26 January 2018

The Importance of Defining a Value Proposition

 

What is a value proposition?

A term often used by marketers and businesses, a value proposition is defined simply by Investopedia as the “statement that a company uses to summarize why a consumer should buy a product or use a service.”

Value propositions must be consumer-centric. That is, a value proposition should focus on the benefits the brand (and their product or service) will bring to consumers.

It’s important to remember that a slogan is not the same as a value proposition, but they can become one and the same.

In essence, your value proposition should answer these three questions:

  • What does your company do?
  • What are the key benefits of your product/service?
  • How are you different or unique?

An example of a company with a well-constructed value proposition is Deliveroo:

“Your favourite restaurants, delivered fast to your door.”

This answers all three questions succinctly and is a powerful example of a well-constructed value proposition.

deliveroo value proposition

Another fantastic example is SEO giant Moz:

“5 billion searches are performed every day. Be found.”

Their proposition is the first block of text on their website, so there can be no mistaking what they’re offering or how it can help you.

Ronseal are another brand with a fantastic value proposition.

“Does exactly what it says on the tin”

While not explicitly answering the three questions, the implicit answers more than satisfy the necessary elements of a strong value proposition and Ronseal more than deliver in that respect. It is important to remember that a slogan is not the same as a brand proposition, but it can become a great way to instil your brand’s message and benefits.

ronseal value proposition

Why create a value proposition?

Brands need to convince potential consumers quickly of their importance and the added value their product or service will bring to consumers’ lives, over competitors. A value proposition is an efficient, consumer-centric way of doing this.

Value propositions are a fantastic tool for helping increase brand awareness and loyalty. Proving that you deliver what you promise to consumers is vital for creating loyal customers who will return to you in the future.

By creating a value proposition, you will appeal to your target audience and have a higher chance of converting them to customers because you are speaking directly to them and providing a solution to their specific needs. This is why understanding your target audience, or buyer persona, is so important.

Your value proposition is also a great way to set you apart from your competition. By highlighting your unique benefit to consumers, they will understand why your product or service is best suited to them over a competitor.

How do you create a value proposition?

You can’t create a value proposition unless you have a solid understanding of your target audience. We would recommend holding buyer persona workshops to nail down exactly who it is you are targeting and what their needs are. You need to be completely sure of how your product or service will intersect with their routine and where. Get to grips with their behaviours, watering holes (where they hang out online) and their motivations for looking for a product or service like the one you have to offer.

Slack are another company with a transparent, effective value proposition that drills down to answer the needs of their target audience. A multifunctional work app (with an all too addictive Giphy integration), their value proposition highlights exactly who they’re targeting and how the app can benefit these people.

“Be more productive at work with less effort”

You’ll find a distillation of their value proposition in every reason they give for choosing to use their service. Even their slogan, “Be less busy”, is a compact summary of their value proposition and furthers the idea that Slack is the go-to work app for boosting productivity, especially when you consider how easily it integrates with other apps and tools.

Next, it’s time for some serious self-reflection. What makes you different? How does your company stand out against competitors? Be brutally honest here. Focus on the benefits of your product/service and your company. This is not the time to highlight features of your product or service, but rather capture the essence of your brand and show what sets you apart.

Including your brand’s name is a good tactic too. It will help with brand recall and plants a subconscious seed for consumers to help find you again if they decide to do some more research into your brand and product/service.

Thomas Cook have expertly crafted a value proposition in this vein:

“Don’t just book it – Thomas Cook it.”

thomas cook value proposition

Sum it all up

A value proposition combines conciseness with advertising, i.e. selling the product or service. Keep your value proposition short and sweet – distill the most important information that will set you apart from competitors.

Having a value proposition will help increase brand awareness and will signal to consumers exactly what they need to know about your brand and product or service in a single sentence.

Want to read about two top British brands who communicate their value propositions effectively? Download our case study today.

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