Look around your niche. Your prospects have plenty of other options to choose from aside from your products and business, right? So the question is, why should they do business with YOU?
That’s a question you need to answer in a succinct way. Because you know what? Your prospects aren’t going to spend even a second trying to figure out the main reason they should buy your products rather than your competitors’ products. If you don’t tell them – and do it quickly – they’re simply going to move onto your competitors who has a clearer message.
That’s why you need to convey this “reason why” message in a succinct statement. And this succinct statement is called your value proposition. It tells your customers how you solve their problems, what sort of benefits you offer, and why they should do business with you.
Now that you know what a value proposition is and why you need one, here’s the next question: how do you create an effective one?
In order to determine how to create an effective value proposition (VP), you need to first understand what makes a good VP. Here are the characteristics:
· It’s succinct. Your prospect must be able to read and absorb it in three to five seconds.
· It attracts prospects. The first time they see your value proposition, it hooks their interest and keeps them engaged.
· It helps close the sale. When prospects are internally debating whether to buy your product, your value proposition gives them the “reason why” they should buy.
Now keep those in mind as you walk through the steps of creating your value proposition. Here’s an overview:
Step 1: Identify Benefits
Step 2: Indicate Values
Step 3: Individualize Your VP
Step 4: Improve Your VP
What does all this mean? Let’s take a closer look at each step…
Step 1: Identify Benefits
The first thing you need to do is determine all the benefits that your product offers to customers. A good way to do this is to identify each feature of your product, and then identify the benefit (which is what each feature does for the customer).
For example, a feature of a product might be that it’s available as a downloadable .mp3. The benefit is that customers can listen to the product anytime, anywhere (which saves them time by allowing them to multitask, such as listening in the car).
Another example is that a dieting product may include features such as meal plans, grocery lists and recipes. This makes it quick and easy for the customer to create delicious meals.
Mini assignment: List all the benefits of your product.
Next…
Step 2: Indicate Values
Now your next step is to take a look at the list of benefits you just created, and indicate what value those benefits provide to your customers.
In general, there are five types of value that your product can provide. Before you craft your value proposition, you need to determine what value you provide across all five categories.
Here are the five types:
· End value. What sort of guarantee do you offer? How committed are you to customer satisfaction?
· Economics. Is your product less expensive than the competitors’ products? Does your product save customers money when they put it to work for them?
· Engagement. How does your product engage customers on an emotional level? How do they feel while they use your product?
· Effect. What effect does your business have on the prospect in a greater sense? What effect does your product have on the customer’s status, the community, on the environment, or with regards to something bigger?
· Equip. How does your product equip customers to solve their problems? How is this different and better than the competitors’ products?
As you’re going through these five types, it’s a good idea to look at “before” and “after” states.
For example – what is their emotional state BEFORE they used your product versus AFTER they used it?
Or take a look at the “Equip” category. How did your customers used to try to complete a process or achieve some goal before they used your product, versus how do they do it with your product? What changed?
Let’s go back to the example of the dieting product, where the focus is on making it quick and easy for anyone to lose weight. This product might offer the following value across the five categories like this:
· End value. You guarantee that your diets make it quick, easy and convenient to lose weight. (Whereas before dieting was difficult and time consuming.)
· Economics. The product saves people money. (Whereas before they needed to purchase expensive pre-packed diet meals.)
· Engagement. The product produces a sense of confidence, attractiveness, and pride as customers begin to lose weight. (Whereas before they felt unattractive, depressed and even disgusting.)
· Effect. The product may be a step in reducing dangerous obesity and developing healthier eating habits. (I.E., This is a movement that’s gaining momentum, and this product contributes to that.)
· Equip. This product makes it convenient and easy to lose weight, and the meals are so good that the whole family will enjoy them. (Whereas before the dieter needed to cook separate meals for the family.)
NOTE: For the above example, I only listed one or two values that are linked to the benefits of the product. When you create your list, you’ll want to brainstorm as many values as possible across these categories.
Now it’s your turn…
Mini assignment: Brainstorm what value your product provides for each of these five categories.
Next step…
Step 3: Individualize
In this step, you’re going to crystalize your value proposition.
Now, in order for your value proposition to be effective, it absolutely MUST be of interest and value to your target market. It does you no good to pick a value proposition that your market doesn’t care about.
That’s why you’ll want to go back to the beginning of this guide and look at your research, interviews, surveys and other notes about your target market. Now compare your target market’s values to the value your product provides.
Where is the overlap? ______________________________
Any value that your product provides AND that your market also values is one for you to consider for your value proposition statement.
Now the next step…
If you look at the values you brainstormed in the previous step, you may notice that your competitors provide the same types of values. If you create a value proposition based on the exact same things your competitors offer, then your value proposition isn’t going to serve you very well.
Remember, your value proposition tells prospects why they should buy from YOU instead of your competitor. That’s why you need to use your VP to differentiate yourself from your competitors. You need to INDIVIDUALIZE your VP and set yourself apart.
As such, your next step is to research your top competitors. Take note of their value propositions (which are usually easy to find since they’re placed in predominant locations, often on the front page).
Now look back to your own list of potential value propositions. Cross off any potential propositions that your competitors are already using, or any propositions that can’t be tweaked/individualized to set your products apart from the competitors.
At this point, your list of potential value propositions just became a short list. Now what you do is select the value proposition that your target market strongly values and your product greatly delivers.
Mini assignment: Once you’ve completed these steps, then write down the value proposition that you’ll be using: _____________________________________.
Don’t’ worry about creating a polished statement at this point, because that’s what you’re going to learn now to do in the next step…
Step 4: Improve Your VP
You now know, in general, what statement you’d like to use as your value proposition. Your next step is to improve this statement by making it succinct and compelling.
Generally, your value proposition will have the following parts:
1. A short headline.
2. A subheadline that elaborates.
SIDE NOTE: Those are the two essential parts. There are also two optional parts:
3. A short, bulleted list (benefit statements).
4. A visual representation of your VP (such as a graphic or video).
For the purposes of this guide, we’re going to focus on how to create the two crucial parts of your value proposition: the headline and subheadline. And that’s because we want to create a value proposition that can make a huge impact in three to five seconds.
Let’s start with the headline. This should describe your value proposition in just a few words.
What you do first is draft a longer statement just to get clearer about your value proposition.
Specifically:
[Name of your product] helps/enables [the type of people who buy your product] to [get some value – to experience the desired “after” benefits] with/by [some special way that differentiates you from the competitors].
Let’s use our diet product as an example again. Here’s an example statement:
Whiz Bang Weight Loss helps dieters slim down, feel good and get healthy with a complete set of easy-to-use and delicious meal plans and recipes that the whole family will enjoy.
Now, what you want to do is take this statement and make it more succinct for your headline (and then elaborate in your subheadline).
Let me give you an example:
VP Headline:
Lose weight and feel great with these quick and easy meals your whole family will enjoy!
VP Sub-headline:
Use this complete set of delicious meal plans, recipes and shopping lists to make it easier than ever for you to lose weight, get your confidence back, and feel 10 years younger!
Now let’s look at a couple real-life examples of how businesses present their value proposition in a headline and subheadline:
WordPress:
WordPress is open source software you can use to create a beautiful website, blog, or app.
Beautiful designs, powerful features, and the freedom to build anything you want. WordPress is both free and priceless at the same time.
Stripe:
The new standard in online payments.
Stripe is the best software platform for running an online business. We handle billions of dollars every year for forward-thinking businesses around the world.
Now it’s your turn…
Assignment
You’ve received mini assignments throughout this particular step. Now it’s time to pull it altogether to create your value proposition. Go ahead and:
· Identify the benefits your product provides and the values of these benefits.
· Check these values against what your market values.
· Research your competition to avoid creating a “me too” value proposition.
· Choose a value proposition.
· Create your VP statement.
Write down your final statement here: ________________________________
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