Creating a Value Proposition

One of the questions I am frequently asked is, "How do I communicate my real value to my customers?"  It doesn't sound that complicated, but understanding what your customers are truly paying for and learning how to frame a summary statement powerfully and succinctly is actually quite a mind-bender.

So, here is a brief process outline that will assist you in analyzing your own value proposition from the comfort of your desk.

1.  What is a 'value proposition?'  A value proposition is a clear and concise communication about the core benefits your business provides to customers based on their goals (not yours). The point of having one is to provide a compelling reason for people to want to do business with you.

2.  Here is a simple exercise that will assemble the key components for a value proposition by prompting you to answer questions about your business.

• What is your core business offering?
• Who do you serve?
• What differentiates you from other competitors?
• What are the specific solutions you provide that will meet your customer's objectives?
• What factual results have you achieved in meeting your customer's needs and wants?

3.  Next, you need to compile your completed responses into a coherent statement.  Here's an example of how to structure a value proposition:

"At XYZ IT, we focus on providing cutting-edge technology solutions to health care facilities and hospitals throughout the Midwest.  The difference we make for our clients is reducing technology costs, increasing the life cycle of technology equipment, and improving the experience of employees and patients at the facilities we serve.  Partnering with us for IT solutions allows our clients to increase profits without sacrificing convenience, affordability, accessibility of information or quality of care. Over the past 10 years we've slashed IT costs by 10% or more in over 100 health care facilities while earning an average satisfaction rating of 9.4 on a scale of 1-10 from our clients."

4.  Make sure that your responses to the questions really delve into the heart of what you offer your customers.  Remember that while you have your own goals, ideals and reasons for being in business, those will seldom align with why your customers will make a purchase from you.  If you don't know what your customers are really after just ask them and find out!  Get specific about:

• What are you really selling?  A perfume is probably not sold based on the combination of floral scents assembled in the formula or the shape of the bottle.  The perfume is truly selling sensuality or confidence.  
• What are the benefits to the buyer?  Let's shift to the example of scheduling software... the benefit of buying and using the software isn't the pretty calendar layout - the tangible benefits are really organization, productivity and control over time.
• Why make the decision to buy (value)?  This is where the rubber meets the road.  Address directly the problem that is driving your customers to you and provide proof that your solution is the best option available.

One of the keys to business success and salesmanship is being able to articulate the value of a product or service to potential buyers in a clear and compelling way.  I've seen many businesses fail that built a great product or delivered a very valuable service, but they couldn't convince customers to invest their hard-earned dollars in a sale.  Take a moment to examine your pitch and make sure that the value proposition you're putting out into the marketplace is worthy of attention.