Designing a strong value proposition starts with understanding who you’re serving and how your business can meet their needs, relative to your competitors. Spreadsheets alone won’t tell you how to do this.
Why take care of your value proposition now?
I didn’t think so many business leaders would be still struggling with this. I happen to have several of my customers realizing that this essential and quite foundational exercise has not been well executed in their company, or not revisited for quite some time.
Given the consumers’ change of behavior, especially during the pandemic with 60% of them changing or trying a new brand, I’d recommend at least checking on it on a regular basis.
Startups or Scaleups pitches I’m given to attend to, also tell me the crafting of the value proposition has, let’s say it with compassion, room for improvement. More often than not, my Big Tech fellows are way too much focused on their innovative technology, and less so on what is the customer pain point they are helping to solve like no other.
I could again feel this when attending a series of pitches at ESCP Paris this week, with 8 passionate teams presenting their sustainable innovative startup projects for a final round. Clever, creative passionate, and savvy Gen-Z international future business leaders, a lot of them could benefit from honing their value proposition, and researching with more depth about the customers they’re trying to serve.
Where to start? Crafting a Human-Centered Value Proposition
The journey begins with understanding with empathy what are your customers and prospects trying to accomplish, feel, enjoy or aspire to. Another way to describe it would be: what is their Job-to-be-done (JTBD)?
A classic story told about this, presumably about a Stanley Tools executive addressing his sales team during a kickoff, angry face on, with this opening: “Our customers do not want our drills!”
“Why are you saying this? We had a pretty good quarter, we sold a lot of them.” risks one of the reps.
The exec, after a bit of silence and a challenging look back, smashes the drills he was holding on his desk and says: “Our customers do not want our drills, what they want are HOLES.”
Yes, in this case, the job to be done for their customers is making holes to accomplish some construction work, not buying a cutting-edge laser-pointing tool drilling the fastest. They might want to do this occasionally or every day. They maybe prefer borrowing to buy one, or have someone else do the work for them. Not the same customers, not the same value proposition, and potentially not the same offer.
To learn about your customer’s needs, immerse yourself in their world to understand their motivations and tune in to what brings them joy, less frustration, and fulfillment. Shadowing your customers, and interviewing them with empathy are some of the techniques that can get you more human-centered value proposition feedback.
What a good value proposition should carry?
What value does your business add to their lives? Remember, the best businesses are built on value propositions that resonate deeply with customers.
Here are some examples:
They should have three important qualities:
- Insightful: What do you understand about your customer’s needs, that your competitors don’t?
- Unique: What do you do (or have) that no one else does, and can’t easily acquire?
- Targeted: Who will be super-passionate about your business? Don’t try to please everyone, but rather get stickiness in a segment.
It should be expressed something like: Our Customers will choose our business because it <solves customers’ pains, improve the Job-To-Be-Done>, with <unique benefits/gains in quantified value> unlike <your main competitor>.
And then test it and iterate, test it again and iterate
Once you’ve got the first draft of your value proposition ideally with a visual, go fast to prototype it, in a mockup ad for instance, and test it with your audience. Do it with a small sample of your audience, over email, in a call, or via a small scale social ad (no more than $100 investment) showcasing 2 or 3 different flavors of it. Ask the following questions:
- What is this business about?
- Who is it for? Who is it not for?
- What are you drawn to? What are you unsure about? What could make it better?
What you want to accomplish with minimal investment is to collect evidence about your value proposition. It is going to be way cheaper than realizing after the fact that your offer is missing a real market need, or that the way it is articulated does not resonate with your audience, or that they have a hard time assessing the value of it in their own terms.
Once you collected feedback, go back to the drawing board to improve it and test it again. This iteration mechanism, inspired by the Design Thinking methodology, makes wonders for marketers or product owners.
Happy to discuss it and help if in need.