FastTrac, Kauffman Foundation
A value proposition defines the benefits your company's products and services offer to the customer. This short statement, based on your Business Concept Statement, should express the essence of your business in a way that compels the customer to buy.
It's important to expend the necessary time and effort to craft a compelling value proposition since it will form the basis for all your sales, marketing, and product development efforts. The value proposition is also part of your Business Plan.
A value proposition is a valuable tool to guide your marketing efforts. Here are some benefits that you will receive by having a clear, compelling value proposition:
- Create a strong differentiation between you and your competitors.
- Increase not only the quantity but also the quality of prospective leads.
- Gain market share in your targeted segments.
- Improve your operation efficiency.
- Increase your revenue.
- Ensure that everyone in your company communicates the same message.
Follow these guidelines to create a value proposition that will compel customers to buy your product or service:
- Use your Business Concept Statement as a starting point for expressing your value proposition.
- Address the needs of your target market. What problems do your target customers need to solve? What's not working for them? Where do they want to go?
- Emphasize benefits, not features. Don't explain what the technology does; explain what the buyer will get out of using the technology. Some examples of benefits are greater revenue opportunity, a competitive advantage, reduced costs and expenses, greater convenience, greater Return on Investment (ROI), and better results.
- Use tangible examples. Be as precise and specific as possible. Include numbers, percentages, and time frames.
- Be clear and concise. Condense your message into two sentences.
- Differentiate yourself from the competition. What do you have that no one else has? And-most importantly-how is this an advantage to your customers?
Research and test your value proposition. Ensure that your message strikes the right note with the right people.
© 2007 Ewing Marion Kauffman Foundation. All rights reserved.