At its core, business is simply about value. It is about providing something of actual or perceived value to your customers at a price they are willing to pay. If you can do this continually over time, you will be successful in business. If you cannot do this as effectively as your competitors, or fail to adapt over time, you will fail.
Being able to communicate “value” to your customers sounds, on the surface at least, to be fairly easy. However being able to distill this down into a pure form is often a challenge for any type of business. For many new businesses, one of the main causes of failure is that they simply do not know how to efficiently communicate their value to their customers. Existing businesses may run into trouble down the line when their market changes and suddenly a business may find itself in a dangerous position in which customers don’t know what value they offer anymore.
So having a strong Value Proposition is essential, but how do you make one? Here are three key elements to a strong value proposition:
It Is Focused
A strong Value Proposition is focused in the sense that it clearly meets the needs of customers. When a customer reads what your Value Proposition is, they should be able to determine what value it offers them, or what problems it solves. If you know your customer, then you understand what needs they have, and problems they face. A focused Value Proposition will ensure your business stands out to them.
It Is Superior
Your Value Proposition clearly shows dominance over your competitors in at least one dimension. Dimensions such as cost, quality or convenience are common advantages, and what element you choose to base your Value Proposition on will vary, depending on what your focus is. A strong Value Proposition also tries to be dominant in as many aspects as they can; the more aspects that are superior, the harder it will be for competitors to counter your success.
It Is Structured
A successful Value Proposition does not exist in isolation. The success of a Value Proposition is completely tied to how it integrates into your overall business model. You can have the best Value Proposition in the world, but if your business model is not set up in a way that can support it, then it is completely pointless. Any good Value Proposition is only as good as the business built around it. Make sure you are considering the strengths, as well as the limitations of your business model when crafting your value proposition.
While there is a great deal of additional work required when making your Value Proposition, the above elements will serve you well to ensure you stay on track.
