How to create a value proposition for your business

A value proposition is a short statement that communicates why customers should choose your products or services over your competitors. It cuts through all the marketing jargon to simplify the reasons why you’re the best choice by defining where the unique value to the customer lies.

A strong value proposition will include:

• Relevance: How your product or service solves a problem or improves a situation for the customer.
• Specific benefits: Lists the specific advantages or benefits that your product or service provides.
• Differentiation: Shows what makes your product or service unique or better than other alternatives.

Understanding and articulating your value proposition is crucial as it helps attract and retain customers, differentiates you from your competitors, guides your sales and marketing strategies and aligns your team’s efforts towards delivering consistent and compelling value. It also guides decision-making processes, helps align your business goals with customers’ needs and influences product development. This all helps to drive sales and growth (which is the aim of the game, right?).

Mindful Chef

“Healthy eating made easy”

Mindful Chef provides nutritious, pre-portioned ingredients and easy-to-follow recipes delivered to your home, focusing on health, simplicity, and convenience.

Pact Coffee:

“Speciality coffee, delivered”

Pact Coffee covers a number of benefits in its value proposition – including quality of product, ease of ordering/use as well as focusing on its mission to make the coffee industry a fairer and more sustainable place. “Make a Pact to enjoy better coffee, and we’ll send you groundbreaking beans from every corner of the earth, lovingly grown by a community of 150+ farmers. The more coffee lovers we reach, the more farmers we can help and the more incredible coffee we can bring to your cups!”

Slack

“Make work life simpler, more pleasant and more productive”

Slack focuses on improving workplace communication and efficiency through its collaboration platform. Its value proposition couldn’t describe this better, or any more clearly.

Monzo

“By solving your problems, treating you fairly and being totally transparent, we believe we can make banking better”

Monzo’s value proposition stands out due to its customer-centric approach, offering transparent and user-friendly banking solutions through innovative features like real-time notifications and budgeting tools.

The brand has built a strong community and identity around modern, straightforward banking, appealing particularly to tech-savvy users with its clear messaging and responsive customer service. By continuously refining its offerings based on user feedback and maintaining a focus on simplicity and convenience, Monzo effectively differentiates itself in the competitive digital banking market.

A value proposition and a USP both aim to differentiate a product or service, but they serve distinct purposes and focus on different aspects. As mentioned, a value proposition is a broad statement that explains the overall benefits and value a customer will receive, highlighting how the product or service solves problems or improves their situation. It encompasses the general advantages, benefits, and experiences the customer can expect. In contrast, a USP is a more specific assertion that focuses on a particular feature or aspect of the product or service that sets it apart from competitors. Your USP needs to pinpoint what makes your offering unique and compelling, emphasising a distinct attribute that your competitors lack. While your value proposition addresses the holistic value to the customer, your USP zeroes in on a unique feature that provides a competitive edge.

And because good things come in threes, there’s also your brand proposition to think about! This defines the core promise that your brand makes to its customers, encapsulating the overall experience and values associated with the brand. It is broader than your USP and focuses on the emotional and psychological connection with your audience.

All three propositions differ primarily in their scope and focus: your value proposition addresses overall customer benefits, your USP highlights unique features, and your brand proposition encompasses your brand’s promise and identity.

Without grasping what drives and interests your customers, your value proposition is going to miss the mark. Start by identifying distinct customer segments through demographic, psychographic, or behavioural characteristics to understand who they are and what drives their purchasing decisions.

Next, analyse customer needs and pain points by gathering feedback through surveys, interviews, or analysing customer behaviour data. This process helps uncover the specific challenges or desires that your product or service can address effectively.

Developing customer personas further enhances this understanding by creating fictional representations of your ideal customers, including their goals, preferences, and challenges. These personas serve as a guide to tailor your value proposition, ensuring it speaks directly to the motivations and concerns of your target audience.

By aligning your value proposition with customer insights gathered from these methods, you can create a proposition that not only attracts attention but also builds strong connections and loyalty with your customers.

A strong value proposition consists of several core elements that collectively communicate the unique benefits of your product or service to potential customers.

First things first – a clear and compelling headline will grab attention and succinctly state the primary benefit or solution that you’re offering.

This is followed by a supporting subheadline that elaborates further, highlighting specific USPs that differentiate your offering from competitors.

Make sure to include both emotional and functional benefits. Emotional benefits appeal to customers’ desires and aspirations, while functional benefits address their practical needs and problems. Together, these elements create a value proposition that not only captures interest but also persuades customers by clearly outlining how your product or service meets their needs better than any of their other options.

When crafting a business value proposition, several common pitfalls should be avoided to ensure clarity and effectiveness. Here are some examples to help you side-step successfully and keep on track.

Being too vague or generic can mean you fail to differentiate your offering from your competitors. It’s crucial to clearly articulate the specific benefits and USPs that resonate with your target audience.

Another pitfall is focusing too much on features rather than benefits. Customers are more interested in how your product or service solves their problems or fulfils their needs, so emphasising tangible benefits is key.

Failing to tailor your value proposition to different customer segments or failing to test and refine it based on feedback can lead to missed opportunities.

Lastly, using complex jargon or overly technical language can confuse potential customers and dilute your message. Keeping your value proposition simple, clear, and customer-focused will help you to effectively communicate your offering’s unique value.

There are certain steps you can take to ensure your value proposition resonates with your target audience.

Start by conducting A/B testing, where you present different versions of your value proposition to segments of your audience and measure which performs better in terms of engagement and conversion rates. Collecting feedback through surveys, interviews and analytics tools helps gather qualitative and quantitative data on how customers perceive your proposition and whether it addresses their needs.

Then it’s time to crunch the data. By analysing this feedback, you can identify strengths and weaknesses. You can then iterate by refining your messaging, emphasising different benefits, or adjusting your language to better align with customer preferences and feedback. Then it’s a case of continuous testing and refinement to ensure your value proposition remains compelling and resonant in a competitive market landscape.

To communicate it effectively, you need to integrate it across your various marketing and sales channels to ensure consistent messaging and impact. Start by incorporating it prominently on your website’s homepage, where it should be featured in a clear and compelling headline and subheadline. Use it consistently in email campaigns, social media posts, and digital advertisements to reinforce your brand’s unique benefits and advantages. Offline materials such as brochures, flyers, and presentations should also highlight your value proposition prominently. Also make sure your team is clear and on board should they be required to present the company at any stage or answer any enquiries.

Choose communication channels that align with your target audience’s preferences and behaviours, whether it’s social media platforms, industry events, or direct sales pitches. Measure the impact of your value proposition through key performance indicators (KPIs) such as conversion rates, engagement metrics, and customer feedback. As mentioned, use A/B testing and analytics tools to track how variations in messaging affect audience response. Continuously refine your communication strategy based on these insights to ensure your value proposition resonates effectively and drives meaningful engagement and sales.

Whether you’re in the early stages of planning your first venture or are already an established business owner looking to refine your brand, a clear and compelling reason(s) for customers to buy from you is crucial in a world where today’s customers have an average attention span of about 8 seconds (which is a decrease from 12 seconds in the early 2000s). Will this decrease even further in the future? Being able to summarise the value of your business quickly and effectively to your audience will help it compete for users’ limited focus. Spend time getting it right (and test and iterate as markets evolve) – it will be worth it.