What is value proposition?
The value proposition of any business can be outlined by completing one single sentence.
"Only they can ......"
You can now think about your business/company and derive your value propositions. Copy of your website and all other marketing campaigns should focus on completing this one single sentence. Companies may not have one single value proposition so it may be prudent to make a list of value proposition.
For example, we know that Uber has a very strong value proposition.
- One tap and a car comes directly to you
- Your driver knows where to go
- Payment is cashless
How to derive your value proposition?
Value proposition may be evident in your product/service before you write your copy. However, for a lot of businesses, you will have to sit down, brainstorm and derive their value proposition.
German mathematician Carl Gustav Jacob Jacobi, famous for some work on elliptic functions often solved difficult problems by following a simple strategy: “man muss immer umkehren” (or loosely translated, “invert, always invert.”)
In order to derive the value proposition for your business, we will also follow inversion. The steps are:
- List attributes of an ideal customer. A customer who may be your ideal customer after 5 years in business. Some attributes that you can think of are loyalty, billables, recurring revenue, ease of interaction, the value they derive from your product and so on.
- List all competing products that this customer can use. List in a few bullet points what you believe to be the biggest challenge with this competing product from the customer’s perspective.
- Against each challenge, list what you provide as a lucrative option or your proposition.
Let’s see an example about Zap fitness club in Melbourne.
|
Ideal Customer |
Challenge/Problem |
Outcomes from the problem |
Solution |
Your Proposition |
|
Individuals |
Setup costs |
The client has to fork out a larger cost the first month they join. |
– Setup costs may be spread over the life of the customer with one final payment in case of early termination. – Charge no setup costs? |
Zap fitness club ( Zap ) offers no setup costs. |
|
Couples |
12 months contract |
The client has to pay for 12 months even if they wanted to cancel during their membership. No flexibility. |
– Flexible membership ( 3, 6 or 12 months ) |
Zap offers month on month membership |
|
|
Not able to suspend temporarily |
The client cannot put their membership on hold if they were travelling or unwell. |
– Suspend your membership whenever you like |
Zap offers same day suspension either online or via the phone for upto 3 months |
|
|
9 AM – 8 PM access |
The client could not go to the Gym after 8 PM when they finish work. |
– 24-hour access |
Zap gyms are powered by 24-hour access control |
|
|
No coaches after 5 PM |
The client could not get professional help after 5:00 PM |
– Trainers from 9 AM to 9 PM |
Zap offers coaches via booking them online at a time that suits you |
|
|
Cancellation was in person |
The client had to travel to the Gym to cancel their membership |
– Cancel anytime – online or on the phone. |
Zap membership can be cancelled anytime without needing to come in person. |
|
Travellers |
Visitor pass for 5 sessions only |
The client felt that the visitor pass was too expensive for the Gym. |
– Flexible memberships for 3 months. |
Zap offers flexible monthly passes |
Value Proposition Exercise
Use the sheet from the to derive a value proposition for your business. Make sure to create a copy before diving into the exercise.
We use weights column in the sheet to give a value of how much each problem would be worth to the customer. For an example would a traveller and an Individual in the same area care about 12-month contract equally? Not really.
Pitfalls
Some of the most common pitfalls you will see when reading websites are:
- Generic statements describing their products. Cloud flare for an example has “Making the Internet Work the Way It Should for Anything Online” which is as generic as it gets. Remember, that even at Cloud flare’s scale such copy on the homepage may not be the most effective.
- Direct competition comparison. For example, Big commerce’s landing page says – “More built-in features than Shopify, without the transaction fees” assumes the notion that everyone visiting big commerce’s page knows about Shopify. It hints that perhaps the visitor should check out Shopify too. To attack a rival is never good advertising.
- Not highlighting all value props at the get-go. Think of each visitor and assume that they are only going to give you the 1 minute to read the copy. If you will not hook them in the first minute, chances are they are less likely to come back.
When to re/derive your value proposition?
There are two instances when you should re/focus on your value proposition.
- When you are launching your products/service and want to position yourself.
- Your competitor is making it increasingly hard for you to survive.
In-between, you should never have to worry about value proposition.
Value propositions template
Click here to download the value proposition template