s features
The benefits that set your product apart from others
Once you’ve listed these factors, draft as many value proposition marketing statements as you can. Then, compare these statements to your competition’s value props.
Do they set you apart?
If not, go back to the drawing board and rework your statements until you find the “one”. The perfect statement will feel authentic to your brand while setting you apart: like the statement “good done right” does for Wendy’s.
3. Use the right language for your target audience
The language you use in your value prop gives your customers a clear picture of your brand and what you value.
For example, consider Kewe Collective’s value prop: “responsibly sourced consciously created.”
While this value prop is only four words long, each of those words tells us critical things about Kewe Collective. For example:
“Responsibly” conveys that Kewe Collective understand their power as a large retailer and are acting for the general good
“Sourced” conveys that Kewe Collective have researched their entire supply chain and sourced their materials accordingly
“Consciously” conveys that Kewe Collective designed their production process around their values
“Created” conveys that Kewe Collective take a high degree of care during production
Imagine Kewe Collective swapped the words in their statement for synonyms and changed their value prop to ”carefully resourced intentionally manufactured”.
Would that change the impression the brand gave?
The lesson here is that the words you choose paint a picture of your brand, so choose them wisely.
4. Keep things clear and memorable
Which of these two statements stick with you more: “cheapest tools, every time” or “here at Mike’s Tool Store, we sell you the cheapest tools for the job every time”.
While these value props convey the same meaning, one uses only four words while the other uses sixteen words.
And as the first statement is snappier, people are more likely to remember it accurately: as our short-term memory can only hold 5 to 9 items at once.
When designing your value prop, you should focus on short, snappy statements. This means limiting:
Adjectives (i.e., choose “cheap tools” over “low cost, affordable tools”)
Hyperbole (i.e., choose “cheap tools” over “the cheapest tools in the world”)
Double negatives (i.e., choose “we have the cheapest tools” over “ain't no other stores got deals better than ours")
Ideally, your statement should use language clear enough for someone with a sixth-grade education to understand it: like “world-famous fried chicken” from KFC.
Brands with effective value props build them based on sales data, as it tells you what your customers are willing to buy. Here are a few ways to develop a value proposition from sales data.
1. Identify and leverage sales trends
Your perception of your brand can be vastly different from your customers. Though you may think that customers may value one thing, they may really value another.
That’s where sales trends come in.
Sales trends show you the preferences of the majority of your customer base, as customers will buy more products with desirable attributes and fewer products with undesirable attributes.
To discover your brand’s key attributes, rank your products from best selling to worst selling.
Then, look for commonalities among these products. For example, you may notice that locally made products sell better or that products that come with free shipping sell faster.
Once you have a list of common attributes popular with your audience, track how products with that attribute perform over a long period. That will tell you if customers favor particular attributes cyclically or all year round.
As in, do your customers prefer products in gift boxes all year round or just in December?
After you have this data, use it to build a value prop that’s consistent with the attributes your customers value the most.
2. Uncover customer/client pain points
Pain points are specific problems that customers want to solve. Pain points range from minor inconveniences (like “shipping was late”) to major disruptions (like “the product was low quality”).
Considering your customer’s pain points is a crucial step in creating your value statement, as pain points are problems that customers care enough about to try and solve. And naturally, the larger the pain point for the customer, the more they value it.
To determine what your customers value the most, sort through your customer complaints, customer return comments and negative reviews, and then identify common pain points in the feedback.
Unfortunately, you can’t solve all of your customer’s pain points, as many will simply be out of your control. Instead, focus on the pain points that you could feasibly fix and put a solution in place to resolve them.
Then, redesign your value props to match.
3. Build a detailed buyer persona
A buyer persona is a fictional representation of a person who embodies the demographic characteristics of your target audience as well as their values, tastes and customer behavior.
Building a buyer persona will help you visualize what customers value and design your value prop to match, as you can understand their drives and motivations better.
To create a buyer persona, collect any market research you have on your customers and divide your customers into groups based on key attributes like:
Family status (i.e., single, married, married with children, divorced, etc.)
If you don’t have data on one of these attributes, simply skip it. You don’t need extensive data on every customer, as you are only looking for general patterns.
Once you have divided your audience demographic, look for trends between each demographic and what they value.
For example, you might notice that men aged 30-45 value child-safe products the most or that women aged 50-55 value products with fast shipping the most.
To use this information, compare it to your current value props and ask yourself: “Is the statement consistent with what our customers value?”
If not, make adjustments where needed.
4. Use forecasting to predict future trends
If we learned anything from the fidget spinner phase of 2017, it's that trends don't last forever. The same is true for your customer's values, as people's priorities change as their lives, hobbies and activities change.
To identify future trends to use in your value proposition sales statement, identify between five and seven potential options (like “free shipping”) and then identify products that fit into each trend and analyze the trend’s performance using your sales data.
Once you’ve collected this data, sort your trends from top-performing to worst-performing, select trends you can leverage and adjust your brand value proposition to match.
If you don’t have access to sales data, you could also identify trends through market research. You can perform market research using industry reports, tools like Google Trends, or by asking a sample of customers to rank trends from “most interesting” to “least interesting”.
There’s no limit to the ways you can source valuable data. What’s important is drawing valuable insights from them to execute your future strategies.
When creating a compelling value prop, you need to consider more than just data. Here are a few factors to consider.
1. Carry out competitor/market research
Conducting market research on your competitors will help you create a better quality value prop, as it will identify current gaps in the market you can leverage.
To carry out market research on your competitors, identify two to five of your closest competitors and conduct an analysis on their value proposition marketing using the SWOT analysis technique.
The SWOT analysis assesses your competitors in four categories:
Strengths are advantages your competitor has over the market.
Weaknesses are areas your competitor is failing in.
Opportunities are opportunities your competitor could leverage to grow.
Threats are factors that threaten your competitor’s business.
Once you’ve conducted your SWOT analysis, use it to identify factors you could leverage in your value proposition marketing and then integrate these into your value prop to make it more competitive.
For example, suppose you identified that your competitor has poor customer service. In that case, you could change your brand value proposition from “great socks at great prices” to “affordable socks from people who care”.
2. Test your value proposition across media channels
A/B testing is a form of research that allows you to compare the performance of a new value proposition statement to your current statement. Conducting A/B testing will help you strengthen your statement, as you can see if it will be effective before fully integrating it into your website, social media and branding.
To conduct A/B testing, publish two identical pieces of content with different value proposition statements. You could do this through your website, email marketing, social media, or product branding.
Next, compare your customer's reactions to each by identifying which statement yielded a higher click-through rate, a higher sales conversions rate and more positive feedback.
Once you’ve conducted A/B testing on your statements, go with the top-performing statement.
3. Consider a separate value proposition for each of your product types/services
If you offer a diverse range of products and services, consider using a handful of different value statements. After all, you could apply the statement “cheapest tools” to a range of drills, but not a line of work boots.
So how do you create multiple value props?
To create consistent but different value statements, identify common elements each statement should emphasize (like “affordability”).
Then, create a list of the key individual factors for each statement, draft sample statements and compare them.
To keep your statements consistent, use similar formatting, tones and styles across all propositions.
For example, a hardware store could use “cheapest tools, every time” for their tool range, “cheapest boots, every time” for their shoe range, and “cheapest storage, every time” for their storage containers.
4. Make sure your company understands the value proposition
If every member of your company has a different impression of your value statement, it will appear inconsistent to your customers, as everyone will portray it differently.
Thus, you need to ensure everyone understands the vision and meaning behind your value prop.
To make sure everyone understands your statement fully, include it in your sales management process. You can do this by:
Holding a team meeting to introduce it
Including it in your onboarding materials for new hires
Including it in your branding guide
Integrating it into your CRM (customer relationship management) system and company intranet
Value propositions tell a story about your brand, including what you do, what you stand for and who you are.
To design a good value prop, you need to: sell your product’s benefit, set yourself apart from competitors, choose the right language and make it clear. You can build your perfect prop by drawing from your sales data and comparing what you find to market research and internal tests.
The bottom line is that creating your perfect value prop is about choosing a statement that represents what you do for customers. So choose wisely.
Once you have your killer value prop, you’re going need a leading CRM platform to manage your sales and marketing. You can try Pipedrive for free for 14 days to see how we can help your business grow.
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