How To Create an Incredibly Effective Value Proposition

There are so many companies who have value propositions that fail to articulate the value of their differentiation, and this is a revenue killer. It’s important to realize that your value proposition isn’t written for you. It’s written for the people you want to do business with. Therefore, it’s crucial that it speaks to them and addresses what THEY value. The most common problem with weak value propositions is that they focus on what the seller cares about, instead of what the buyer does. In the tech industry, this weakness manifests itself in what I call “bits and bytes” value propositions. These propositions emphasize features and functionality, instead of benefits and value.

Never forget…people buy two things: benefits and value. Benefits are the advantages the product offers. Value is how those benefits support the buyer’s goals. Trust me, no one cares that your product is “built on a cloud native architecture”. That won’t drive more customer interest. Your customers need to know why that cloud architecture matters, and how that benefits them. For example, cloud-native architecture could mean a more secure, scalable product. Or a product that takes less effort to maintain.

The best value propositions don’t stop at benefits, they also address value. Connect the benefit your product offers directly to the impact it makes on the buyer and their company. To return to the prior example, customers gain value from a cloud-native architecture because they don’t need to worry about increasing their capacity when they grow, ongoing maintenance work, or having to apply security patches. They save money and time. Ultimately, they reach return on their investment faster. If you can make that value-packed case to a buyer, you have a better chance of closing a sale.

The Key to a Killer Value Proposition: Be Specific

At a minimum, a great value proposition covers three things:

• • Who benefits from your products?
    
  • How you help customers overcome challenges and meet their goals
    
  • Why your product or approach is different and better
    

Let’s examine a great value proposition and dissect why it’s great…
“We empower K-12 teachers to help students become active learners. Our easy-to-use, video-based learning tools boost student engagement by five times. We’re the only video solution that adapts to a student’s specific learning challenges.”

What makes this value proposition great? It’s because we know:

• • Who were targeting: K-12 teachers
    
  • What benefits they can expect: Their students become active learners.
    
  • How they can quantify impact: student engagement increases five times!
    
  • Why this company: you don’t have to guess at the competitive differentiators. The company tells us why it’s better than the competition by describing it’s the only video solution that adapts to a student’s specific learning challenges.