Jon Bon Jovi once stated, “I ain’t gonna be another face in the crowd, you’re gonna hear my voice when I shout it out loud”.
And while we’re not expecting you to don your tightest spandex and grow out your mullet, adopting this mantra in your business approach can pay dividends - just put the hairspray down.
That’s because, in a competitive market, businesses face the challenge of having to distinguish themselves from their competitors. Of course, this differentiation is critical to your ability to both attract and retain new customers in a time they’re almost always spoilt for choice.
Just take a recent business survey from the Office of National Statistics, for example - competition ranked third on the list of concerns reported by businesses ahead of major factors like taxation, energy prices, and business and interest rates.
At the heart of your ability to stand out from the crowd is the concept of the value proposition.
Getting this right can see you Livin’ On A Prayer - with one study showing that brands with a strong value proposition enjoyed 76% growth over a decade - but getting it wrong can see You Give your business A Bad Name.
But what exactly is a value proposition, what separates the good from the bad, and how can it serve as the backbone for your business’s growth? Let’s find out.
What is a Value Proposition?
A value proposition is a short and simple statement that effortlessly conveys why customers should choose your product or service by explaining how you meet customers’ unique needs and what makes this distinct from your competitors.
In short, it answers one fundamental customer question: "What benefits do you offer that meet my needs better than anyone else?”.
Why Do You Need a Value Proposition?
Sounds simple enough so far, but what’s all the fuss about? You’d be forgiven for being apprehensive about the impact of a value proposition - after all, how much difference can a sentence really make?
But think of it this way: statistics show that up to 90% of your potential buyers haven’t made up their mind about the brand they want to do business with before they started searching. This represents a huge opportunity for growth, providing you can convert these potential buyers into new and then returning customers.
Your value proposition can be the difference maker in this scenario by ensuring:
- You’re not another face in the crowd: Sorry if you’ve just got It’s My Life out of your head. But in today’s crowded marketplace, a compelling value proposition can position you strategically against competitors by highlighting your distinct advantages. This helps to capture audience attention and stand out against an array of choices by carving out a unique identity that ultimately makes it easier for customers to choose you over others.
- You have internal clarity As a business owner, you’ll already understand the importance of ensuring that everyone is singing off the same hymn sheet. A well-defined value proposition serves as a guiding light for everyone within your company, from your tech and marketing teams to sales sales and customer service representatives, aligning all staff on what the business stands for and what unique benefits it offers. This internal coherence and clarity fosters a unified approach in decision-making and communication that enables teams to work together effectively toward common goals - all to the benefit of your growth, visibility, and long-term success.
- You’re connecting with customers: In The Godfather, Michael Corleone famously declared, “It’s not personal, it’s strictly business” - but when it comes to your value proposition, the more personal, the better. So instead, we recommend taking a leaf out of Don Corleone’s book and giving your customers an “offer [they] can’t refuse”. Your value proposition acts as a vital bridge between your product or service and your customers’ needs by demonstrating your specific value in a way that resonates with your target audience. By clearly defining how your offerings solve problems or fulfill desires, you can create a more meaningful connection with customers, ultimately driving engagement and loyalty.
Value propositions: where to start?
So we know what a value proposition is and why we need it - but where’s the best place to start when crafting your own?
To help businesses create and refine their value propositions, Strategyzer offers the Ad-Lib Value Proposition Template. This structured tool guides you through the process of clearly articulating your promise in a way that effectively communicates your value to your audience.
It’s really easy to use, too - the Ad-Lib template employs a fill-in-the-blank method that allows you to quickly explore various propositions:
“Our [products/services] help [target customers] who want to [achieve this objective] by [solving this problem] and [providing this benefit].”
This simple framework enables teams to focus on their core offerings and the specific needs they address, making it easier to communicate value succinctly.
To find the most effective messaging, consider using the Ad-Lib template to create three to five different versions of your value proposition. Each version can emphasise a different aspect of your offering or target a different customer segment. Prototyping and testing these variations can provide valuable insights into which resonates most with your audience, helping to refine your overall strategy.
Just ensure that you’re:
- Asking the right questions: to identify the key elements you must include in your value proposition, start by posing critical questions that will guide you in filling out the Ad-Lib template. “What is my customer trying to achieve?”, for example, or “What is the biggest problem they face?”.
- Recognising the importance of iteration: remember that a value proposition is rarely static. It should evolve as your understanding of customers and market dynamics deepens, and should grow with your customers’ changing needs and expectations. Regularly revisiting and refining your value proposition ensures that it remains relevant and effective in doing this.
The ingredients of an effective value proposition
With Strategyzer’s template in mind, we begin to get a better idea of the core ingredients needed for an effective value proposition. It’s clear that understanding your customers deeply is essential, and this can broken down into three critical components:
- Customer Jobs: these are the tasks or goals that customers are trying to accomplish. What is your audience trying to achieve, and how can you help get this done?
- Customer Gains: these are the positive outcomes and benefits that customers hope to achieve through your product or service. By focusing on the specific benefits that resonate with your audience and their aspirations, you can create a compelling narrative that demonstrates the value of your offering.
- Customer Pains: what are the frustrations, obstacles, and challenges that are preventing customers from achieving their jobs and gains? Demonstrating how your solution can alleviate these frustrations requires empathy and a deep understanding of the pain points customers experience.
The recipe for an effective value proposition
But of course, the ingredients are only half the battle. If you’re trying your hand at one of Ramsey’s star courses, for example, it’s safe to say you’re going to need the recipe too! Seriously, have you ever tried making a beef wellington?
Consider your value proposition in the same way. If we think of Strategyzer’s template as our shopping list for the perfect value proposition, what’s the best recipe for putting them together? Here’s a structured approach to building your value proposition, no apron or chef hat required:
1. Start with discovery
All value propositions begin with discovery. The discovery phase is vital as it really stresses the importance of understanding your customers—not just at a surface level, but in depth.
This isn’t a one-and-done job, either. You should be consistently engaging with your audience in order to keep a solid comprehension of their needs, preferences, and pain points. By treating discovery as an ongoing process, businesses can not only better adapt and respond to evolving customer expectations and market dynamics, but you’ll also have an invaluable foundational knowledge base that can strategically inform every next step in your value proposition journey.
2. Prototype and test
Once you have gathered insights from your discovery phase, the next step is to prototype different value propositions.
Remember: Strategyzer’s Ad-Lib template is an ideal way to create initial drafts, with the fill-in-the-blank method allowing you to explore various messaging angles and focuses.
Don’t underestimate the importance of iteration at this stage. Prototyping enables you to validate different approaches before committing to a single direction, while testing these prototypes with real customers - whether through feedback sessions or A/B testing - allows you to assess which variations resonate most effectively.
3. Refine with Data
Don’t just ignore the outcomes of stage two.
After testing your prototypes, it’s important that you refine your value proposition based on the data and customer feedback you receive.
Collect insights from your tests to determine which aspects of your value proposition are most compelling and which bits need adjustment - this is how your data can transform abstract ideas into concrete insights.
For example, perhaps your customer feedback indicates that one benefit resonates significantly more than others. In this instance, you could adjust your value proposition to reflect this, leveraging data to create a compelling narrative that speaks directly to your customers’ needs and aspirations.
It’s all about embracing that dynamic, iterative approach to ensure you’re not just creating a value proposition that resonates today, but also one that adapts to meet the changing needs and preferences of your audience tomorrow.
Common pitfalls (and how to avoid them)
According to Neil Patel, despite 69% of B2Bs having an established value proposition, studies found just 2.2% of these were deemed “useful” by consumers. This emphasises just how important it is to get your value proposition right, whether you’re a B2B or B2C business, and highlights the significant competitive advantage you can gain by avoiding the faux pas many businesses fall victim to with their value proposition.
To help ensure you don’t make the same mistakes, here are some common pitfalls of creating a brand value proposition - and, just as importantly, what you can do to avoid them.
1. Lack of differentiation
We know you’ve probably got the message by now…but at risk of sounding like a broken record: your value proposition is all about what makes this different from your competitors.
With this in mind, failing to differentiate yourself from the crowd with your value proposition is the very definition of falling at the first hurdle. Yet despite this, one of the most common pitfalls in developing a value proposition is creating a generic statement that fails to distinguish your offering.
Without clear differentiation, potential customers may overlook your solution, perceiving it as just another option among many - a fast track ticket to joining the 97% of value propositions customers don’t judge to be useful.
How to avoid it: Conduct thorough competitor analysis to identify what others in your space are offering, and focus on your unique strengths to identify the gap in the market for your USP. From superior customer service to niche expertise, ensure you’re clearly highlighting these aspects in your value proposition to set it apart from the rest.
2. Overcomplicating the message
Ernest Hemingway taught us a lot - the value of real-life experience, the importance of taking life by horns, and that its possible to write best-selling novels off the back of umpteen bottles of Scotch.
But perhaps most famously, Hemingway taught us the value of simplicity. The more simple and succinct your messaging, the more effectively it communicates its meaning.
Yet it appears many business owners have forgotten their GCSE English lessons. Overcomplicated value propositions are surprisingly common, with many approaching it more as a complex manifesto filled with jargon and technical details. But this is counterintuitive. In reality, we know that a value proposition should be a concise and straightforward statement that even those unfamiliar with your industry can understand.
How to Avoid It: Aim for clarity and simplicity, leaving the jargon at home and using plain language to convey your message. Focus on the core benefits and avoid unnecessary technical terms in order to be as easily digestible as possible - a value proposition crafted with this in mind is significantly more likely to resonate with a broader audience, and make a lasting impression as a result!
3. Neglecting your audience’s pain and gain
Failing to understand the specific pains and gains of your audience will see you missing out on the invaluable insight you need to resonate with your customers.
Many businesses think they have a solid understanding of their customers’ needs and desires, but working on assumptions and not doing the necessary legwork is a sure-fire way to ensure your message misses the mark.
How to Avoid It: Invest the proper time and resources that the discovery stage requires. Research and engage with your target audience, using surveys, interviews, and feedback sessions to uncover their primary pain points and aspirations. Being able to directly address your customer pains and gains will help to craft a value proposition that’s not only relevant but also compelling - all to the benefit of how well it resonates.
From improving your ability to attract (and keep) customers to aligning your internal teams around a common goal, businesses who actively invest in defining, redefining, and communicating their value proposition effectively position themselves for sustained success in an increasingly competitive marketplace. That’s what makes value propositions the backbone of business growth and a true transformative force for businesses, whatever your size or market.