Is there any value in a value proposition?
Cecelia Haddad discusses how to develop a value proposition that only you can own.
For a builder, as with any trade, growth is essential. It isn’t enough to just be good at what you do and simply saying that won’t necessarily bring new clients. Future homeowners looking to find a builder need a reason to make a beeline for your business and that is where a value proposition comes into it.
What is a value proposition and why do I even need one?
If you think about the reasons you make purchase decisions every day such as the best price, best value, the fastest delivery, highest quality, best service or just something that satisfies your needs and you have found what you are looking for and made a purchase decision quickly, then chances are that brand or organisation has a well thought-through value proposition.
Not having a value proposition will be detrimental to your business and probably most significantly, cause your customers to move onto another option. People are too time-poor to have to dig too deep to find out what you can offer and if you can meet their needs. Your value proposition needs to be clear and upfront to ensure your company or brand is chosen in the purchase decision process.
Messages are the most important components of a communications strategy and the best value propositions are the ones that speak concisely about your company or brand.
What to use a value proposition for
A value proposition is the core of all your communications – internally and externally. It will give your audience the reason they need to connect with you and enable you to focus on delivering what will grow your business.
Value propositions aren’t tag lines, advertising slogans, mottos or long winded explanations of your business. They are simply a bite-size, to-the-point summary of what you want your audience to believe about your brand or organisation that cannot be claimed by anyone else.
A true definition is: an innovation, service or feature intended to make a company or product attractive to customers or a position statement that explains what benefit you provide for who and how you do it uniquely.
Here’s an example: For people who want a high quality home on time and on budget every, Bob’s Building Co is a multi-awarding winning home builder with a 100% customer satisfaction rating.
Sounds pretty straightforward right? Well it is, but it does take considerable time and thought and is usually developed through a long and considered team workshop process. This is not something that can be bashed out over a cup of coffee and the testing phase will demonstrate why this is the case. Below are the steps required to develop a value proposition that will stand the test of time.
PHASE I: RESEARCH
Dig deep because this part of the process is the most important. As you well know, if you don’t get the foundations right, a structure will collapse. Beginning with the end in mind, answer the following questions:
What are you internal strengths? Features, unique points that help you acquire new or maintain existing customers.
What are your customers’ perceptions? What are their drivers? What do they say (and think) about interacting with your business? What are their concerns/barriers?
How are you different to your competitors? Who are they? What are they claiming? And what do you do differently and better?
Essentially you want to know why customers choose you. If you don’t know the answer, research will be essential. It is easy for an insider to guess why customers choose you; however, your perceptions may very well differ to those of your customers.
PHASE II: FORMING YOUR VALUE PROPOSITION
A value proposition can appear in many ways but fundamentally it should contain the following four components:
Target Audience – who are we talking to?
Summary – of who we are
Benefit – why our customers ‘buy’ from us
Justification – reasons to believe this is true
An example might look like this:
For developers who are looking for a reliable project management team, our company provides a risk-free service that delivers on-time, on-budget buildings every time with a 100% customer satisfaction rating.
The four components of the value proposition appear in the above example – audience, summary, benefit and justification. Once you have drafted your value proposition, there is just one more hoop to jump through and it’s a big one.
PHASE III: TESTING ITS VERACITY
For a value proposition to truly work it needs to pass the test, answering yes to the following questions:
– Is it true to my brand personality and values?
– Will this message influence behaviour?
– Is it unique to my brand/company?
– Can we deliver on this?
– Can it be copied easily?
– Can we keep up this proposition in the long term without detriment to our business?
– Can we back this up?
– Does it pass the ‘so what’ factor?
If testing your value proposition fails one or more of the above, it will require a rethink and further consideration.
I strongly recommend using someone outside your organisation to test the veracity of this value proposition before giving it the final stamp of approval. There is nothing like an external perspective to put your claim under the microscope and importantly test its believability.
Now that you have your value proposition, its time everyone else knows what it is.