Feb 19, 2021 | Updated Feb 20, 2021
by @JoshuaNgala

Capturing interests of customers and getting them to find out more about what you’re offering is a result of a successful value proposition.

For that reason, it’s important for every entrepreneur to know details of needs, wants and fears of the customers.

A value proposition(VP) is a simple statement that summarizes why a customer would choose your product or service.

Also, the features of your product or the details of the service that you provide should be similarly familiar to you. A value proposition, therefore, bridges the gap between these two aspects of your work.

Marketing experts advise that consumers purchase products or services hoping to get results from one of these 3 core desires: wealth, health or relationships.  The VP should be designed to fit in the three areas.

The VP being a consumer-centric promise should offer the three things below:

Relevancy. Explains how your product solves customers’ problems or improves their situation.

Quantified value. Explains how your product/service will deliver specific benefits.

Differentiation. compels the ideal customer to buy from you and not from the competition.

On your website or even online advertisement, your value proposition is the first thing visitors see on your homepage. It should also be visible at all major entry points to the site.

Your value proposition needs to be in the language of the customer. Use the right language for your value proposition.

Here are the 5-Step guide to defining your Product Value Proposition:

1. Identify your customer’s pain points

Humans’ triggers either move them away from pain or toward pleasure. Mostly, the first direction people can be moving in is away from pain.

So, have you identified the pains that your product or service will solve or the gains it would elicit for consumers?

It’s for that reason the solution your company will offer by selling a product or service is vital to customers.  Important to note: Customers do not pay for products.  They pay for a solution your company is offering.

Therefore, design your value proposition based on real problems (pain points) customers are facing. When a customer recognizes the value, they purchase again.

Significant to know is there are three sources of value creation: Efficiency, Effectiveness, and Experience.

 

2. Identify your product/service benefits

Benefits are what a consumer hopes to get, feel or achieve when they use a product.  How does your product satisfy the needs, desires and wants of a consumer?

Your product should help consumers improve to either improve on their health, create wealth and enhance their relationships.

Also, does your product fit in the three (3E’s) model of value creation: efficiency, effectiveness, and consumer experience? Remember, value is created within the consumer, not in the product.

3. Connect the Value to your Customer’s pain

Keep your proposition in your customer’s language. Customers have conversations in their heads about their pain points and possible solutions.

Understanding customers’ pain points through problem interview business model is important. After which, you offer a solution to their pain.

If you speak their language and insert yourself in the conversation, they will notice you and hear your proposition. Your product should be the solution they’ve been looking for all this time.

This approach helps an entrepreneur to adjust their business model according to consumers’ needs.

4. Differentiate your product from the competition

Product differentiation is the introduction of distinctive features to a product to ensure a unique selling proposition of the product. As you offer solutions to consumers’ pains, ensure your uniqueness serves as a catalyst in a consumer’s purchase decision-making process.

Differentiation enables your product stand out over other companies offering similar product substitutes. A successful differentiation boosts sales for a company and promotes brand loyalty.

5. Test your value proposition

The biggest mistake marketers make with value propositions is not testing variations. Test your proposition with small user groups to choose which one you set as your sample.

Launching outreach to user group helps entrepreneurs evaluate if the offer resonates or fails the market test. A/B test can be used to test other variations.

Test propositions that focus on different user problems or key benefits to make sure you’re on the right track.

In sum, creating killer value propositions becomes a top priority for every channel of communication you choose for your business.

Now that you can answer the question “What is a value proposition?

Remember, the value proposition evolves with customers.