Marketers throw around the term “Value Proposition,” but what is it, really? And why is it important to your business? Learn how to write a value proposition by first discussing what it is, and then looking to three different methods of writing one:
What is a value proposition?
A value proposition is a simple statement that summarizes why a customer would choose your product or service. It communicates the clearest benefit that customers receive by giving you their business. Every value proposition should speak to a customer’s challenge and make the case for your company as the problem-solver. It serves as the bridge between these two aspects of your work. It’s a mantra that unites the two halves of the whole business.
A great value proposition may highlight what makes you different from competitors, but it should always focus on how customers define your value. Likewise, conversations around brand strategy and taglines should stem from a value proposition, but they aren’t one and the same.
You may be wondering: Why bother learning how to write a value proposition? It’s like investing in the foundation of a house. You may not see the foundation, but everything you do see — and the long-term safety and security of your home — rest on it having a strong place to start from.
How to write a value proposition: 3 options
If you’re intentional about creating a value proposition, it can help clarify the way forward for your entire company. However, including too many voices early on can water down your intent in an effort to make everyone happy, and, ironically, the results won’t work for anyone.
Rather than get everyone involved, start with a small group of people (no more than three) who can set aside the time to hone a few compelling options.
Here’s how to write a value proposition three different ways, from complex mapping to a simple formula. Start with one or try all three in a workshop to refine your ideas with greater precision.
1. Map out a value proposition canvas
Peter Thomson’s value proposition canvas explores the different components of a company that contribute to a strong value proposition. Thomson believes that a process like this can help team members get to “minimum viable clarity,” which can be whittled down into a one-sentence value proposition.
Thomson calls a value proposition “a crunch point between business strategy and brand strategy,” and he created a model that syncs the two strategies. There are seven areas to explore, each of which takes up a section in the map:
When you explore each section of the canvas, do so from the perspective of the customer. While writing out the benefits of your product, imagine how it increases pleasure or decreases pain for the person using it. Approach the features and the experience that way, too: How do the features make the customer’s life better? How does the product experience make a customer feel?
Next, you’ll dive into the customer’s wants (emotional drivers), needs (rational motivators), and fears (undesired outcomes). Remember that even when consumers are making purchases or investments on behalf of a company, they can still be guided by emotions.
In particular, try to understand whether a product or service affects a buyer’s perceived likelihood of failure, their anxiety, or their reputation at work. You can use Bain & Company’s 30 “Elements of Value” and its B2B counterparts as a roadmap for articulating the ways your company gives the customer value within this context.
2. Ask Harvard Business School’s essential questions
Harvard Business School’s Institute for Strategy & Competitiveness simplified how to write a value proposition with just three prompts. Just as Thomson does, Harvard argues that a value proposition serves as the connection between a company and its customers:
“While the value chain focuses internally on operations, the value proposition is the element of strategy that looks outward at customers, at the demand side of the business. Strategy is fundamentally integrative, bringing the demand and supply sides together.”
To create an integrated, cohesive value proposition, start by brainstorming as a group around these three questions:
- Which customers are you going to serve?
- Which needs are you going to meet?
- What relative price will provide acceptable value for customers and acceptable profitability for the customer?
Depending on your product and service, it may make sense for you to start with the first or second question in the list. Together, all three create a triangle that can lead you closer to a succinct value proposition.
Source: Harvard Business School’s Institute for Strategy & Competitiveness
As you move through the exercise, consider which one is the primary “leg” of the triangle. For example, is the greatest value that you offer in cost savings? Or is it that you’re offering a better product or experience at a premium?
Also, think about whether your company is expanding the market by meeting a need that hasn’t been realized. Harvard’s experts use a great example — the iPad. Apple created a new demand that hadn’t existed before the technology hit the market.
3. Try the Steve Blank formula to distill your insights
Steve Blank, a former Google employee who runs the Lean Startup Circle, noticed that many startup founders emphasize features instead of benefits when they try to transform more detailed insights into a succinct value proposition. Instead of summarizing how a company offers value to customers, leaders often get stuck in the weeds.
Blank saw the need for a simple formula to transform a brainstorm into a simple sentence. We love distilling more detailed insights with his method:
We help (X) do (Y) by doing (Z).
Use Blank’s intuitive template to come up with your own value proposition. Remember that the first thing that comes to mind may be the best. Your gut instinct could be spot on here, and that’s what makes this simple solution so valuable.
Your local coffee shop may have a value proposition that’s similar to this one:
We help our local customers to feel good and do good by fueling them up with artisanal coffee in a community-focused space.
Although you may have brainstormed as a group with the other two methods, this time, ask team members to complete this exercise individually. Comparing and contrasting answers afterward can yield helpful insights about each person’s priorities.
Most importantly, as you draft your value proposition, use the language your customers use. If you don’t write your value proposition the way your customers would write it, there will be a big gap between what you say and what they hear. When you use their voice, you cut through the noise.
Source: https://www.helpscout.com/blog/value-proposition-examples/
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