With all the emphasis these days on getting your message out using online media—blogging, viral marketing, email marketing, online text, image and video advertising, and so on—we simply forget to focus on how to develop the right message. Many a company goes to market without having fully defined its customer value proposition. Instead, companies market a nice list of "powerful" benefits (which their competitors most likely state they have too).
For a customer value proposition to be persuasive, it must be distinctive, measurable, defendable, and sustainable. It is critical to define and support the value in such a way that your customers will pay more for your product than the competition's, or substantially more customers will desire your product over the competition's. Developing a value proposition is the most difficult and time-consuming of all marketing activities. That's probably why so many companies go to market without one.
The value proposition sits at the top of the marketing hierarchy, where positioning and messaging should be derived. To develop a strong, defendable value proposition, you will need to get the attention and time of top executives for hours or days. That may sound impossible, but the only way to do this right is to get at the core thinking of the people that define your company. You can do some homework first to shorten meeting time. You can also delegate research and other work that is better done outside of meetings.
Your job is to uncover the core value that your company offers, and which your customers and prospects will want to buy; your job is not to develop a long list of benefits. Because your competitors will have the same list: Isn't every product easier, faster, cheaper? So how do you differentiate in a way that encourages more customers to buy from you?
The following list of activities is a methodology that can be used to get to the best possible answer:
- 1. Start with core competencies. Develop a list of the internal capabilities your company has in developing your services or products. In some cases, your core competency can be internally developed technology you use to deliver your product or service. Do not state a value for a competency your company doesn't own (for something you outsource, for example). Make a list of the following: what you brought to market first, what you offer as the only provider to the market, and what makes your offering clearly superior to any alternative. You are looking for what makes your company unique. These are good differentiators and will help the process.
2. Study your customers. What problem do you solve for your customer? What problem do they want solved (which no one has fixed yet)? Is there a new trend in any of your key customer segments? If you don't know what your customers are thinking, you must do the research.
3. Turn core competencies into values. Using the language of your customers, redefine your core competencies as values. In other words, translate a technological advantage into a customer stated advantage. List proof points for each.
4. Study the competition. Choose only the top three or four competitors in your industry and look at the language they use to market their company and products. Determine what their value proposition is and whether you believe they can defend it (with proprietary technology, patents, monopoly market share, etc.). On a chart, map out their core competencies versus yours so that differentiation or sameness becomes apparent. It is worthwhile to highlight any area where the market believes your competitor has an advantage but you now have parity. You will make a point of this to your customers to level the playing field.
5. Look at trends in your industry. Is your industry old or new? Are things changing? Can you take advantage of a trend to get out in front and grab an exciting position in the market?
6. Articulate or define the company vision. Where will the company be in 3 years, 5 years, 10 years? The value proposition must align with the long-term strategy.
7. Identify one core value. Prioritize your core values. Determine which one of the top 3 values differentiates you from the competition. What is the one thing about you the customer should remember when he is ready to buy? List the proof points and how you can defend this position in the market. Decide whether you're willing to put the lion share of marketing dollars behind it to build your reputation in the market for that value. Remember, you can't be everything to everybody. Focus on one core value (or two at the most).
8. Build a value chain. Determine whether you can support your top value across every part of the company, from product design to your channels for delivery to your process for support. Make sure to identify areas in your company where you are weak, where you may break the value chain. Commit to beef up that area to support the value.
9. Articulate the value proposition. You should develop a value proposition statement that everyone in marketing will use as the starting point for developing positioning or messaging for products or services. If you can, back up your assertion by documenting what the customer saves or earns by choosing you.
10. Test the value. Test the final value proposition with customers to see whether it resonates.
As you go through this process, continually ask yourself these questions:
- Are you and your executives being honest, or are your using wishful thinking when you list your core values?
- Can you defend the value? What are the proof points?
- Can you quantify the value to your customers?
Don't be afraid to segment your audience. Most companies big or small want to go after the whole pie. They want to be the next Google. If you are more likely to have quick success in a clearly defined market, then start there. If your value is strong, it will likely apply to a broader market over time.
Finally, watch the market, track your competitors, and listen to your customers. If you can no longer defend your value proposition, it's time to review, adapt, adjust, or start over in order to stay ahead of the curve.
You may like these other MarketingProfs articles related to Marketing Strategy:
- Understanding Web3 Through a Marketing Lens: Tony Pham on Marketing Smarts [Podcast]
- The Buyers Are (Still) There: How Can B2B Tech Marketers Get to Them?
- Virtual Event Trends: Businesses' Future Plans and Top Challenges
- Art or Science? The Fate of Data-Driven Marketing
- Four Intent Data Mistakes ABM Newbies Make
- Direct Mail Marketing Trends