Is Your Value Proposition Valuable Enough?
The number one reason businesses fail is a weak value proposition.
Here are some strategic tips to pitch attention-grabbing ROI to your target buyers.
When you sit down to work on your business, the first question you should ask yourself is “what is my value proposition?” When we first ask that question, what we usually start to get is a list of products or services that the business provides. Other times, we get pitched the “features” of what the company offers. And sometimes, all we get is a blank stare.
So let’s re-phrase the question:
“What differentiates you from everyone else who does what you do?”
Now we’re talking. Sometimes we get standard buzz-words like “Customer Service, Quality, Value”, and those are not necessarily weak answers. They are however likely to be the exact same words their competitors use when asked that same question. In fact, almost all companies use those words to describe their business, but hardly any of them do a very much in their day-to-day operations to live up to those words. So if they’re not backing up the use of those descriptors, then what is the likelihood that any of their customers are using those words when they talk about their relationship with that company? If this sounds a lot like your business, then you probably don’t have a very strong value proposition, and it’s costing you money.
So let’s talk about what a value proposition is, how to develop one and then use it for significant strategic advantage over your competitors. In all of the education, training, business and marketing development seminars etc. that we’ve been exposed to over the past 30 years, there is surprisingly little emphasis placed on the importance of a strong UVP. As a result, there is not a lot of information available to help you really understand what a UVP is, and how you can develop a strong UVP for your business. Our goal is to change that.
Here are a few examples of unique value propositions:
∙ Domino’s Pizza – fast delivery
∙ 7up – the UNcola
∙ Walmart – low prices
∙ McDonald’s – consistency
More often though, strong value propositions come from having a tangible difference in your product or service or in a characteristic of how you create or deliver that product or service to market:
∙ Better processes – Supply chain: Walmart
∙ Better people – Customer service: In-N-Out Burger
∙ Better raw materials – Luxury food items: Dean & Deluca
∙ Scarcity – Diamonds: Tiffany & Co
Be careful though, as most value propositions usually promise better value, better quality and better service, but you can’t use any of these terms to define your value proposition or it will get mixed in with the weak or non-existent UVP’s of your competitors. The most effective UVP will – in a tangible way – demonstrate clear value to your target audience that they do not perceive when they think of your competitors. Laser-like focus and consistency in embracing and promoting your value is the greatest strategic differentiator you can achieve.
UVP’s are created in two phases: Phase 1 is where you internally (yourself, or within your senior management team) decide what your unique differentiation is. Phase 2 is crafting that uniqueness into an outbound message to your market – a confident, assured benefit statement.
Here are some important points on developing your own unique value proposition:
Trust your market to tell you what they need and want.
Finding your unique differentiation in your market is far more likely when you become involved and understand your customers, tune in to their “opportunity triggers” where they literally tell you what they want or don’t want. You are able to obtain feedback on early concepts and ideas and have a good understanding of how competitors are positioning themselves in your market.
Look short-term and then longer-term for opportunities.
Your customers will often tell you what they want today, but trends and patterns will tell you what they will want next year and the year after that. Mix short term market research with longer term research to strike a strategic balance.
Look outside your industry.
Study successful companies of all types. Seek to understand their unique value proposition. How are they different in the market?
Improve your customer’s life.
Think big(ger) when you seek out your UVP. Being the best in price, selection or shipping time is often not enough to separate you from your competition. What can you do with your idea, your product or service and your knowledge of your market to really improve their lives, health, financial situation, status, prestige, etc…?
Know your strengths.
Make sure you are in a good position to deliver on your unique value proposition. It’s not enough to create the best UVP statement only to give way to someone else who could execute better. Know your strengths and build your UVP out from there.
Your market research, idea generation and strategic planning should lead to your UVP. All aspects of building, selling, marketing, delivering and supporting your products and services need to fulfill your UVP. It really is the missing piece to the 90% of small businesses that fail in the first 5-years. Don’t let that happen to you.
For more information or to discuss your particular needs in this area with an
expert business coach, please contact me to schedule a complimentary initial
telephone consultation where I’ll provide a customized
12-point growth plan for your business.
Breakout Consulting, LLC
Dearborn, MI ∙ San Diego, CA