From time to time, you may have heard the phrase ‘value proposition.’ If you didn’t (or still don’t) know what that is, you aren’t alone; many business owners have a hard time nailing it down. Yet unless you accurately identify your company’s value prop, your promotional efforts will never be cohesive, nor as effective as they should be if you want the best return on your marketing investments.
Okay, enough dramatic buildup … so what is a value proposition? In simplest terms, it’s the main thing that distinguishes your company from others in your line of work. As practical definition, your value prop would be consistently referenced by knowledgeable consumers—who’ve patronized both your business and your strongest competitor—as their top reason for recommending you.
Hopefully, you’ve picked up on something important about a value prop—reality. It is what it is. You may fervently want customers to come to your store for another reason, and all your current advertising might be centered on another business attribute, but if people come to you because, say, you’re in a great location, you ought to go with that. (Note: Yes, you could change your value prop with hard work, considerable time, and lots of brand management, but you’ll need a good excuse.)
There are basically five categories of value propositions:
Price – if you offer the best prices of anyone around, congratulations! You’re always going to have a marketing advantage with a significant portion of the buying population. Example: Walmart – “Save Money. Live Better.”
Convenience – When you really need something (say, baby diapers at 1:00 a.m.), you know the appeal of ’convenience.’ Location, store hours, delivery service, wide selection … these are all things that can sustain a viable customer base. Example” Staples – “That Was Easy.”
Service – If you’ve ever been in a store where customer service is actually something to brag about, you know how rare—and powerful—it is as a marketing hook. Warning: Stay away from this unless you consistently back it up! Example: UPS – “What Can Brown Do for You?”
Identity – Who doesn’t want to be made to feel special? If that’s your value prop, you may really have something. When we hear that we’re smarter, better looking, or more ‘hip’ than the hoi polloi, we’re often seen coming back for more. Example: Abercrombie & Fitch – “New York.” (‘Cuz New York is cool, get it? FYI, actual headquarters are in Albany, OH.)
Quality/Value – This is ‘price’ for the thinking person. Stressing quality will be a challenge because you’re usually going to have overcome a competitor’s lower initial price point and convince the customer they’re better off with you in the long-run. Still, if the underlying assertion is true, you can still have a powerful brand. Example: Target – Expect more. Pay less.”
You may notice that the preceding examples are mostly business-to-consumer (B2C) rather than business-to business (B2B). (Staples and UPS serve both markets.) These companies were cited because their brands are so commonly known; we’ve almost all visited those stores at some time or at least seen their ads. However, the value prop categories are applicable to B2B companies as well. For example, technology service providers may recognize SAP, a provider of business management software for companies of all sizes and the company’s solutions require significant investments in money and training. SAP stresses quality and value through production gains through greater operational efficiency, and ran a “Run Better” campaign to get the point across.
Another B2B example is ADP, a provider of payroll services for small businesses. By stressing the company’s expertise in all aspects of payroll management (time and attendance, time and tax, human resources), we essentially see the one-stop-shop appeal to Convenience. Yet another, highly professional company with a strong profile is Deloitte. The fact that this global network of accounting firms often run ads with little or no copy—just the company name and an image—gives the impression that Deloitte is the only name you need to know when you’re looking for the company’s exceptional expertise. This puts the Deloitte brand squarely under the Quality banner.
Obviously, every business could claim something worthwhile from just about any of these broad value-prop categories. And frankly, if your business is woefully lacking in any of these areas, you have a major problem. But remember, your true value prop is the one that stands head and shoulders above the rest. And when you make it central to your brand messaging, your marketing will ring true with customers and be all the more effective.
Putting Your Value Proposition to Work
As you can see, a value prop isn’t a slogan or a tagline; though you should certainly incorporate its essence into such phrases—as did our examples. Essentially, all your marketing communications should be a statement (sometimes blatant, sometimes subtle) in support of your value-prop assertion.
Let’s return to the idea that a company is successful because of the great location. This comes under the Convenience heading. An ad might lead with a headline that stresses location by saying something like “Hi, Neighbor!” Then you could follow that up with copy about how easy your business is to reach, your business hours, wide selection … or any other convenience-related feature.
Now you’re probably thinking that a constant focus on some narrow aspect of your value prop will get boring. It would, though perhaps not as quickly as you might imagine. To change things up, you could use some of your secondary value props to support the convenience message. Here are a few lines of mock copy to demonstrate:
We’re the right choice for people on the go! Message: You’re an important, in-demand person who doesn’t have time to go traipsing all over creation in search of this or that. (Identity)
Getting here is easy, being here is great! Message: Once you come through our doors, we’re going to take good care of you. (Service)
What would you rather do with that hour you spent in traffic? Message: Time is money, or at least it could be spent in better ways than trying to reach your competitor’s remote location. (Value)
See, you don’t have to ignore your secondary value props. Instead, you position them to support the overarching idea—like spokes in a wheel. You should do the same thing when introducing new products and/or services. After a while, people will stop thinking of our mythical company as a quick and easy stop on the way home from work. Instead, the brand identity will have been molded into a paragon of convenience and all that entails, simply because the marketing was based on the actual value proposition.
If you’re still trying to figure out what your value prop is, here’s a suggestion: ask people who are familiar with your business. Specifically, ask your customers. Whether through formal survey’s or casual conversation, elicit their opinions and take notes. Your own thoughts might be confirmed or you might be surprised, but either way, you need to know for sure.