Some businesses concentrate too much on the competitors in their industry and keep asking questions like what product sells.
This leads them to forget the core aspect of running a business successfully – that would be understanding the customer value proposition.
This article is for aspiring entrepreneurs or entrepreneurs who have a lot of experience but have many questions about figuring out the value proposition part of the business journey.
you will be looking at the importance of having a customer value proposition in your business, the three core parts, and the crucial one – how to write a value proposition for your business.
Let’s jump in, shall we?
What is a customer value proposition?
To explain it in layman terms – The value proposition is a brief summary of how your product or service will BENEFIT the customer after it is delivered, acquired, or experienced.Having a well-constructed and planned value proposition is closely related to achieving customer satisfaction for your product or service. It makes an evident statement on your market presence and you could be predominant in the market for quite a long time.
Types of the customer value proposition:There are three types of customer value propositions. You can brainstorm and choose the one that aligns with your business goals
1. Price-based customer value proposition:
“We have the lowest price in the market.” – Though there are people who look at brands while purchasing a product or service.I beg to differ that a huge population of people look at the price tag before becoming a customer of your business. This can be leveraged.
2. Product-based customer value proposition
This could be a kind of outdated concept as businesses adapt very quickly to the customer’s changing needs.
Any unique set of features or varieties in your product or service can set your brand apart from the other products in the market.
3. Customer satisfaction value proposition:
Reviews and ratings run the world. People check how you are welcomed amongst the existing customers before joining the club.
Customers not just use your products or services but also leave feedback on them via social media and other platforms.
This goodwill can be channelled to your advantage when introducing a new product line or boosting your existing products.
“We at RadicalStart, believe in organized project execution and explicit transparency, which has led us to achieve consistent success in customer relationships.”
– Madhu Sudhana Pandian, Project Manager at RadicalStart Infolab Pvt. Ltd.
Why is value proposition important in any business?
According to Hubspot, 64% of the businesses have a well-established value proposition and it has been one of the core reasons for their success.
- It helps with formulating the business proposal for the investors and for raising funds for the business.
It influences the decision-making process of the consumers.
It advances the marketing strategy pitched for the business. (Note: If an emotional factor is involved, it has more customer value than ever)
It sets it apart from the competitors and if you are a new entrant with a fresh consumer value proposition it puts you on the map.
Things to consider while working on a value proposition for your business:
When it comes to figuring out what kind of customer value proposition you want for your business, you must know three core elements to consider while framing one. These three principles come in very handy for new entrepreneurs!
1. Target audience:
It defines the belief system of the target audience. The value proposition helps make a buyer’s decision based on benefits, values, and needs.
Any product or service must give a solution to the problem faced by your target audience. And your marketing pitch to the target audience has to be the same way – “We are here to solve your problem.”
3. What sets you apart from your competitors:
Obviously. Each business has its own target audience with a different pain point. But if your business is in a highly competitive niche – having a unique value proposition can set you apart.
How to write a persuasive/effective value proposition for your brand?
1. A shorter statement that describes your value proposition:
The value proposition you come up with has to be clear, precise, and to the point for your audience.
It has to stick with people’s memory. Because a value proposition statement is closely associated with branding.
2. Specify the benefits of your customers’ experience:
Any good value proposition will give importance to specification. It needs to be very specific about your products or services from the customer’s POV.
3. Solution addressing a specific problem:
The value proposition you work on has to address a very specific problem that your customers go through.
4. Why you and not your competitor?
Your value proposition must be attractive, catchy and must resonate with a larger audience. Which ultimately gives your customers a reason to choose your business over your competitors.
5. No hyperbolic claims:
A hyperbolic claim is instating the target audience that “You are the best”. But the issue is, there is no way to prove them. So using comparative adjectives is more effective than using a superiority adjective. It shows you are better than something else.
Examples of Brands that had effective value proposition strategies:
When working on your customer value proposition, remember all the above points to write a comprehensive and convincing value statement.
Let’s check out a few examples that have an excellent value proposition formula.
Lyft: Get a ride or become a driver
With one statement “Get a ride or become a driver” – they cover both kinds of the target audience, the rider, and the driver.
The ride-sharing business concept has been flourishing in the market long before the pandemic (and it continues to be one). They have improvised their customer value proposition as well.
New statement – “Hop in. Crack a window. Let’s get back out there.”
Bitly: Link shortener and analytics tool.
Bitly is used to optimize the links by making them concise. They framed a very direct and to-the-point catchphrase – “Short links, big results.” Their customer value proposition statement reflects their objective and trait.
FreshBooks: Small business accounting software.
The customer value proposition of FreshBooks is stating what they are used for. There are no titbits or rhyming words in them to make it exciting. The phrase itself resembles professionalism.
Unbounce: A/B testing without tech headaches.
Their customer value proposition covers a very specific, highly narrowed-down audience.
Digit – Take the worry out of your money.
Digit is a personal finance management app. They have revamped their customer value proposition from ‘Save money without thinking about it.’ to the current statement.
They address the fear of mismanagement and problems with personal finance in their customer value proposition.
When it comes to value propositions, it has to be appropriate to your industry, to your business, and to further narrow it down – the target audience.
Studying their needs and desires will help you produce better products or services that will connect and engage with the potential customers at large.These are some of the points to remember and examples to consider while working on your customer value proposition.
Bonus Customer Value Proposition Template!
- Digitizing your food delivery business.
- Market expansion
- Ease of managing the business.
Complete ease of managing the food delivery business with a simple to use dashboard.
- Wants: Ease of ordering food through an app.
- Needs: Food delivered to their doorstep without contact.
- Fears: Not able to track the order.