5 steps to create a value proposition that will supercharge your sales
6 minutes read
A value proposition is a clear, compelling description of how your business meet the needs of customers in a way your competitors don’t.
It’s an essential tool that focuses your entire team on what matters most and will form the foundation for your marketing campaigns and sales pitches.
Yet, too many entrepreneurs fail to come up with a value proposition. Or, they settle for one that’s too vague and general.
“If I’m vague about what I bring to the table, I’ll have a lot of trouble getting a customer to say: ‘Sign me up,’” says Cindy Chambers, a BDC Business Advisor who helps entrepreneurs improve their marketing and sales performance. “Having a value proposition that’s rock solid, that’s powerful, makes the conversation with the customer so much easier.”
Chambers, who advises entrepreneurs in Calgary, suggests following these five steps to create a value proposition that will supercharge your sales.
1. Define your ideal customers
Chambers says you first need to be as precise as possible in describing your ideal customers. Think in terms of demographics, behaviors and location as well as needs, desires and ambitions. It can help to create personas—fictional profiles of the customers you want to attract.
You should also consider who you don’t want as a customer. Your business can’t be all things to all people and, if you try, your value proposition will become watered down and confusing.
“When you’re very clear about the customers you don’t want, then you can shift to being very clear about your value proposition,” Chambers says. “What is it you offer? To whom? And how does it benefit them? Now you’re attracting the ‘right customers’ for your business.”
You can start by defining your ideal customer by using a table such as the one provided in the template below.
Ideal customer model
Create three personas or imaginary individuals. They should correspond to the most important customer segments you want to attract. For example, a coffee shop near a university might be going after students, parents of young children and the local business crowd.
Your personas will help you visualize the customers you are targeting and develop brand messages and marketing tactics that will resonate with them.
2. Match benefits to customer needs
Your customers have pain they want to alleviate and goals they want to achieve. In crafting your value proposition, you should map how your offerings relieves their pain and helps them achieve their ambitions.
Here, it can be helpful to think about what your ideal customers do in a typical day and where their needs intersect with your products and services.
“What things do you do that take away some pains and create gains?” Chambers asks.
You shouldn’t think only in terms of money, convenience or time, but also the emotional benefits customers get from choosing your solution over the competition.
For example, a locksmith might promise to be at your door within an hour, 24/7. That’s a convenient service, but the value proposition becomes even more powerful when it takes account of a customer’s concern for his or her family locked out of their house in the middle of winter.
3. Be specific
It’s important that your value proposition to be specific about how your products or services meet the needs of customers, preferably by quantifying the benefits.
You want to be quite specific, using numbers or percentages. ‘Our product will reduce your energy costs by up to 25%’—that’s the kind of messaging you want to capture in your value proposition.
“Generalities are not enough for a customer to say: “Oh yeah, I can see how that will help me,” Chambers says. “You want to be quite specific, using numbers or percentages. ‘Our product will reduce your energy costs by up to 25%’—that’s the kind of messaging you want to capture in your value proposition.”
It’s also a good idea to offer proof you can deliver the benefits your claim. In the locksmith example, proof an employee can be at your door within an hour at anytime of the day or night would be to highlight that you have several locations around town.
4. Be unique
Your value proposition should show that you offer unique benefits that customers can’t get from the competition. To do so, you must show how you’re different, Chambers says.
“Differentiation is what makes you unique. Being able to say: ‘I’m better, I’m different, I’m unique.’ To make a statement that resonates with customers, you need to be very clear about their pains and goals. So, understanding your customer is critical.”
One way to do this is by coming up with an “only” statement: We are the only company that does x in the city, region, country, world. Chambers says only statements are good but cautioned you must be able to back the statement up, or your reputation could take a hit.
5. Test your value proposition
You’ve studied your ideal customers, brainstormed on how your offerings specifically and uniquely helps them alleviate pain and achieve goals, and you’ve crafted your value proposition. Now, it’s time to find out whether you’ve hit the mark with real-life customers.
Chambers recommends you try out your value proposition on existing customers to see if it resonates with them.
“See what their reaction is. If they say: ‘I don’t know what that means, or help me to understand better, than keep refining it. Change it, modify it based on the feedback from customers.”
“If they look at you like: ‘I don’t know what you just said to me,’ then you need to work on the words. You may think you’ve got a great solution for them, but if you’re not able to articulate it, then you need to say it differently.”