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Your employees’ job is to motivate buyers, but employees also need the right tools to succeed. In today’s competitive environment, a well-written value proposition fills that need.
What is your value proposition?
A value proposition is not just useless information about your company, products or services. It is a statement about the results that a person or group can expect from working with your company.
A company’s value proposition is at the heart of its business model. It is a promise that the organization makes to its customers regarding the value of its products and/or services. A value proposition should be simple, but strong and clear. A compelling value proposition strategically examines the factors that influence customer focus and overall business ambition and sets expectations. It serves both your customers and your employees by setting their expectations. Guiding employees through setting these expectations ensures that they understand your company’s standards and gives them something substantial to strive for in terms of product quality, service, etc.
Your value proposition drives your strategy
A value proposition is a critical component of your strategy rather than just a feature of your marketing plan. It should provide three crucial benefits:
- Functional benefits: This is how your product performs. These benefits link your offer to the result the customer wants.
- Advantages of product features: This is what sets your product apart. These advantages provide a credible point to compare your offerings to competitors’ offerings.
- Personal benefits: These benefits are responsible for emotional ties associated with the purchase decision.
The most successful value propositions offer the customer all three types of benefits simultaneously. It is a promise that you intend to give the buyer a positive experience with a great product or service. It convinces the buyer that your product is the best choice for them and responds appropriately to how the buyer feels. For employees, an effective value proposition gives them a better idea of which marketing strategies will be most effective.
Related: How to Create a High-Performing Strategic Plan
A strategy with real benefits
Value propositions examine factors that influence a number of areas, such as customer focus or overall business ambition. So instead of thinking of them as a feature of your marketing plan, you can develop the value proposition as a strategic core for all of your operating models (e.g., decision making, finance, and resource prioritization).
Once you have a clear operational strategy based on your value proposition, it indicates direction all the interactions your employees have with your customers. It tells your salespeople precisely who the target group is, what that target group wants to get or achieve and what is most important for the target group to know about your product or service.
With this clarity, the sales team can become more efficient and productive. They can reduce operating costs while improving customer engagement, segment reach, customer retention, market share, revenue, net profit, and market share.
Take my company for example. I am the chief marketing officer (CMO) of an asset manager who has made our value proposition part of our deeper strategy. Our team recognized that most organizations that manage exchange-traded funds (ETFs) focus on beating a single financial index. However, we recognize that investors have specific long-term goals and want investment solutions based on those unique objectives. We let those goals guide the development of all our products. The approach simultaneously meets the needs of investors and serves as a differentiator.
Related: Want to Increase Sales? Think more deeply about what you’re really selling
Determining the need to run
Even if employees have a clear value proposition to offer customers, they will only be successful if that value proposition still aligns with current markets. Put your value proposition into context by looking at what’s happening Outside your business. Is your industry — or a neighboring industry — undergoing major changes? If so, you probably have little choice but to spin and transform.
But what does transformation look like? You expand your value proposition or create a new one. Most companies will rationally expand their proposition until they have evidence that it is no longer safe to maintain their core strategy. If you’re in an industry where digital disruption isn’t imminent, you can probably get away with maintaining your tech infrastructure. If your industry is already adopting new digital options, simply optimizing your work may not be enough.
Whether you’re expanding your value proposition or starting from scratch, your employees need to understand the intent and practical application of your changes. The more they understand these elements, the easier it will be for them to commit to the shifts in an authentic way, improving customer confidence.
A must-have formula
Whether you’re crafting a new strategy or tweaking your current one, the key is to position yourself based on the target segment you want to dominate and the value proposition you want to dominate it with. The following formula can help you clarify:
- Our product is for [target customers; functional] who wants [alternative to the norm or current options; functional].
- Our product offers [key problem-solving capability; functional] that offers [product attributes; product]so that you can [key product features; personal].
A completed version of the formula might read: “Our product is for new parents who want to better understand their baby’s emotional well-being. Our product offers AI-based emotional tracking for babies that offers biofeedback analysis, calendar charts and predictive alerts so that you use a custom dashboard to respond and bond with your little one.”
Then you need to differentiate their value proposition from others to stand out. Find ways to demonstrate that your brand offers something competitors don’t. Or explain how the service or product fills a need that no other company can.
Strong value propositions make for a strong business
In today’s competitive environment, you need to give your employees the tools that can drive customers into action. And you can do that with a well-written value proposition. It does more than serve as a marketing hook. It gives direction to the business and provides strategic guidance for your entire team. It gives employees insight into your values and goals and provides them with direction. The resulting unity and efficiency differentiate your brand and allow you to not only cater to customer preferences, but also drive them. Keep the value proposition formula offered above in your back pocket so you can adjust well and enjoy smooth sailing no matter where the market winds blow.