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How to Create Your Value Proposition Statement

January 30, 2021 / Comments (0)

How-To-Create-Your-Customer-Value-Proposition

Your customer value proposition statement is the most important statement that your business will make and it is the one that will serve to ignite sales, help you unify your team, and send out the right message to your future employees.

It is a statement that you absolutely must devote your time and energy to — if you are a startup, then you will avoid a ton of future pain when you nail the message; if you are established, it may be time to take another look at what you have and if you don’t have one, then it’s time to get one.

There are 3 simple steps to understand before you start this process and please don’t think that because they are simple and in some ways obvious, that you can skip them and from the customer perspective they are:

  • Knowing the precise commercial benefit that you provide to your customers.
  • Being able to clearly articulate how you provide that benefit with some proof.
  • Being able to explain exactly what you do and how you differentiate from your competitors.

As a business coach and mentor, I see many companies of all sizes struggle to tell me exactly what they do, let alone how they differentiate from their competitors and you would think this was easy…but take it from me that it is not as easy to articulate as you would think.

In fact, in my case, it was down to over-thinking and my desire to be a perfectionist that held me back and you have to strike a balance between agonizing over words and phrases to impress everyone or simply getting something out there that is meaningful and compelling to your customers.

You have to do both.

Words are powerful, images are powerful and the combination of the two can be deadly…but before you start hiring your video production company, copywriters, and professional speaking coaches, make sure you take the time to really dig deep and come up with goods yourself.

You must be the creator of your own value proposition statement

The essence of your business is you — the passion behind it is unique to you and therefore the best person to articulate any message relating to your company is you, so sit down and dig deep — try as best as you can to answer the 3 key points I have outlined above and then work hard to make them as perfect as you can.

Do your job!

Don’t worry about the experts…you will have plenty of time and money to hire them as you grow your profits, but at the beginning, or even if you are established and are unhappy with the way things are going, tap into your reserves and stretch your mind — I can tell you from personal experience that you don’t always get the answers you want, but you will kick-start a process that will allow your creative juices to flow.

Take a look at this statement from Uber:

“Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And payment is completely cashless.”

Without saying so, Uber manages to highlight the frustration of dealing with a regular cab service and then compels you to at the very least, give them a try and while it is not a complete value proposition in some senses, it is a good example of how simplicity works.

The above is an excerpt from an excellent article, “7 of the Best Value Propositions We’ve Ever Seen,”  written by Dan Shewan and posted on the Wordstream blog.

Let’s now go through the 3 steps in greater detail and I am going to start in reverse order from the list above, as you need to build this from the ground up.

Related: 

“Sales Training: The Ultimate Guide To Help You Become A Key Influencer.”

Value proposition statement: Know what you do

Value-Proposition-Statement-Know-What-You-Do

 

If you ask an owner of a company what they do, you will probably get a stock answer such as “we design software for the construction industry,” or “we bake artisan cakes,” or “we are the market leaders for providing xxx services,” etc.

There’s nothing wrong with any of those answers and they form the basis of the value proposition statement, but it’s the next part that’s tricky — explaining how and why you are different from the competition.

In reality, it is extremely difficult to “re-invent the wheel,” so to speak and unless you have, you will not be able to claim any unique status.

In fact, that is a good thing — when I co-founded a software company in the telecom sector, we had a truly unique offering and it was the only unique business I have ever owned or been part of. But that created another problem…there was no established market for the product and it was an uphill struggle to convince customers of the value of this unique software.

The only real unique thing you have is you and your thinking, so that is what you somehow need to bring into your marketing strategy and your value proposition statement.

Explain what you do, solve problems, and create the desire

Just explaining what you do is probably not going to excite the market or your customers unless you are handing out free money, so you have to dig a little deeper and make it more compelling.

So here you can look at the problems that you solve for your customer — make a list and then you will have a basis from which to add some value to your core offering.

In the Uber example, the problems are solved by simple, but absolute statements — there are inherent problems with calling cab companies, which is why there is a reference to the word “tap” and you have another two problems with drivers and payments that are addressed with simple statements to at least, give you the desire to use them.

How is your value proposition statement different?

In the Uber example, there is no “differentiator” and probably because there are few competitors and the offering is relatively new in terms of innovation…but that is going to change for sure.

The chances are that your offering doesn’t have the same cash-backing as Uber and will be in a more established market, so you need to explain what gives you the edge over the competition.

When I started my global telecom staffing agency, there was fierce competition and we were just coming out of a recession in the UK and starting with little capital and no premises (I operated out of my apartment), I had to get creative.

I decided to flip the market on its head and rather than simply calling customers to see if they had any staffing needs, I “brought the market to them.” By going out and locating the most in-demand specialists and then making customers aware of them, I told companies exactly what I did, solved their problems of locating hard-to-find skill sets, and explained how I was different.

You have to get creative…but you must remain functional.

Related:

“How I started my first business from a living room in London.”

Explain your processes and offer proof

Customer-Value-Proposition-Know-Articulate-Your-Processes

 

Now that you’ve nailed the first part, it’s time to give your customers an insight into how you do what you do, with some proof points if you can offer them.

If you are a start-up, you may think it is difficult to land your first customer without proof…this is a natural reaction, but if that were the case, no business would be able to start and proof comes down to these points relating to an established business in the first point and a start-up for the others:

  • Real examples of success.
  • Your track record in the industry from your previous job.
  • Your vision for your start-up if it is outside your industry and expertise.

Don’t be put off by the last 2 points as I had to sell my industry experience when it came down to starting my first staffing agency and many people start businesses outside of their core expertise because they believe they can make a difference.

Processes and quality control

Now you have to briefly explain the “how” part of what you do and in relation to the overall value proposition, which doesn’t give you the number of words that you would think you need, so I will go back to my own staffing agency to explain how I did it.

I used a phrase in my marketing campaign that was aimed at telecom vendors and service providers:

“You have the know-how, we have the know “who”…and where.”

That statement told the customers that we knew where the people they needed were, as you would expect from a company in my industry, but we had to go a little deeper.

It was all well and good telling customers that I “brought the market to them,” but they needed reassurance concerning the quality of the people I represented, so I created a process behind it which I termed our “technical firewall.”

The word “firewall’ was easily understood by the industry, but it ensured that each person had to go through a process to establish and qualify their technical expertise, which now gave the feel of an established quality control process.

It doesn’t matter what business you operate…you can do exactly the same and the process and quality control aspects of your value proposition statement is the bridge between what you do, proving it, and the real customer benefit which should always be a commercial one.

Know your precise commercial benefit

Customer-Value-Proposition-Know-Your Commercial-Benefit

 

Now we come to the heart of the matter — what are you really selling?

Let’s take a producer of gluten-free cakes as an example and it is easy to assume that your product is the cake and of course you would be right.

You can talk all day long about how tasty the cake is and produce a ton of social media content to show each and every aspect of the processes you have to make the cake and your premises etc. You can go deep into the history of the company and why you started and you can have a ton of reviews…but until someone has tried your cake, they will not know for themselves, so you have to give them as many reasons to take that first step.

One of the keys here is in the process of making the cake — there are many concerns with cross-contamination, such as making regular cakes in the same environment as gluten-free cakes which could have disastrous consequences for gluten intolerant customers.

By articulating the fact that you have a totally gluten-free operation in your production facilities (which is hopefully the case), you have one of the main products that you are really selling — customer reassurance.

And I would bet that the product of “reassurance,” would be more important than the cost, and in this example, I would say that reassurance is a commercial benefit, simply because of its importance.

Don’t forget the money

In my staffing company, I made the lead focus totally commercial.

While everyone else was talking about the number of people they had on their databases, the number of vacancies they filled, and the time it took to fill them, I brushed over these facts as “given” because that is exactly what companies in our sector were supposed to do…it was our job.

I focussed on the monetary value of the people that I provided and then brought in the other qualities of time and efficiency.

Each resume/cv to me had a monetary value and not just the amount of salary compensation the person required, but also the monetary value they brought to the company they had worked for, which in many cases was substantial.

So if you are a recruitment/staffing agency, instead of telling customers how successful you are in performing the job you are paid to perform, talk about the other side of the coin…the commercial side and you could come up with a statement to reflect it, such as:

“In the last twelve months people and teams provided by xxx have delivered xxx in direct revenues, xxx in cost savings and their recommendations have seen an xxx number of efficiency improvements.”

You can then add:

“We only work with the very best people in the xxx industry and each person has to go through a rigorous 12-point qualification and verification process to make it on to our database, which is deliberately kept exclusive.”

And finally:

“Located in xxx, we have been consistently delivering the top 20% of xxx people to the xxx industry since xxx.”

And there you have it…one idea of a value proposition statement and if you are a start-up, you simply focus on the vision you have, the process that you use, the market you are serving, and the expertise you have to serve it.

If you are entering a market that is outside of your expertise, then focus on the vision, process, market, and your entrepreneurial and business passions and desires.

Whatever your business, I urge you to spend a lot of time in creating your customer value proposition statement and remember that you will not only make an impact on your customer but your own internal staff and those that you will need to attract to grow your company.

It’s a lot easier when everyone is on the same page!

Neil Franklin

Neil Franklin-Entrepreneur

Last modified: January 30, 2021

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