“The grass is always greener over the septic tank.” – Erma Bombeck
It’s easy for entrepreneurs to covet their competitors’ blessings and decide that mimicking their products and services will grant them a similar fortune.
This is like stepping into the ring with Mike Tyson and trying to bite his ear off. You’re going to get knocked out.
At the heart of every competitive advantage is a unique value proposition.
Your value proposition is the compelling factor that attracts customers to buy from you, not them. It’s more than an outline of your product’s features and benefits. Instead, it’s what you stand for… and what you stand against. It’s a compelling promise with self-imposed punishment that convinces customers they should choose your solution over the alternatives.
Perfecting your value proposition is the prerequisite to increasing your sales and making the most out of your marketing efforts. After all, it’s your brilliant buying experience that makes up the stories that your marketing team presents to the universe. In this article, we’ll dig deeper into what it is, the advantages, and how you can craft your own value proposition.
What is a Value Proposition?
A value proposition is a complete and concise summary of the advantages that your customers can expect after using your products. While great companies have a few strong value propositions, many started out with one strong one and built more from there.
To further understand the meaning of value proposition, it’s important to first investigate what goes on in your customer’s psyche.
Anyone who steps into your business already has a mental picture of their desired outcome. That’s why they’ll always choose the product or service that satisfies their felt needs, extending their consideration well beyond the point of purchase.
That said, a value proposition is NOT only a mere tool that makes products more attractive to customers. In fact, rarely are value propositions the products themselves. Instead, it is the value you vow to deliver and the most prominent pain and pleasure points you promise to satisfy your customers should they decide to purchase.
Normally, it falls into how your products or services can be advantageous to them in these three aspects: money, energy, and time.
To ignore the actual felt needs, you’ve already lost the battle of value propositions if your products or services don’t relieve the pain and pressure being applied to the buyers’ money, stress, and time. When you can add further value by delivering positive, even delightful outcomes on their money, comfort, and time, you become the front runner for winning the sale.
Think of it this way.
Businesses don’t compete on the set of products or services they offer but on how they uniquely address the value proposition to the end-user. The value proposition includes all the tangible and intangible experiences that customers may gain (or be free of) in exchange for their money, a little bit of their time, with the least amount of stress.
Three touchstones make a compelling value proposition:
- Authenticity. What makes your approach to delivering the solution more special than that of your competitor? Are you willing to place self-imposed consequences on yourself if you fail to live up to your side of the bargain?
- Solvability. How will your holistic solution address your customer’s problems? Have you MET (money, energy, and time) their actual felt needs first?
- Exclusivity. What gives your product a competitive advantage over the existing alternatives? What are you doing that your competition wouldn’t immediately say, “me too”, as well?
Without the elements above, you may fall into the trap of marketing a very weak sauce that you call your value proposition. This will hurt your business in the long run.
Benefits of a Clear and Compelling Value Proposition
A great value proposition is unique to your brand. Done well, you can frame up your value proposition to align directly with what you stand for and what you stand against. The better it actually satisfies deeply felt needs, the more powerful your value proposition. Here are 5 ways it can benefit your business:
Easier to Say Yes to
Your value proposition is what differentiates your business from all the others. Customers are naturally intuitive. They will pick up on what makes your business worth the risk of their money, energy, and time.
One way that a value proposition benefits your business is that it helps potential customers quickly understand what you offer. The more satisfying the answer, the more likely you are to get the call.
Customers already have a preconceived notion of what they want to achieve before they dip their toes in your business. For this reason, a great value proposition will promptly address the question “what’s in it for them.”
If the answer is not clear, customers will look elsewhere.
Address this by frequently reflecting on your value proposition throughout your marketing materials. Make your value proposition a core element of your brand identity.
Path of Least Resistance
A solid value proposition will help your audience fully understand the impeccable value of your products and services beyond the nuts and bolts. When you make a clear and easy path to the appointment, you eliminate any possible friction points. Humans naturally follow the path of least resistance in an effort to avoid pain and seek pleasure.
If your top-notch products and world-class services demonstrate a simple, safe, and affordable value proposition, customers are likely to become engaged with what you offer.
The Good Prospects
A value proposition is always customer-centric. At the core of your proposed value are remedies to the pain points that your target customers are feeling.
When you build your value proposition on this fact, you prop your business up to attract more of the ‘good prospects’ and secure higher-quality, higher intent leads — the ones who are more likely to convert into buying customers on the first sit at a higher average sale and profit. We call these High CAP customers. They are your Relational Buyers. Your GlenGarry Leads.
We’ll use a residential home service business to provide specific and relatable examples, but the principles apply across every business. For example, if your competitors are bent on providing a free in-home diagnostic as their value proposition, they’re likely to attract prospects who gravitate to cheap prices. This means you will be competing for the same transactional shoppers who care most about paying the lowest price rather than the relational buyers looking for the best value proposition. The best solution. Not the cheapest solution.
It’s not what you say, it’s how you say it.
When your value proposition finds a unique way of relieving the stress — the pressure — on an otherwise unpleasant experience, you win from your unique and unexpected angle of approach.
Remember, both time and money also create stress. Their system breaking down is always inconvenient and an unwanted draw on their time and money resources. Relieve the stress in money, energy, and/or time, with a better story than your competitors, and you win the value proposition game. The good customers are looking for the best solution, the one and done, the set it and forget it option. Show that story and speak the language of the ‘good customers’.
Stand 600 ft Above the Crowd
Unless you are the only residential home service provider in your area, you’ll need to come up with a unique and persuasive value proposition that sets you apart from the Sea of Sameness.
While all your competitors are running around saying the same stuff as everyone else, your unique value proposition stands you 600 ft above the crowd of competitors.
Nobody cares about your company except you. Nobody.
Everybody cares about themselves. Self-preservation. Security. Belonging. Safety.
They are looking to protect what they have. Money, energy, and time are all they feel they can control in the exchange between you and them. How do you put them in the driver’s seat?
You’re selling an externally triggered, grudge purchase. How do you help them win in a trustworthy and grateful manner? Answer that question better than your competition and buyers be buyin’.
Clarity = Conversions
The only way you can have a clear message is if you speak the same language as your customers. This begins by understanding their temperament toward your purchase.
They will either be a Transactional Shopper looking for the cheapest price or they will be a Relational Buyer looking for the right solution. Both have the same 3 felt needs — money, energy, and time — but the Transaction Shopper values money more than time, while the Relational Buyer values time more than money. Regardless of the temperament of your prospect, they are both looking to avoid pain and pursue pleasure (a favorable end).
A powerful value proposition must communicate your message clearly. This means being simple and forthright in your communication. Get right to the pain. Speak to the pleasure. Cut out all the boring bits.
5 Questions When Creating A Successful Value Proposition
There’s no question that value proposition is instrumental for success, but this is just as valuable for budding businesses. There are companies like Apple that can rely on brand loyalty regardless of what new product or service they introduce. Growing brands, on the other hand, need to articulate their value proposition to get the message of why they’re worth the gamble.
This begs the question: how exactly do you make a successful value proposition? Here are 5 questions to guide you, with help from an expert, Michael Lanning:
1. Who is your ideal buyer?
Every value proposition is customer-centric. It’s meant to soothe a pain point that customers have while filling their reward bucket full of happy chemicals. It’s only natural to know your prospects before crafting a value proposition.
Are they a Relational Buyer or a Transactional Shopper? Relational Buyers are either the busy Jones’ trying to keep up with the others or they are Daddy Warbucks, looking for a brilliant buying experience. These folks appreciate their time more than their money (not to suggest money is no object. That’s just nonsense).
Transactional Shoppers covet their money more than time. Without a unique value proposition that speaks the language of numbers, ROI, and how they win and you lose, you won’t win them as prospects. 16% of these find folks are Oxygen Thieves looking for you to give them disproportionate volumes of your time and money to offset their investment. Rarely worth the time and effort. While most of your Transactional Shoppers are Birkenstock Professors looking to calculate all the hard and soft value you offer. If the calculation results in a favorable equation for them, they buy.
2. What is their urgency?
Value propositions do not require a time horizon. A vague value proposition won’t instill the desired action, while a confident and bold value proposition will help them make the decision to take action with you.
When your proposed value does not outweigh the actual felt needs from their pain and pleasure points, they have no sense of urgency to act.
When you craft a value proposition that sparks an emotion, you’re onto something.
3. What action do they take?
Your value proposition must always come with a corresponding action from your customers. In residential home services, it’s to book an appointment with you.
This is where shit gets real. Why? Because if your appointment experience is inconsistent with your value proposition, you lose the appointment opportunity.
When you make it super easy for a person to book with an online scheduler or a phone call, reassuring them that they made the right choice and that this will be a fast, easy, and safe experience, you close appointments.
When your advertised proposed value matches your buyer’s experience, you are demonstrating congruency. Congruency helps a buyer reconcile your value proposition in their mind. Essentially, it feels right.
4. What are their alternatives?
Competitor analysis is another way to fine-tune your value proposition. What are your competitors speaking about? What are your customers speaking about?
For example, as we head into a recession, your competitors are still talking about buying new units. Great deals. Rebates, discounts, coupons, tent events, giant inflatable gorillas.
Quietly, you’re speaking to the dog about what the dog cares about. Your customers would be very grateful to get another couple of years out of old bessy if they could during these dire times. If you were to talk repair, not replace at a fraction of the cost, wouldn’t you want a second opinion?
You’d be surprised to know how many new units you will continue to sell at a higher first visit conversion, average sale, and profit. While your value proposition seems ludicrous to any residential home service contractor worth their salt, our clients are quietly closing deals at twice their original rate.
Be better than the alternatives in the eyes of the beer holder and you win their hearts.
5. What is your advantage?
You gotta figure out your unique value proposition. When you lock in the right message, you will resonate with the ‘good customers’. It’s weird how things seem to just get easier.
People don’t buy what you do, they buy why you do it. So? Why did you decide to be an essential service provider? Why do you take on the stress of entrepreneurship? Why do you care?
When you help people win in a trustworthy and grateful manner, you are adding value. Find your value proposition and shout it from the rooftops.
Why You Need To Make Sure Your Value Proposition is Properly Communicated to Your Customers
A strong value proposition is the fine line that separates booking the appointment and losing to the competition.
That’s why it’s imperative that you have a clear message and simple pathways for prospects to take action on your value proposition.
When you’re not clear on why your prospects are better off with your product or service compared to customers, go back to the drawing board and give your value proposition a hard look.
At least half of our clients come to us with no unique value proposition. The other half has a value proposition, but it is sitting idle as an unleveraged asset. When you really dial in your value proposition, speaking directly to your prospects’ actual felt needs, your brand story comes alive.
Developing a winning value proposition is simple, but not easy. With an expert guide, it can be a lot more fun. Wizard of Sales® always has his doors opened for residential home service business owners looking to craft their unique value proposition Book a call when you’re ready to stand 600 ft above the crowd.