What’s your value proposition?
I often ask people what they think their most critical business tools are – and I have to admit to being surprised by how rarely ‘value proposition’ is on the list.
A value proposition is one of the most vital tools a business can have – because it’s all about the people who keep your business alive: your customers. You value proposition defined the key economic and qualitative benefits that your product or service delivers from a customer’s point of view, and should prove – beyond a reasonable doubt – that the product will help the customer to either save money, make money, avoid a cost, or become more efficient.
And here’s something that’s even less well known: in order to optimise customer demand you should create a value proposition for each target market. This will allow you to develop a unique marketing mix for each target market. The marketing mix – aka the ‘Four P’s’ – is a term used to describe the combination of product (or service) attributes, pricing, promotional programs and placement.
Positioning is the method used by brand leaders to create an identity or image for a company, product, service or brand. It determines the ‘space’ a product should be situated in for a given target market and it seeks to gain an insight into the target customer demographic. The perception of value and the need-satisfying characteristics of a product or service will be the basis upon which buyers, decision makers, and influencers involved in the purchase of a product or service make their choice.
A product’s position statement incorporates the value proposition by allowing you to engage in explicit and concise communication with your intended market. Your goal is to shape the customer’s perception about your product or service by describing who you are, what you do, how your product or service will solve their problems, and how you compare with the competition.
Most of the books and articles written about positioning tend to focus only on positioning the company, or possibly the brand – but not the product, service, or even a specific piece of literature. Certainly, positioning your company is important. But most of your customers won’t be intending to buy the entire company, so doesn’t it follow that you should also position the products or services that they will buy?
Businesses that fail to clearly understand their positioning may consequently take a disjointed marketing approach that fails to reach their target market – which is essentially a waste of their marketing efforts and budget. To avoid this pitfall, your positioning strategy must be clearly defined in your marketing plan and should become the fifth ‘P’ in your marketing mix.
Here at team scope we’ve helped many businesses create meaningful value proposition statements – isn’t it time you gave us a call to find out how to give your business more value?