Value Proposition Defined
In a nutshell, a value proposition is a concise statement summarizing why people should hire, buy from, or otherwise engage with a company or organization.
Although the term “value proposition” was coined 30 years ago, the concept is commonsensical and has been around a long, long time.
Whether you’re developing a 30-second commercial spot for the Super Bowl, planning a full-page product launch advertisement in Forbes, or stepping into the elevator with two of the people about to attend your ten o’clock, you need to distinguish your company or organization in a compelling way.
Oh yeah — and if you’re publishing your Web site.
The Anatomy of a Value Proposition
Basically, your challenge in each of the above situations (and countless others) is to make your answer to the following question crystal clear and compelling:
Let’s say that in another way:
Think about these three basic elements..
…and you’re on your way to an effective value proposition.
Like I said, commonsensical.
Change the Order Around when Building your Value Proposition
It’s common and even natural to frame a value proposition in terms of Offerings — Audiences — Outcomes.
I think it’s common practice to consider one’s business in terms of offerings — products and services. I even think it’s common practice to define one’s businesses by the products and services it offers. Common practice, maybe. But a mistake, if you ask me.
When we focus on offerings first, we risk placing undue importance on the things we most enjoy doing and making — or the things of which we are most proud — regardless of their marketability. In other words, we risk building a businesses — and marketing efforts — around offerings that not enough people will purchase.
A classic modern-day example of the problem with putting offerings before audiences is the failure of the Segway, the two-wheeled personal transporter invented by Dean Kamen in the 1990s. Universally acclaimed as a marvel of technology, the Segway’s disappointing sales are most often attributed to the failure to realistically identity the market for it and the obstacles in the way of its adoption.
Therefore, when it comes to creating your value proposition, I recommend a different sequence or structure of thought.
I recommend turning this…
A trivial difference, you say? Not at all!
Mind you, I’m not suggesting you express your value proposition using the Audiences — Outcomes — Offerings structure. I’m just suggesting it’s the best way to both reflect on and create your value proposition.
Advantages of the Audiences — Outcomes — Offerings Structure
I think there are three primary advantages of using the Audiences — Outcomes — Offerings structure:
- First of all, the customer should always come first. So there’s that.
- Secondly, thinking about audiences allows you to vividly picture actual members of your target audiences, whether they are existing customers, former customers, or prized prospects. Vivid thinking promotes deeper understanding. Visualizing Jan Smith allows you to consider Jan’s actual needs — that is, what you know Jan wants or needs to accomplish — and then to consider which of your offerings are appropriate for Jan and people like Jan.
- And finally, business is dynamic. Dunkin used to be donuts. Amazon used to be books. Netflix used to be Blockbuster by mail. Blockbuster used to exist. Thinking first about your audiences and the outcomes they desire might very well suggest new offerings for your arsenal. If you begin your business (and marketing) strategies from the static vantage point of your current offerings, you can miss opportunity. (Check out this blog article from a few years ago which also adresses the power of putting audiences and outcomes first.)
“If you build it, they will come” is a common misquote from the 1989 movie, “Field of Dreams” (the actual line was “If you build it, he will come”). It’s also a dangerous foundation for a marketing strategy.
Yes, he (Ray Kinsella’s dead father) and they (throngs of baseball fans) did end up coming to Ray’s Iowa cornfield-turned-baseball-diamond. But that was the movies.
In real life, as business owners, we have to persuade people to come. We do this by establishing trust, being reliable, treating customers with respect, and offering quality goods and services at prices that are deemed valuable.
And when it comes to our marketing efforts, we persuade people to take the first steps by presenting a value proposition that resonates with them — a value proposition that shows, most of all, that we understand who they are and where they want to be.
Finally, that value proposition needs to be front and center, prominent, and unmissable on your Web site.
(It should go without saying that structuring your thinking about your enterprise this way — around audiences and outcomes before offerings — is not only a good marketing approach but it’s also a pretty good way to define or redefine what your business should be.)
In an upcoming article, I’ll share my methodology for helping clients through the process of creating compelling value propositions using the Audiences — Outcomes — Offerings structure. Stay tuned! If you haven’t already done so, sign up for my email newsletter to be among the first to know when I’ve added potentially useful content.
Meanwhile feel free to comment below if you have thoughts to share on the topic.