At the core of all businesses—underneath the bustle of the day-to-day operations, behind the buzzing new marketing efforts—is a value proposition. Before you roll your eyes and say "Got it, Mr. Value Prop Man", let me ask you:
Tell me in one sentence why anyone should buy X from you at Y price.
And if you can do that, let me challenge you a little more: Would your customers believe your competitors could say the same thing?
You see, your value proposition is more than a mission statement, more than a customer service promise, more than a low price. It's the essential, why-your-business-matters statement for your customers AND your whole company.
If you are ignoring a core problem with your value proposition, then it’s like a toothache—it won't go away. It'll only get worse.
What is a Value Proposition?
A value proposition answers the question "Why should anyone buy X from you at Y price?" It can exist at a high level—answering why anyone should do business with you as a company—and on a more granular, product level.
A good value proposition can be measured on three criteria:
- Inspirational: Does your value proposition inspire your customer? Does it excite them with the promise of being able to solve a problem that really matters to them?
- Innovative: Does your value proposition reflect innovation? Does it capture what sets your product/how you do business apart?
- Indispensible: Does your value proposition make it clear why your method of solving your customer's problems is indispensable? Or does your value proposition sound like all of your competitors?
Why Your Value Proposition Matters
When I was at the MarketingSherpa 2015 Email Summit, I sat down for an interview with their Director of Editorial Content and my friend, Daniel Burstein, where I told him what a value proposition is, and why it is crucial for your business.
In marketing, we are very focused on technology, messaging, copywriting, and design. But what is the foundation of all of that messaging? What is at the core of that use of technology? It is the value proposition. I'm Daniel Burstein, Director of Editorial Content at Marketing Sherpa. We're here at the Marketing Sherpa Email Summit 2015. I'm joined right now by Jose Palomino, the President of Value Prop Interactive and a professor at Villanova University. Thanks for joining us.
Absolutely, my pleasure.
So, you're a featured speaker here at Email Summit. You're going to be talking about the value proposition. What is the value proposition and why is it so important to marketers?
The value proposition is the core or central truth about whatever the offering is—whether it's a service or product. And more importantly, it answers this question: Why should anyone care about your offering? Because, in most categories in today’s global economy, there are multiple versions of that product available from multiple vendors.
So, buyers—whether it's a consumer buying a consumer product—or a business, looking at a business category, have so many choices to choose from. Why choose Brand A versus Brand B? Brand A may think that what sets them apart are “these 10 features”—when, in fact, those 10 features are just table stakes. And it turns out that everyone in their category has those 10 features.
So what they should look at instead is “What combination of those features is unique? What particular characteristic of one of those features really sets that offering apart?” If after really taking a good, deep look at that, they find that they're just left with the table stakes, that's bad news, right? So, a lot of times companies decide they don't want to look at it. They think maybe that problem will just go away.
But the reality is that a bad value proposition is like a toothache. It just gets worse. So, you're better off confronting that bad news up front and then asking the hard questions. What would set us apart in a meaningful way to our target customers?
And ultimately improving what you’re offering to the customers?
Absolutely. Because that's going to create more value for the customer. It only matters if it matters to the customer. Just saying “Well, we used to sell laptops in black and now we're going to make them with green polka dots—hey, isn’t that different? No one else has green polka dots!”
But the question is: does the customer even care? Unless, you know, there's a hidden market of green polka dot laptop buyers, it really doesn't matter.
So, I have a copy of your book here, Value Prop. We were talking about it. You interviewed 50 business leaders as you created the book. So what were some of their biggest challenges and what were some of the most innovative things they were doing to improve their value prop for their customers?
Well, the biggest challenge is the day-to-day routine of having to hit sales. If you're in a big company on a quarterly or monthly cadence, you don't get a chance to pause and ask the question “Are we even doing the right things?” So that was one of the biggest challenges—which was a bit of an eye-opener for us as we did the research. We’d ask, “So, why aren't you slowing down a little bit?”—well, they can't.
They're publicly held companies, in many cases, and they have to try to hit the numbers no matter what. So that's a sales-centric focus, which can be a great strength in certain organizations, but again, can really keep you from doing the kind of introspection that you need to do to really sharpen your value proposition. So that was one of the big challenges.
For B2B organizations who were going well, we found that they understood that just having good marketing materials—or even good lead gen or demand generation activities—didn't really help any unless your sales team was tied into that. Otherwise, it’s an inconsistency. So, getting rid of the inconsistencies in the messaging and the experience that you're promising people was one of the key challenges—and the organizations that did that well would prosper.
Yeah. Really infusing the value prop helps you infuse that value at every level.
Right, your value proposition has to be in the culture of the organization. It has to be much more than just something that somebody in the boardroom said would be a good idea. Examples abound of companies that come up with a new tagline and think that will solve their eroding market share problem. It's not enough. We see some large retailers that became small retailers because they just could not really grasp the fact that their overall value prop—what they were bringing to the consumer—wasn't very different at all. Or worse, it was deficient—it wasn't even at a table-stakes level.
So that's at the strategic, business leader level. What about at the email marketer level? How does the email marketer set the value prop for, say, subscribing to a newsletter? Because again, it can be like table stakes, just put it out there and hope someone subscribes.
Sure. So, there are five key areas where almost every buyer gets stuck. And until they can get past the stuck point, they almost find it impossible to make a purchase decision—even if it’s free. One of them would be, for example, “Who are these guys? They're offering it for free, but is it even worth my time? Are they aligned with my interests?” Customers will gauge their decisions based on whether they feel like a company can actually help them, even for free—because they know nothing's really free. They know “Even if it doesn't ask for my credit card, I know it's going to take time. It's going to fill my inbox.”
Another hurdle might be “Does it solve my problem? Does it really address my concern?”
So, you have to really understand your customer. That's really the key message in all of this. You have to get into your buyer's head. If you don't understand why your buyer functions the way he or she does, what matters to them, what they really are passionate about—you'll never align your value proposition to what really moves them. And if you do that, it's not just that you'll sell more stuff—you'll actually be creating value in the world. And I don't want to get overly existential, but it's an important thought.
While we're in our businesses, while we're making stuff, selling stuff, offering services—why not make it matter to people at some level? If we can connect with what matters to them, it's going to be an easy engagement. It's no longer selling. It's engaging in a way that matters and they welcome it. They’ll say, “Wow, you're answering my questions. You're helping me understand how to take advantage of this. I actually appreciate even more communication from you.”
Yeah. In marketing, it isn't about coming up with some snazzy headline to make up for a deficient product. It's a way to get customers to choose the best product.
Excellent, I look forward to seeing what you say tomorrow on the stage.
Your value proposition is the core or central truth about your offering, and it answers the question “Why should anyone care?”
In a global economy, there are multiple versions of any product available. There are so many choices to choose from, that marketers forget to distinguish why their audience should choose Brand A over Brand B.
If after taking a candid look at your value proposition, you see that there isn’t really anything that sets you apart in a meaningful way for your customers, you need to reevaluate.
Get rid of the inconsistencies in the messaging and the experience. Your value proposition has to ingrained culturally in the way you do business.