If your struggling to grow your business, you probably have a weak value proposition—it’s as simple as that. Its a common problem; and in fact, lack of focus around a core value proposition is the root cause of most business growth challenges. This is why your value proposition is a critical piece of business strategy.
After you define a target market, you must work to clarify your ‘desired’ value proposition. Without it, its hard to resonate strongly with customers and can invisibly destroy your business. But what exactly is a value proposition? And how is it different from ‘elevator’ pitches and USPs?
“Try not to become a man of success. Rather become a man of value.” — Albert Einstein
Elevator Pitches & USPs
Value propositions are often confused with elevator pitches or unique selling propositions (USPs). But its impact on your company’s success is fundamentally different.
An elevator pitch answers the question “what do you do?” Its a one sentence answer that defines your customer and the general area you help them with:
“My business works with small companies that need help designing their products”
An elevator pitch is the foundation of a value proposition; but much weaker.
A USP answers the question, “what makes you different?” And looks like the following:
“We are the only company to guarantee service in two hours or less”
The USP is another piece of the value proposition, but again it lacks the impact of a strong value proposition.
The Value Proposition
A value proposition is a clear statement of the concrete results a customer will get from purchasing and using your products and/or services. It is focused on outcomes. So as opposed to the above examples, the smart business person will always speak in terms of results that products can create.
A good example might be: “Our products help people leverage the internet to triple their market reach and cut marketing costs in half when launching new products.”
Value As Strategy
Strategy is all about direction and sales are all about creating results. Since the creation of value is the end destination in business—it is important to establish what your value proposition will be in the future.
So as a first matter of business, figure out what your value proposition will be to customers. If you will help improve operational efficiency, its time to assess by how much. Then talk to your customers and ask them if your plan is based in reality.
To roll this out as a piece of your plan, simply state a value goal in your business or marketing plan, e.g. “we plan to reduce Cost of goods sold while improving inventory controls for large food carriers.”
Once you have established your core “value strategy” you will have a measuring stick to measure your efforts. And then you can use your value strategy as a basis for making decisions—whenever you have a choice to make, you can ask yourself, “will this improve our value proposition.”