Look at any well-written Business Plan and you’ll see a section called “Value Proposition” – and this is normally one of the key questions investors have from entrepreneurs and how this value proposition will solve a problem for your intended customer. How can an entrepreneur create a compelling value proposition for a business? To answer this question, we researched what some of the local and global founders consider as their best tips.
Here are 11 tips on how to write a value proposition.
Speak With Your Future Customers
Identify the opportunity that exists in the marketplace. When our business first started in 2006, the value proposition we identified was to “offer small startups a World-Class Management Consulting Service and Bespoke Business Plans at an affordable rate”. Before our company was founded, clients either had the option of using cheap Template-Driven Business Plan Consultants, Business Plan Software, or Do-It-Yourself Options. By identifying a value proposition that created more value for our customers, we have been able to celebrate our 15th anniversary year in business this year. For any entrepreneur looking to create a compelling value proposition, take the time to research the industry, speak with customers, and be bold enough to dream up something unique. And don’t copy others. Don’t be known as the Copy-Cat in the Industry.
Write The Value Proposition Down
The process of identifying a value proposition requires lots of revisions. Why? Because finding product (service)-market fit requires an entrepreneur to “get out of the building” and talk with customers about where they find value in a product or service. If an entrepreneur listens hard enough, customers will share what the true value proposition may be. My best advice is to write a value proposition down and revise it consistently after each customer interview. If the customer insights phrase a value proposition differently, write it down and validate the phrase over and over until you’ve found a fit.
Keep the Customer’s Problem at the Forefront of Your Mind
A value proposition for a business is a promise of something to be delivered! It is the main reason why a customer should (or should not) buy a product or service from you. As an entrepreneur, this is the most important part of starting any business, because customers don’t know what kind of value you can offer them yet. When creating a business value proposition, always keep the customer at the forefront of your mind. Identify a problem a customer may have and present how your product or service can be the solution.
Keep Your Message Simple and Consistent
When writing a compelling value proposition, this is not the time to try to cram every selling point and benefit of your product or service into the message. Think of the single most important thing you want to communicate with your consumers, and use it to hook their curiosity and want to discover more about the product or service. The message should be efficient and to the point.
Implement Credibility Markers
Selling a product or service that fails to convey its value to consumers is just as bad as creating a product or service that has no value to start. That is why you need a clear value proposition for your business! The best way to create a compelling value proposition is to keep credibility at the forefront of your mind. As a Management Consultancy that specialises in Business Plans, our clients should be able to trust us. Implement credibility markers into your value proposition that will help customers feel comfortable doing business with you.
Brand Positioning Statement
An entrepreneur needs to create a Brand Positioning Statement that describes the business they want to build or be a part of and also demonstrates the expertise they have to build it. For example – “I am a focused and determined business leader who can offer entrepreneurial stamina and wisdom to drive bottom-line results”.
How Do You Make Your Clients Heroic?
Get everything you say about your company “out of your head” by taking the time to write your answers on paper (or a whiteboard) before it eventually ends up in a master company document. To get you thinking differently about the product or service your business provides, here are two great questions. Question 1. “Why do you do it?” As famously stated by Simon Sinek “People don’t buy what you do, they buy why you do it.” Question 2. “How do you make your clients heroic?” was shared by Joe Polish (co-host of the I Love Marketing podcast). Those questions get you and your team connecting to a deeper meaning, and fulfillment as your company serves clients.
Keep it Simple
First and foremost, keep it simple, brief, and don’t get lost in what you do. Too many businesses get lost in describing what they do versus connecting with their target on their terms and with their needs. Instead focus squarely on the intersection of what you are passionate about what you are best at – and make sure you can articulate how that solves your target customer’s problems and what makes you uniquely qualified to solve them.
Back-Up Your Promises
An entrepreneur can create a compelling value proposition for a business by instilling two things into their offers. The first is something that customers can’t get anywhere else. The second is a way to give them rock-solid certainty that you can achieve said result.
Create a Product or Service That’s Easy to Use
From my experience, I find that the most compelling but simplest proposition you can make for your customers is to make a product easy to use. Very often product developers make things assuming that customers have certain skills and knowledge to use them. This often isn’t true. You can remake an already existing product but make it so user-friendly and intuitive that customers will prefer your work over your competitors.
Remove the Branding Jargon
Entrepreneurs can create a compelling value proposition by communicating the value of their product in terms that the target customer can understand. A customer wants you to solve their problem, not impress them with your branded messaging jargon. When we remove the complicated explanations, we make a clear path for our target market from search for a product or service to connecting with a product or service.