This is part one of a series of blogs where I am going to try and demystify the art of designing a compelling value proposition. It’s a term I know can cause some confusion, particularly when trying to move from commoditised products towards value added services. As well as trying to define it, I also wanted to outline the process and tools I use when designing a value proposition.
So let’s start at the beginning. What is a Value Proposition? Actually, let’s start by stating what isn’t a value proposition.
A Value Proposition is not …
A brand slogan such as Nike’s ‘Just Do It’
A vision statement such as Ikea’s ‘To Create a Better Everyday Life for the Many People’
A strategic objective, such as delivering double digit growth by 2050
A list of features, such as the iPhone 12 Pro; a 6.10-inch touchscreen display with a resolution of 1170 pixels by 2532 pixels at a PPI of 460 pixels per inch and 64GB of internal storage.
A Value Proposition is…
A clear and brief statement explaining why your customers should care about you at all and fundamentally why they should buy from you.
Below is my checklist to help you define your value proposition
Totally customer focussed
Details the core benefit customers get from you
Explains why your customers should do business with you
Details the problems you solve and the joy/gains you create
Unique value that customers won’t get from your competitors
Be clear, concise and compelling
Written in a language that resonates with your customer
A value proposition can be for an entire business then shaped for individual product or services resulting in a suite of value propositions. For example, Jeff Bezos explains that Amazon’s core value proposition is based around 1. Low prices, 2. Fast Delivery Speed and 3. Vast selection. But the Amazon Prime value proposition is crafted to highlight the speed of delivery.
What does a killer Value Proposition Look Like?
Book unique homes and experience a city like a local
The original Airbnb value proposition has almost entered folk law for its clear communication and longevity. The clear statement here is that the value is about the uniqueness of your stay, i.e. a home not a hotel and a differentiator being additional bespoke experiences. I think it also appeals to the sense of being a savvy, on trend deal hunter.
In this together. Keeping you securely connected wherever you are
The early Zoom value proposition really differentiated itself from competitors by explaining its features ‘flawless video, clear audio and instant sharing’. Anyone remember the horror of waiting for a Skype call with the pixelated screen and the audio delay? It now focuses on messaging around connectivity and alleviating concerns around security.
It pays to be part of the pack. Laka is a team that looks out for each other. Our collective cover is made especially for cyclists for life on and off your bike
Laka is an insurtech startup that offers bicycle insurance based on a collective model. The real innovation here is the charging model and customers are charged a different amount every month based on the number of claims that Laka has paid out. The value proposition really plays to this savvy tribe.
Who Gives a Crap
Good for the world. Good for people. Good for your bum
Who Gives a Crap is a classic example of moving from a product (yes – toilet paper) to a service; beautifully wrapped sustainable toilet paper delivered straight to your front door. Its playful and although it veers towards a brand slogan there is a clear focus on its strong ethics.
Helping businesses understand their customers and innovate better
Initially when designing my value proposition I started with something about ‘getting new stuff done’ but quickly ditched it for being far too vague and not using customer language.
So, now we have a clear idea what a value proposition is and what it’s not, my next blog will step you through the first part of the process for building your own value proposition. Its worth noting that developing a value proposition takes many iterations and testing to get it right. But the first step involves talking to your customers to try and understand more about their challenges.