The value proposition of a company is the foundation on which its marketing strategy is based on; it presents all the benefits and values that the business promises to deliver to its customers. For example the value proposition of Red Bull energy drink is to fight mental and physical fatigue. The company brand tagline goes “It gives you wings” and surely it does! With this innovative marketing strategy and value proposition, Red Bull has covered 70% of the energy drinks market share. Value propositions differentiate one brand from another and are crucial to your product image among your target customers. Value propositions must be designed carefully to give your product or service an edge over your competitors’ brands. If you are a marketing strategist, business analyst or owner of a small business, you should take this course to learn how to create a compelling value proposition.
In this article will help you understand the importance of value proposition and how to create a strong value proposition statement.
What is Value Proposition?
Value proposition presents the complete positioning of your brand in the customer’s mind and is the answer to their question “Why should I buy your product or service?” It is the core of a business model and the basis on which product marketing strategy and brand positioning is built on. It helps you describe your product vision, benefits and values that your business promises to deliver.
A value proposition must be carefully crafted in a simple statement to address three main points of your business:
- Who are your target customers?
- Why should the customer buy your brand?
- What are you delivering?
For an in-depth understanding on formulating a value proposition, take our course on design value proposition. The value proposition is the sum total of the essence of your business value and must reflect a clear and compelling message to your customers. Let’s look at how to create a strong value proposition that is specific and targeted effectively.
How to Create a Strong Value Proposition?
With the help of a strong value proposition, you can determine how and to what extent your business will bring in profits and how you will reach out to your customers and build their confidence in your offerings. While writing a value proposition, keep in mind the following points that are the key to the success of your value proposition:
- Understand Value Proposition Creation
There are several types of value propositions that you can build based on pricing and benefits. Kotler and Armstrong, in the twelfth edition of their book ‘Principles of Marketing’ describe the concepts of the five winning value propositions – more for more, more for the same, the same for less, less for much less and more for less! A classic example of a ‘more for more’ value proposition is the case of Starbucks coffee. They entered the market as the most expensive brand but their product quality was second to none. The “perfect cup of coffee” that we enjoyed along with the amazing aroma of the coffee beans in their friendly little shops, is a testimony of their success. This course takes a unique approach to show you innovate ways to value creation.
- Know Your Target Customers
After you’ve understood your brand value proposition, it’s time to find out its acceptability in your consumer’s mind. It’s important to know what segments of the market will use your product, how your customer will perceive the benefits of the brand, how effective is your positioning statement and how well you can differentiate your product from other similar brands. Get more insights on understanding your target audience with this special course.
- Describe Your Product Vision
Product vision helps to clearly state the deliverables and benefits that your brand promises to your customers. You must decide on which segments of the market you will concentrate and what your positioning strategy will be. Southwest Airlines positioned itself clearly as a no-frills, low-price airline that had a vision to provide quality flying experience at rock-bottom prices. Customers don’t mind the absence of amenities like meals or first-class cabins; they enjoy the low cost on-time travel and the services from the cheerful employees, who go out of their way to surprise and entertain their passengers. Their product vision and implementation has made Southwest Airlines the most profitable air carrier in the United States. This course can help you to similarly build a strong brand.
- Test the Minimum Viable Product
Test the effectiveness of your product by testing the minimum viable product with the help of a small group of customers, called ‘early adopters’. They will try to understand the product, its vision and benefits; they will give you valuable feedback that can help you in important processes like idea generation, presentation, market analysis and learning.
- Create Your Value Proposition Statement
Once you have defined, evaluated and measured your value proposition process, it’s time to build your value proposition statement. As explained earlier, the statement must be simple and clearly defined; it must answer questions like who are your target customers, why should they buy your brand and what you plan to sell.
Value Proposition Template
A good value proposition statement is built on the below fundamental framework:
- For ( the target customer)
- Who (specific needs, demands, buying criteria etc.)
- We provide (solution name / brand description)
- That ( specifies benefits and business values to clients)
- Unlike (the competition)
- Who ( provide solution, features, functions, benefits)
- Our company (better approach, solution, functions, benefits)
- That (offers a better customer experience)
So, whether you are the owner of a small or medium business, an entrepreneur or a marketing strategist, it’s important to develop a strong value proposition statement that’s the building block to your brand success!