Value Proposition Basics
Your customers don’t want drill bits, they want the holes they produce. In other words, they’re attracted by value, not products. So for your marketing to have the most impact, it must be based on your customers’ point of view.
However, it can be a challenge to find out what they think has value. And to stand out among competitors, you’ll need to have a meaningful difference. Of course, you’ll need proof too. There are six elements in a Value Proposition. And for the best results, you’ll need to examine them in the following order, because each depends on the previous. Here they are:
1. Target Market
The more you know about your ideal customer firmographics the better the rest of your marketing will be. Therefore, understanding which specific group of customers you’re targeting is the first step in the value discovery process.
2. Customer Defined Value
For the purposes of marketing, what your customers perceive to be true about your products is more important than what you know to be true. Therefore, understanding their point of view is the second step. This is not easy because it means you must create a dialogue with prospects and customers. You can start by interviewing your salespeople and customers.
3. Customer Desired Benefits
Before making a purchase, your customers will carefully weigh their costs and risks. More than just assessing your price or product features, they’re considering the total value being offered. And this could include product functionality, sensory impact, emotional associations, rational conclusions, price, value and access or convenience.
4. Product Offerings
Step four is where you redefine your products from your customer’s point of view. For example, this could mean categorizing or re-naming products or packages to make them more appealing to customers. And this could be done over your entire product life cycle too.
The higher the cost, the more likely customers are to consider alternative products. Having a unique selling point that explains why you’re better and gives you a competitive advantage. There are many ways to stand out. These include owning an attribute, innovation, heritage, or your production process. A powerful marketing tactic is to create a brand promise, or redefining the prospect’s problem in a unique way.
How do your prospects know you can deliver on your promise? Since B2B buying is typically done by committee, backing up your claims with success stories is a necessary part of your value proposition. This could include case studies, testimonials or industry reports. Then you’ll have a much stronger argument for winning their business.