The Value You Propose to Give to Your Customers
Is it important to articulate a value proposition?
The honest answer is yes, if you want to take your ‘idea’ to being a successful business then you will, must in fact be able to say definitively what value you provide to your customers.
In its simplest form a value proposition is a positioning statement that explains what benefit your company provides for who and how it’s done uniquely well.
It should describe your target buyer, the problem you solve and why you’re distinctly better than the alternatives.
Let’s begin with the problem part, it’s always a help to understand if there is a problem that needs to be solved. Charles Kettering, inventor and entrepreneur once said that “a problem well stated is a problem half solved”. Just think about that for a moment, he’s saying that that if you really stop and think carefully right at the outset that you can stop yourself doing what a lot of us do, which is to dive-in and reach for a solution. Quite often not to THE problem but A problem, just not the right problem.
Okay, so now we know we have to think, we have got to decide where we are right now.
Q1. Does your solution, your product, your service fix a problem for your customer? If it isn’t solved are the consequences real and measurable? What are the consequences of inaction? If the answer is by doing nothing catastrophe will follow then you have a solution to a problem. If there is a person with responsibility for taking action and being held to account for the inaction, then they are the person to target the solution to.
Q2. Are there implications of regulatory or governance control at play? If the answer is yes, then the person who will be faced with the governing authority is the person to target.
Q3. Is it a priority for the customer company? The level of urgency will dictate the buying decisions, if solving the problem is not viewed as urgent then you won’t have the attention of the company. If solving the problem is urgent then finding the person responsible for scheduling the solution is the person to target.
Q4. Is there an absence of valid solutions to the problem you are looking to solve? By focusing on market areas not presently addressed, on the ‘white-space’ in a market segment then you know you have the best opportunity at building a solution to fit the gap.
Quantification of the problem; Is the problem BLATANT, LATENT, ASPIRATIONAL or CRITICAL?
Latent problems are not seen, they’re hidden and so even if you have an amazing solution to the problem it won’t fly, nobody will buy.
Aspirational problems by their nature are optional and you really have to be in the selling luxury for any solutions to these kinds of problems.
Blatant and Critical problems on the other hand are far more acute and so you want to be in the business of solving blatant and critical problems for your customers.
So… what do you have that your most sceptical customer would want to buy?
By looking at the problem differently, by offering benefits over your competitors you can transform how the problem is addressed. If you also have intellectual property over your solution you have an automatic barrier to others looking to compete for the customers you serve. The most important thing to have thought, is a disruptive technology or approach. Simply being faster and cheaper isn’t enough.
Take for example Evernote who say they set out to “help the world remember everything, communicate effectively and get things done”.
All in one place the app that records, stores and allows you access on the go all of your recorded thoughts, ideas and preserved experiences. Think you can do that with a note book and photo album? Think again.
Right so you’ve formed the problem and think you might have a solution, now you’ve taken your idea to a potential business model. Now you have to build your value proposition.
Follow a framework (this is not an original idea but it is typical, consistent and reusable)
When setting out the value proposition for FINNA I used this formula;
For – FINNA is for people looking for inspiration in a personal/business sense
Who are dissatisfied with – using books and paid for services for short and simple hints
FINNA’s product is – an on-line blog
That provides – short easy to read articles, free to access that inspire people in a personal/business sense unlike paid-for print media and weighty business school books
So you can now see that the FINNA Value Proposition is;
Help for those who are interested in personal and business development, free to access and provided in short easy to read articles accessed on PC, Lap-Top, Tablet and Phone.
So what’s your value proposition?
As ever, thank you for reading this blog post.