Is your company’s conversion low? And you can’t find a problem because you believe you’re doing all the right marketing steps and still nothing happens? Would you say you have a strong value proposition?
In the words of Flint McGlaughlin from his book The Marketer As Philosopher:
“The essence of marketing is the message, the essence of the message is the value proposition, the essence of the value proposition is the exchange sum.”
Your potential customers are not only looking for benefits but rather asking why to buy from you. And if your value proposition is not clear your conversion will stay low as well as your business potential.
That’s why, in this blog post, we’ll cover everything about how to create a strong value proposition – what is it, why businesses must have it, and how to create a powerful one.
The Effects Of Low-Quality Value Proposition
Let’s look at the following statistics.
Image Source: What Makes Up A Killer Value Proposition? [Infographic]
As you can see, a big percentage of businesses have established value propositions. But, unfortunately, often that strong value proposition is nothing more than a tagline. And there is still quite a big percentage of businesses without any value proposition.
Some businesses still think that the value proposition isn’t something they really need. They think that they only need a product or service they can promote online and don’t pay too much attention to creating a strong value proposition.
But, if you want to grow your business and build a competitive advantage (and of course you do!), you will not be able to do it without having a value proposition.
And, if you fail at creating a strong one, these are some of the results/consequences you can expect:
- Unrelatable to your audience – this happens due to the lack of having a customer persona. If a business fails to research the market to find its audience there’s a big chance that the value proposition will miss the target as well.
- Overpromising – often happens when a business wants to get ahead of their competitors so they promise too much but fail to deliver. This leaves many unsatisfied customers and a bad reputation.
- Getting lost in your product/service – instead of thinking of the customer and how to meet their needs, the main focus is on the product/service and how to sell it. If a customer finds you too self-centered they will just leave.
- Focusing on everything but the value proposition – businesses that don’t spend enough time developing a strong value proposition are faced with the dreaded question: how to attract customers when we have something less valuable to offer? And their solution often resorts to offering discounts, lower prices, coupons, etc. But, in the long run, this is like jumping into the rabbit hole.
Let’s see an example of a poor value proposition:
As you can see their value proposition is not clear. And if you’re not on their website, from this value proposition you can just conclude that Slack gives you power. What that power is and what you can do with it or why doesn’t say.
It might as well be some power drink. When, in fact, it is a business collaboration software designed for easy communication between employees.
My thinking is that they could be much more successful if their value proposition is on point.
Mistakes like these can cost your business dearly so I would suggest getting that strong value proposition right the first time. Because once your base is set, every other aspect of your business will go more smoothly.
What Exactly Is A Value Proposition?
Instead of thinking of a definition, let’s take another approach. Imagine you are a customer looking for a solution to a certain problem you have. What questions would you ask? Maybe something like this?
“If I am the ideal customer, why should I buy from you rather than any of your competitors?” Flint McGlaughlin, The Marketer As Philosopher, pg 39.
If there is no clear answer to this question, your ideal customer will just leave the site and go to your competitors.
Whether it is related to your product or service, it has to, first and foremost, offer a solution for a specific problem your ideal customer is trying to solve. And, it has to be the best offer available if you want to get that customer and close a sale.
A strong value proposition consists of three components:
- Who is it for
- What problems does it solve
- Why are you better than your competitors, so I (ideal customer) would buy from you
Since the value proposition is the major key to conversion, every company should have it.
This should be the first step to take when trying to improve your business. Everything else comes after that, like updating your website, changing page elements, adding images… These elements should serve to back up your strong value proposition, it doesn’t work the other way around.
How To Create A Strong Value Proposition For Your Business
So, now that you’re familiar with the three components you should implement in your strong value proposition, it should be much easier to actually create one.
But, if all this is new to you and you are still not sure how to approach it, help yourself with this visual representation:
Don’t forget that your competitors are as important as your prospects. Researching them first will help you clarify your own offer because you will see what works and what doesn’t, and where and what to improve on to get ahead of them.
Finally, let’s get into the trenches.
It’s time to write your strong value proposition, but while you’re at it have in mind the following:
1. Use The Prospect’s Voice, Not Yours
Know the prospect. It should be a mantra for every business.
Your value proposition is an offer you use to attract ideal customers. But to get it right you need to know them well. Familiarize yourself with their pain points so you could offer them the best solutions.
Don’t be like companies that make their value propositions all about themselves.
Or they make it so unrelated/complex to their audience they often get the following response:
Once you know your ideal customer, and use their language, metaphorically and literally, you will be able to create that strong value proposition. And only then it will resonate and it will bring you the “yes” you are after.
2. Clarity Over Creativity
When it comes to your value proposition, being too creative may, believe it or not, harm your business.
For example, if you’re using too many words to describe what you’re doing, you may confuse your customers. Or, when trying to be unique and your value proposition ends up being full of some abstract thoughts but doesn’t really say what it really does. Like the Slack example, we mentioned above.
Don’t forget that less is more when it comes to creating a strong value proposition.
Even though there is no specific rule for how long this statement should be, 10 words more or less, is what is common practice. And it is not easy to put a lot of substance in so little words.
Luckily, we have the following guide we can use to craft our strong value proposition:
“I must understand your offer first (clarity), so I can believe (credibility) that only here (exclusivity) I can get what I want (appeal).” Flint McGloughlin, The Marketer As Philosopher, pg 41.
3. Benefits, Not Bragging
Just think about it: how many ‘the best coffee’ brands are really the best?
Obviously, ‘the best’ is different to different people, but overall not too many.
And yet, many brands present themselves as ‘the best, the fastest’, but only a few deliver it.
A strong value proposition is not built on ego but on actual benefits.
Your brand should show the benefits to your particular target audience.
‘The best’ doesn’t describe anything valuable to your ideal customers because they’ve heard it a million times before. It’s just bragging and people are sick of it.
However, if you look, for example, Duolingo’s strong value proposition, ‘Learn a language for free, forever,’ any customer can clearly see that this statement is about the benefit and not the ego of the brand.
With this simple and yet strong value proposition, they positioned themselves as ‘the best new’ way to learn a language’ and they’re not that far from the truth.
The Globe on their homepage just adds more value to the proposition because it tells every customer that they are available everywhere, for everyone.
And this is what ideal customers are looking for: a clear message that answers my problem.
Now, you may wonder – how can any of this help me get the right clients and why is a strong value proposition so important to have?
Why Is A Strong Value Proposition The Key For Attracting The Right Clients?
One might think – is it building a value proposition really that important for building a powerful brand? Isn’t it enough to do an awesome job, and not worry too much about building a brand around the value proposition?
Well, even though this approach might work in the beginning, it is not a solution in the long run. Competitors don’t sleep.
They research the market, they improve. New products and services are launched constantly. That makes it crucial to build a name for your brand, and you will do that with your strong value proposition first. Because, this is the first contact an ideal customer has with your brand, and you want him to stay, not leave.
Let’s see the benefits a strong value proposition will bring your business:
1. Increases Conversion Rate
I already said this, but I will repeat it because it is that important, a clear value proposition is a major key to conversion.
Just as poor-quality value proposition rejects potential customers, and sends them over to your competitors, the strong one attracts them. This means they will stay on your website longer and read about your product taking the steps towards the sale. Just imagine, you are one step closer to sale with having a good value proposition, or you will lose that sale (and many more) because of the poor one.
2. Provides the Foundation for Your Offer
A strong value proposition is much more than just a sentence; it’s a part of your business plan. Once it is set right, it will form a foundation for your business. It will support your product or service development, marketing strategy, and sales.
3. Gives You a Competitive Advantage
If you write a clear, realistic value proposition, you’re already one step ahead of your competitors. Because most of the businesses don’t get it right, it’s an excellent negotiating strategy.
It shows right from the start that you know what your product/service does, how it solves your prospects’ problem and why they should buy from you. And once a prospect sees the value right from the start you got their attention.
4. Increases the Quality as Well as the Number of your Leads
Once your message is clear, your prospects will be able to compare their requirements with your offer right from the start. This will save them time in their decision-making process but will also save you time when negotiating.
Don’t Take My Word For It, Test It
Now that you know how to create it and what’s in it for you, gather your sales and marketing team to help you craft your strong value proposition. But, rather than one, you should create several and then test them to see which one works the best.
These are some suggestions on how to test them:
- Talk to your customers
- On landing pages
- PPC ads
After the testing is done, you can further refine your value proposition according to the new information you gathered. Remember, as your business grows, revisit your value proposition and tweak it if necessary.
Key Points To Remember About Value Proposition
If you want to attract the right clients to improve your conversion rate, you need to create a strong value proposition. I hope the information provided in this blog post will help you in doing that.
And yes, it is not easy to write a good or rather, a precise value proposition but for the sake of your business, it has to be done.
Remember the three questions it has to answer:
- Who is it for
- What problem does it solve
- Why are you better than your competitors
Once you are clear on the answers, use the following dynamics to create your strong value proposition:
- Clarity (the prospect needs to understand)
- Credibility (so he can believe)
- Exclusivity (that only you)
- Appeal (have what he wants)
So, what are your thoughts on this subject? Or questions? If you have any, don’t hesitate to share them with us in the comments section below or contact us.