At the heart of every successful business plan is a clear, concise, and concrete value proposition. This single statement sums up the entire foundation of your business, making it clear what you do and why you do it. It states in no uncertain terms exactly what value your product or service has, and it tells your potential customers why they should choose to do business with you over another company with a similar product. It is, in short, a justification of your business’s entire existence.
In a perfect world, your value proposition should inform everything about your business from your marketing strategy
to your budgeting decisions. It should serve as focal reference point for both major and minor business decisions, guiding you as you best serve your customers and grow your business. A strong and functional value proposition can help you keep your business focused and allow you to better produce value for your customers.
Sadly, too many businesses fail to develop a functional value proposition strategy, if they manage to develop one at all. They may string together some general statements about their industry or products, which they then put up on their website or in their business plan, and then forget about them. Their business then struggles to attract and retain the customer base they should.
By defining your value proposition in clear, concise, and concrete terms, you can craft targeted marketing messages about your business, efficiently allocate your resources, and consciously leverage your business’s advantages so that you can deliver high value solutions to your customers’ most pressing needs
The first step in defining your value proposition is to identify what unique value your company offers. Whether you design and create a product, provide a unique service, or offer convenient access to beneficial information, your business delivers something of value to your customers. Your job in building a value proposition is to recognize precisely what you offer, why you’re the best to offer it, and, more importantly, why your customers want it.
There are two ways you should approach answering that question. First, you should identify what you offer your customers, what tangible assets you provide that the customer can buy from you. Next, you must identify the unique value you offer in how you provide those assets.
Your business provides something tangible and definable that customers can buy. Those assets can be products they can hold in their hands, or services that help their businesses run or that make their lives easier
. These tangible assets are what define your business and your industry.
Keep in mind, that when it comes to your product, you are the expert. You are the best one to offer this unique product, and customers come to you because your product responds to a need of theirs. You should be able to identify why your product is so important and exactly what value your clients can find in it. Think about how you would define that value. How you would explain your product to someone who had never heard of your company before?
Second, you should identify the intangible values you offer. This is where you focus on the ways in which you bring that product to your customers. If you provide a product in an incredibly efficient or cost-effective manner or with exceptional customer service
, those are your intangible assets.
Intangible assets can be a great way to distinguish yourself in a crowded field. If you are at the cutting edge of innovation, bring together multiple parties in the industry, or even if you just work exclusively with a niche group of customers and understand their needs better than anyone else, you are providing a unique value that makes your business stand out and succeed.
Consider carefully how you conduct your business
and how that process makes you unique. How does the way you provide your products distinguish you from other businesses in the same field?