Value Proposition: A Sure Source of Competitive Advantage
A recent post on the Kissmetrics blog started off with one line that has ingrained itself in my mind, ‘Almost regardless of what you do, you have bigger competitors.’ There will be competition on the basis of price, quality, quantity… and the list goes on. So if there is always someone better than you, this means that you cannot be a market leader right? Wrong! As ironic as it sounds, even in the face of the stiffest competition, you/your organization can be the leader if you have a strong value proposition.
What is value proposition anyway?
As Peter Sandeen
puts it, value proposition is
“a believable collection of the most persuasive reasons people should notice you and take the action you’re asking for.”
I decided that I would dissect the above definition and expound on what each part of the sentence really entails and how your organization can work to build a value proposition which could give you, as Sandeen puts it, an ‘unfair advantage’ over your competitors.
It is good to be self confident and hold yourself in high esteem, but for you to appeal to customers, it isn’t enough to say ‘we are the best digital marketers for your organization’s needs.’ How can you prove that you are the best? Who has said you are good enough to be called the best? The best way to prove your worth is through testimonials
. Think about it. When you plan to go to a restaurant, do you go to its website and read all about it or do you go to Yelp
and read customer reviews about the restaurant? Just as reviews are important to you as a customer, make sure that your prospective customers have the opportunity to read reviews about your business. Let your past customers help you in marketing your organization.
For you to have a strong value proposition, you should have a collection of reasons
why customers should buy your product or service. The testimonials would be one good reason. Another great reason, especially for cause related organizations, is the cause
Most people would want to be associated with a cause in any small way possible to spread the word about the cause and to get more people involved. For example, I remember when Morton Salt had a campaign in which a certain percentage of the proceeds from the sale of each tin of salt would go towards funding the breast cancer research efforts. In this way, people who wanted to contribute to the research in any way possible, ended up buying Morton Salt even though it was slightly costlier than other brands.
Every customer perceives value differently. For a price sensitive person, a suitably priced service holds the most value while for a trendy customer, the latest fashions would be the most valuable. Therefore, the key to creating a good value proposition is to focus on your target market
; how does your target market perceive the value
of a product? Once this has been determined, it is your task to persuade your customers as to why your product offers the most value to them.
, for example, our target market is nonprofits and small businesses that need internet technologies to fulfill their missions. Many times, such organizations have a limited budget so to them, value would be determined by cost to a certain extent. Therefore, our value proposition to them is providing effective internet technologies at an affordable price.
As we have stressed in our previous posts, the purpose of your marketing efforts should be to propel your customers to take action. One way of doing this is through repetition.
Repeat your value proposition in all your marketing channels; website, social networks, advertising campaigns, events; so that the information does not get lost as soon as your customer leaves the room after a meeting!
Peter Sandeen has developed a 5-step system for finding the core of your value proposition; the ideas that make you the best choice for people
. You can download a PDF version of the 5-step system here
What do you think of the whole idea of value proposition, and how do you use it? Share your ideas with us!