An effective value proposition is the most essential marketing asset for driving revenue growth yet it is probably the most misunderstood within many businesses, especially for those that offer technology innovation to their customers.
A relevant question one might ask is: “If the value proposition is such an important component of a revenue growth strategy, why do so many businesses get it wrong?”
ROAR Marketing Concepts is a marketing consultancy that delivers predictable, repeatable and scalable revenue growth to technology companies and we’ve been helping our customers tackle this question over and over again. Consequently, we believe the results of our work with a number of clients have provided us with some really important value proposition concepts that we would like to share. But before we do that, let’s examine what some experts say…
Peep Laja, founder of CXL Institute, a premier training organization for data-driven marketers, drives home in a recent educational article the fundamental components of an effective value proposition. He states that “a value proposition is a promise of value to be delivered. It’s the primary reason why customers should buy from you.” He goes on to state that “a value proposition needs to be in the language of the customer. It should join the conversation that is already going on in the customer’s mind. In order to do that (and subsequently grow your sales), you need to know the language (italics are mine) your customers use to describe your offering and how they benefit from it.”
Still wondering why value proposition is so important? Sat Duggal, writing for the EMM Group, presents the idea of a quantified value proposition (QVP) which bases itself on verifiable facts that are personalized to the individual buyer. It requires a lot more work upfront to develop a QVP, but it’s also far more effective in terms of profitable revenue growth, since businesses can now sell on quantified value and improve their chances of cross- and up-selling their customers with value added services and product enhancements. In the long run, having a well-defined QVP helps the company earn a much higher marketing return-on-investment (ROI) than if they had to find and convert new leads continuously to increase revenue.
Based on ROAR’s work with a number of clients, here are three key factors to consider when developing your value proposition:
“It’s NOT about YOU, it’s about the CUSTOMER!”: your value proposition should clearly articulate how you help your target audience achieve their goals. This value statement should not be about you, your company, or your products/services. Don’t worry, you will have an opportunity to share this type of information with the customer later in the engagement process.
“We help our customers achieve/do ___________.”: simply put, this should be the structure of your value proposition statement. It needs to communicate value in the customer’s terms…NOT yours. Value is typically measured by customers by showing them how to grow their top-line revenue, reduce their operating costs, or solve a particular problem that is plaguing their business. We might add here that doing the required research ‘homework’ on the customer to understand their challenges is an activity whose necessity cannot be overstated.
What your value proposition is not: the customer value your business offers is not contained in statements about your company or its product/service ‘features.’ It is also not contained in your positioning relative to competitors. We have found through our work that It’s important to avoid focusing your communication on these factors during the early stages of customer engagement as they do not provide answers to the customer ‘pain’ questions.
Your business value proposition is the cornerstone of your marketing strategy and determines how effectively you communicate with your target audience to win customers and increase revenue. Don’t take it lightly!