So, let’s assume that you have defined and articulated your strategy and your target audience, and you now need to create preference for your offering. Because it is a better mousetrap.
Here’s a definition to work with:
A value proposition is your brand or product’s functional and emotional benefits that bring real and perceived value to the customer, and competitive advantage to your company.
This definition addresses a few fundamentals of creating a strong and sustainable value prop.
“Functional and emotional benefits” means that your customer looks at your offering and thinks “they are talking to me” and “they really have something for me.” Note: the emotional appeal comes first. Because you need people to listen. A good example of this comes from a campaign years ago for an unnamed auto insurer, which developed an insight (a forehead slapping A-Ha! which seems obvious in retrospect) that everybody thinks they’re a great driver. You rarely find people who would identify as something different. So, the company embarked upon a campaign for great drivers, developing policies, communication, sponsorships, etc. that all embraced that idea.
“Real and perceived value” means that your customer not only needs to believe that you’re better, but find enough value in your offer to pay you for it and to develop an attachment to the brand or product that will stand the test of time. You can only “sell someone a bridge” once before they’re on to you! Your value proposition needs to deliver a unique mix of attributes that offers customers real value. And to achieve perceived value you have to create a shared understanding between you and your customer – through experiences, relationships, two-way communication, and shared values – about what the product or brand stands for.
“Competitive advantage to your company” is the piece that often gets overlooked. Particularly with start-ups or very early-stage businesses, there is a built-in optimism that causes leadership to think that they don’t even have any competitors. That bravado may be helpful for the enormous persistence needed to breathe life into a newish venture, but it misses an important analysis. What makes you both different and better than another choice a customer might have? No, really think about it. In today’s age of ever-increasing consumer power, this is imperative.
Next week: how to fulfill the criteria above in four steps.