It sounds simple, right?  What is your value proposition?  Yet most companies struggle with this simple concept and can’t properly and easily articulate the value that they provide in a way that it is easily understood by their market.

Every company needs a compelling value proposition.  This helps your market understand the value that you will provide if they become a customer of yours.  But most organizations struggle with creating a value proposition.  This is either because their products do not offer true value, they don’t know how to build a value proposition or they make the proposition so broad and/or difficult to understand that their prospective customers do not understand it.  In this later case, the exercise of building the value proposition turns into a marketing or science intellectual exercise that completely hides the value and totally confuses the buyer.

The value proposition is, perhaps, the most critical part of your company messaging.  It is your main interest development statement and must be part of all market facing communications.

The value proposition is the same as your sales proposition (different name).  The value proposition is from the buyer’s perspective and the sales proposition is from the seller’s perspective.

Let’s start with what the value proposition is not.  It is not a catch phrase like “because you are worth it”.  It is also not a positioning statement like “we are the number one provider of whatever”.

The value proposition explains how your product solves customer problems and improves their situation (relevance), delivers specific benefits (quantified value) and tells your ideal customer why they should buy from you and not something else (defensible differentiation).

Many organizations are surprised when the market does not react well to them or does not engage with them.  It is often because they do not have a good value proposition.  A poor value proposition also causes prospects who do show interest to drop out of the sales process.  Many organizations lead with a product demo or rely too heavily on the product demo.  However, without a compelling value proposition, the demo loses its impact.  The demo should prove the value proposition, not try to be the value proposition.

Your value proposition should be the first thing a visitor sees on your website and should be visible at all entry points to your site

The Value Proposition Summarized

  • Why you are in business (what do you do)?
  • Why anyone should care (what problems do you solve)?
  • What do you do that helps people (benefits)?
  • Why someone should replace what they are doing today?  Why are you different and better? (defensible differentiation)
  • Tells the ideal customer why they should buy from you and not something else.

Here are some helpful guidelines and suggestions to consider when building your value proposition.  

  • Clear, concise and compelling
  • No oblique-speak
  • No industry buzzwords
  • No room for interpretation
  • It communicates the concrete results a customer will get from purchasing and using your products and/or services
  • It states how it’s different or better than the competitor’s offer
  • It avoids hype, superlatives and business jargon
  • It can be understood in seconds by anyone

You can evaluate your value proposition by checking whether it answers these questions:

  • What problems are you solving?
  • Why would someone want or need to change?
  • What is your target market?
  • What characteristics make an ideal customer?
  • What are your key features and benefits?
  • How will you overcome known objections you will get?

Answer these questions to see if your value proposition needs to be improved:

  • Do people you meet a second time forget you and what you do?
  • Can someone explain your value proposition back to you in their own words?
  • And when they tell it back to you, do you hear emotion?
  • Do people ask follow up questions when you tell them or walk away or change the subject?
  • Do people find what you say valuable relative to similar offerings?
  • Do they find you the same as similar offerings?  Do they understand your differentiation?
  • Can you explain this to a relative not in your industry and will they understand it?

Here is a sample value proposition about Arbor Dakota

I am a consultant to early stage tech companies.  Many entrepreneurs are good at conceptualizing an idea or even building a product, but have no experience or expertise in turning that into a valuable company.  I have spent my entire career helping founders build great ideas and products into valuable companies. Unlike other consultants who simply provide theoretical advice, I am as hands on or hands off as the CEO wants me to be in the business. An ideal customer for me is an early (or earlier) stage tech company CEO who is concerned about his/her ability to build and scale their business, hire the right people at the right time, get VC funding and maximize the economic value of their idea.  Utilizing Arbor Dakota will improve your likelihood of success, maximize the number of customers and revenue you can achieve, help you avoid common stumbling blocks that occur when building a company and maximize the value of your company and therefore your shares.

For more information on how to create or improve your value proposition, contact Arbor Dakota below. Arbor Dakota is committed to helping CEO’s grow their great ideas into great companies.