How do you develop a strong value proposition?
Geplaatst op 23 mei 2016 door Ronald Swensson

As a business coach I spend a lot of time helping startups and small and medium-sized businesses to develop a compelling value proposition. A value proposition is a promise or value to be delivered. It’s the primary reason a prospect should buy from you. In a nutshell, a value proposition is a clear statement that explains (1) how your product(s) and services solves customers’ problems or improves their situation (relevancy), (2) delivers specific benefits (quantified value) and (3) tells the ideal customer why they should buy from you and not from the competition (unique or unusual differentiation). Creating a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to its customers and prospective customers. 

Most people think that a value proposition has to be 'unique' but unique offerings are (1) very difficult to create these days and almost impossible to sustain for very long and (2) by adding extra features, benefits and/or services, the higher your cost structure becomes and the less you stand out to your target customer. However, the best businesses have mastered consistency in unusual offerings. For example, McDonald’s has a better track record in terms of moving customers through lines and delivering consistent quality in food than other fast food restaurants. And when it comes to customer service, Coolblue - one of the largest online shops in the Benelux - has been able to set themselves apart from competitors who claim high-quality service as their differentiator. Once you develop and master your unusual offering(s), customers will easily agree to choose you over your competition. Then you can create marketing campaigns that make it easy for prospective customers to notice you, and have salespeople that can convert the core customers as they walk into the sales process. 

So how do you develop a strong value proposition? 
Asking yourself the following questions will give you the answers you need to create a strong value proposition: 
1. Who are you targeting? A good start is to properly define who your target market is. 
2. What do you actually do? While it sounds like a simple question, this is where many companies struggle. What are the benefits you deliver? 
3. Why have you won business in the past? A good exercise is to take a number of customer projects (or proposals) you have worked on in the past and identify the reasons you won that business. 
4. Who is your competition? Performing a SWOT analysis will help you identify areas you are particularly strong in and areas you need to improve. 
5. What do your customers think? Your perception of your company may not be what your customers perceive, so ask them! 

By analyzing these areas listed above, you have a strong basis for creating your unusual offering. Your value proposition statement takes time to build a compelling message that sets you apart and positions you to win more business. Before you begin sharing your value proposition, I recommend testing it on a few customers using a simple PowerPoint presentation. Taking their feedback into consideration will ensure that you create a value proposition that positions you unusual in the eyes of your customers. 

Here are some examples of strong value propositions: 
- We design our products to reduce your setup time in less then 40%! 
- Save time with our streamlined process and increase employees’ productivity. 
- We help salespeople crack into corporate accounts, speed up their sales cycle and win big contracts. 
- Our products help companies leverage the internet to triple their market reach and cut marketing costs in half when launching new products. 

These value propositions listed above, clearly communicate the benefits customers will receive and as a result, these companies stand out in customers’ minds. Use these principles to develop your own value proposition. Examine your business’ unusual offerings. What specific benefits do they offer your customers? What makes them seek you out over your competitors? Don’t be modest - sing your business’ praises and your customers will too ;-)