In the increasingly global economy, there are more providers, services, and products available than ever bombarding you.
It can be a little overstimulating right? Or is that just me?
The truth is that crowded markets are becoming the new norm. Like a town that used to have one gas station, your industry is seeing more competitors and more innovation now than ever before. And with that increased competition, the future of your company is tied to your ability to craft a differentiated value proposition.
I’ve found over the years that while just about every business owner knows what a value prop is, a surprising few really grasp the full purpose of their value prop. I’ll give you an example.
I once asked a business owner to break down his value prop for me. He was able to explain for me exactly what they did and who they did it for. “We provide _____ for companies in the ______ space.”
Now, because I was familiar with his business, I knew they did great work. But let’s say for a second I had never heard of his business - he might as well just told me that “We provide iced cream to people who like ice cream.”
His ice cream might be the creamiest in the world or be infused with a secret caramel sauce, but according to his value prop, I just know he has ice cream. At best, I’ll buy some from that kind of company if it’s convenient simply because I know they have it.
This is the important difference between clear targeting and a clear value prop. Your targeting establishes who your ideal customer is and how your offers align with their preferences. Your value prop is focused on answering an important question:
Why you? Why not any one of your competitors? What sets you apart?
The existence of your industry probably already demonstrates the need (or want) for whatever you’re selling. Your goal is to turn those dollars your way with a differentiated value prop that helps your ideal customer choose you specifically.
In my experience as a coach, I’ve come to find two things to be true about differentiation:
On this first point, I want to bring back my favorite ice cream analogy for a second (I’d say I’m sorry, but apparently I’m just really hungry today…)
As I said, there’s a difference between telling a customer, “We have ice cream” and, “We have the world’s creamiest ice cream”. But in your industry, the task of differentiating yourself is probably a little more difficult than that.
Very few businesses, and likely none you’re competing against, claim to have no differentiation at all.
Your competitors probably aren’t just saying “We have ice cream”. They’re probably ALL saying that they are the ones with the real creamy, flavorful, perfect ice cream. As you’ve probably witnessed first hand, it sucks the “value” right out of value prop - or to use economic terms, it’s like claim “inflation”.
What this means to you is that your value prop - your “Why should they buy from you?” - needs to be different from the generic claims flying around your industry. It needs to be specific, memorable, and above all, especially valuable to your ideal customer.
To move away from the ice cream, I’ll use my company Value Prop as an example. Just how many coaches have you heard of throughout your time in business? I mean, you’ve probably seen more “guru” coaching ads on Facebook than you can count, right?
Every coach promises to help you grow your business - our special sauce is in our how. We developed a proprietary model and method for growth called the Revenue Throughput System. It’s unique because it empowers business owners to tackle revenue growth comprehensively through a simple, clear, repeatable process.
So instead of launching disparate growth campaigns at random trying to get off a revenue plateau, our clients get a full-picture view of their business and an exact roadmap of what they need to do to grow.
For us, we find that customers choose us because of that comprehensive, systematic approach we take to revenue growth, so we’ve built our marketing around it. We aren’t just “growth minded coaches”, we’re the designers of the Revenue Throughput System--and that sets us apart in the crowded coaching world.
This brings up the second point in our two differentiation pillars. Your differentiation should not focus on just any difference. The difference needs to resonate with your ideal customer.
I like to say that your value prop needs to be “Unique to you. Valuable to them.”
Once you have a clear picture of exactly who your ideal client is, you can start to articulate exactly what kind of pain points and business dreams they have. These serve as the foundation for a powerful value prop.
As for actually forming that value prop, there are three criteria your value prop needs to meet in order for it to really stand out.
Your value prop needs to capture how and why your offering is:
Let’s get into each of these.
It seems a little bit obvious that innovation would be the cornerstone of building your value prop, right? But it isn’t just another “be creative” cat poster – let’s talk about specific ways to be innovative.
I’m sure you, like every other business owner, would love to be sitting on a “golden egg”--that product or service that reliably outperforms your competitors. That would make business simple, wouldn’t it? Let me tell you two things that I know about innovation.
The first is that when you’re good at what you do, there’s a decent chance you’re already sitting on an innovative asset. I can’t tell you the number of times that business owners I’ve coached thought they needed to innovate from scratch, but once we dug into their business, it was more a matter of uncovering and showcasing unique things they were already doing.
You can find innovation in any facet of your business, it’s up to you to discover, develop, and deliver on that differentiation.
And remember, you don’t need to be 100 miles ahead of your competitors. You just need to be a few feet--or even inches--away. As I always say, even Usain Bolt, the fastest man alive, only wins by a few milliseconds.
No matter what your offering is, the worst position to be in the minds of your customers is in the “nonessential” category.
But let’s face it--as customers ourselves, we do mental calculations all the time about how essential a purchase is. Do we really need to upgrade this machine--or can it last a little longer? Do we really need to hire this out--or can we DIY it?
The reality is, there are probably hundreds of alternatives to what you offer, especially if your customer is willing to look beyond just your category. So how do you position yourself as indispensable?
By positioning yourself as an essential piece of “the bridge” that gets your customer from Point A (where they are) to Point B (where they want to be).
Let’s put this in context.
In and of itself, a screw has no indispensable value. There are so many varieties and sizes, they are literally a dime a dozen.
But have you ever put together a piece of IKEA furniture...and lost one of the screws on your carpet? It’s maddening, right? Because in that moment, that one screw was essential to getting you where you want to be--sitting with your feet up on your new coffee table.
And the moment you lay eyes on it is a powerful moment of joy and relief. Finally, I can get this done.
That’s how you want your customers to feel when they discover your offering or company. It should speak to their needs and problems so specifically that it feels like “Aha! At long last, I’ve found what I’m looking for”--instead of, “Well I hope this works…” (which is how you feel when you can’t find that essential IKEA screw and break out the duct tape instead…)
To leverage the “indispensable” value prop, find exactly what process or need your offer fits, and tailor your messaging to help a prospect picture the relief that comes with finding that solution.
You might be raising your eyebrows at the word “inspirational”--because at first glance, it might feel like a stretch for your offering or category. Like, c’mon, how “inspirational” can our industrial paper products be? But stay with me.
By inspirational, I don’t mean that you’re inspiring your customers to “be the best ‘you’ you can be”.
By inspirational, I mean that you are “raising the bar” in the mind of your prospect. You aren’t just telling how you’re going to solve their problem--you’re showing them how working with you will make their lives (or even the world, if you want to go that route) better.
The classic example for this is any kind of weight loss program or gym. Their target customer has a problem they want solved: losing weight. But any gym worth their salt doesn’t stop at how much weight their customer will lose--they talk about how much better their customer will feel after they lose the weight. That’s what really motivates their buyer to buy!
So how do you do this in, ahem, less flashy categories? There are two strategies you can use:
However you go about inspiring your prospects, the aim is to showcase that doing business with you helps them beyond the current problem they’re facing. By doing so, you can create a valuable position for your brand.
The most important thing I can say on this topic is this: don’t put your value prop on the back burner. With a never ending to-do list as a business owner, it’s easy to put things that feel less urgent off until later. The problem?
The lack of a powerful value prop might not sink the ship tomorrow, but neglecting it can cause possibly irreparable damage over time--because instead of standing out and winning more business, you’re sinking into the background.
If you need some accountability to help you tackle the crucial, big picture questions of your business like your cornerstone value prop, I’d love to chat--or you can get my foundational book, Value Prop.