Communicating Your Value Proposition
The Value Proposition Canvas is useful for identifying the match between your products and services and the wants and needs of your targeted customer segment. The “marketing physics” framework helps refine and communicate your value proposition. According to research undertaken by Doug Hall—a new product expert—a well-articulated value proposition can double your chance for success.
These ideas aren’t revolutionary. In fact, you’ll probably find them familiar. What’s different—and important—is that these ideas are actionable. As we explore the key ideas underpinning marketing physics, you’ll have the opportunity to apply them to your products and business.
Value is Contextual
Beauty is in the eye of the beholder. Perceived value, too, is contextual. In other words, value is:
If we are to persuade someone of the value of our product, we must answer several questions:
- Valuable for whom?
- Relative to which alternatives?
- When is our product particularly valuable?
Although we might value gold over water in most situations, water is immensely more valuable than gold to a thirsty person stranded in the desert.
Communication, transportation, and logistics technologies are double-edged. They enable us to reach across time and space to connect with prospective customers. On the other hand, we are simultaneously exposed to global competition. Consequently, it is imperative for us to develop a deep understanding by whom, where, and when our product offers the greatest value. Only then can we communicate convincingly.
Effective interview techniques and tools such as empathy maps can help us move beyond intuition. The faster we can learn the facts about the circumstances in which our products are highly valued, the faster we can craft productive marketing messages.
The Drivers of a Strong Value Proposition
Doug’s research indicates that there are three drivers of a powerful value proposition:
We all know that we should focus on benefits rather than features. However, given the overwhelming volume of marketing messages to which our audience is subjected these days, it is critical that we make overt statements of benefit.
- What’s in it for the customer?
- Why should they care about your product?
Customers can’t—and won’t—read your mind. Tell them in unambiguous terms how your product benefits them. A benefit can be utilitarian or experiential. Pick one. The probability of success actually declines when there are three or more claimed benefits.
Real Reason to Believe
Providing a real reason to believe means explaining how exactly you are going to make good on the promised benefit of your product. According to Hall, there are five strategies for communicating real reason to believe:
- Kitchen Logic
- Personal Experience
Kitchen logic conveys how the benefit is delivered, using language that prospective customers can easily understand and quickly relate to. For example, consider this statement: “We have the freshest bread because we bake it right here.”
Personal experience is about providing your customers with the opportunity to see, feel, and experience your product benefit. Sampling, demonstrations, and sensory feedback are all ways to provide a real reason to believe via personal experience. “Watch us make our bread; smell the aroma; and taste a sample right out of the oven.”
Pedigree is about providing confidence by detailing the heritage behind your product or service. In Hall’s framework, there are three types of pedigree:
- Development pedigree involves providing credibility as the result of the design, creation, formulation, or production process behind a product. For example, “Our bread is made from wheat grown in Montana to our precise specifications regarding protein and water content.”
- Alternatively, the following statement is an example of marketing pedigree: “Our bread is a three-time winner of the Great American Bake-off.”
- Trademark pedigree derives from an established and trusted brand name. Note that while a reputable brand can be a strong source of pedigree, it’s not the only source.
Testimonials can be from customers, experts, or independent third parties and can substitute for personal experience.
If it is big, bold, and credible, a guarantee can provide a powerful reason to believe.
In order to get customers to change their behavior – that is, get them to buy your product – you have to offer something that is perceptibly different from the status quo. Customer inertia is almost always the most formidable competitor.
Price matters. However, the price is rarely a source of a sustainable advantage unless you are truly the low-cost provider. Benefits should focus on a deep understanding of customers in order to craft differentiating benefit and reason to believe.
- A clear and compelling value proposition can double your chance of success.
- Value is personal, relative, and time-sensitive.
- Benefits can be functional or experiential.
- Focus on one or two benefits and make them overt.
- Substantiate your claimed benefit with a real reason to believe.
- To overcome customer inertia, you must offer a dramatic difference relative to alternatives.
- Be wary of relying on price as a source of differentiation. For most companies, that’s not a sustainable strategy.