Is your Value Proposition Compelling?
Editor’s note: Stu Schlackman is a frequent contributor to this blog.
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What makes a value proposition compelling? Does it set you apart from your competitors? Is it unique to your market? As Jack Trout says, “Differentiate or Die.” A value proposition should be a clear and concise series of factual statements that show the tangible results of your products and services. It must be targeted to the customer. It’s not about the characteristics of your products and services, but how they meet the specific needs of your customers. In other words, the customer is the key to the entire process; therefore they drive the value proposition. So what makes a compelling value proposition?
Specific
Three key components for developing a value proposition must grab the customer’s attention. First, your value proposition needs to be specific. What you uniquely claim that set’s you apart from your competition? Everyone talks about increasing revenue, decreasing costs and improving customer retention, but what makes you different? What do you specifically deliver that customers see as a benefit to their businesses? Here is how Dell answers this question:
Dell Computers began with a unique value proposition that it would custom build a computer, exactly as and when a customer orders it, and deliver it at a very competitive price, because it’s “just in time” (JIT)system eliminated the cost of overhead and mistakes in calculating demand.
Dell makes its value proposition specific by talking about the uniqueness of their JIT system which has set it apart from their competition by delivering exactly what the customer wants, when, at a very competitive price.
Targeted
The second component of your value proposition needs to be targeted. Who are you addressing? Are you trying to go and inch deep and a mile wide or a mile deep and an inch wide. Can your products and services be for anyone as Wal-Mart touts- Everyday Low Prices? Or are you addressing a very specific market niche like BMW– The Ultimate Driving Machine? It is all about the specific needs of the customer. Do they have a need for low prices (what they value) or prestige (high price and luxurious as a BMW)? Again, knowing your target audience is critical to your success by understanding it’s not about selling your products and services as much as it is about meeting your customer needs.
Having a value proposition that is specific, targeted and tied to your company’s strategy is critical in capturing your customers.
Good Selling!