Five Steps to Finding Your Value Proposition
There’s nothing worse than feeling like you have to drive down your prices to remain competitive. After all, you’ve thought long and hard about how much your product is worth and its value to a customer. So, do you really need to start finding your value proposition?
Often businesses think that they are selling on value but if you’re having to offer discounts or negotiate your prices, you’re actually selling on price. This is a common problem facing many businesses, especially in the current climate.
Why do people fail to sell on value?
Value selling concentrates on taking a consultative approach to the sales process to allow the customer to make a decision based on the potential value of the service you provide. The goal here is to put the customer’s needs first enabling them to choose the product if it suits their needs.
However, a value proposition plays a much larger role. It applies to the business as a whole and provides a promise to the customer of how value will be achieved and acknowledged throughout their whole experience.
When businesses fail to offer a value proposition it can result in them feeling forced to water down their offers and drop their prices to make sales. There are three main reasons why this happens:
- You and your team lack confidence in your business and product
- You have the wrong value proposition for the market
- You are selling features not fixes
When you look at these three issues in a broader context, you can see that it comes down to one simple problem. You are trying to sell to the wrong people. You can have the most amazing value selling offer, but if you are attracting the wrong customer it is unlikely that you will reach your margin and profit goals.
It takes a change of mindset and strategy to attract high-value customers who chose to pay more for a service that sets itself apart. So how do you find your value proposition and attract the right customers?
Step One – Make a List
The first step of finding your value proposition is to make a list of everything your product offers a potential customer but don’t be generic. For example, if you’ve written that your product is “state of the art” this actually offers no tangible benefits to your customers. Try and think deeply about more specific customer benefits.
In order to really identify true benefits, it can be helpful to look back at your existing customers. What did they buy from you and why? By thinking about the problems you solved for your customers you can easily identify even the smallest benefit.
Step Two – Identify Major Benefits
You’ve already taken the time to write down every potential benefit your product can offer your customers. Now it’s time to take that long list and assess which are the most important to your customers. These are your major benefits.
Major benefits are features or results of your product that have a big impact on your customers. Generally, these benefits will come under one of the following two categories – they save your customer time, or they save them money.
Step Three – Identify Customer Problems
Once you have identified how your product can benefit your customer then you can start thinking about how to apply these to your customer’s problems. Now you have to put yourself in the shoes of your potential customers.
Think about what problems exist in your customers’ world that means they would need your product. Essentially it’s now time to look at your list from the customers perspective. What issues are they facing that your product can help solve?
Step Four – Road Test Your Value Proposition
Now you have a base for your value proposition so it’s time to road test it. The best way to do this is to field test it in your LinkedIn posts. Talk about the problems your customers are facing, ask questions and test the messaging around your value proposition.
By testing out your ideas like this, it will help you see what works for which customers. The days of a one size fits all approach is over. Instead, you may find it more effective to build value propositions for each of the different industries or sectors that you are selling it.
Step Five – Make It Work For You
The value proposition has been tested and amended so now it’s time to implement it across your business. Make sure that it is written down clearly and your whole team understands how it works. Plus, remember that your value proposition should be informing many different aspects of your business, from marketing to sales scripts.
Value selling will not work without a rock-solid value proposition but once your proposition is understood by your team and implemented throughout the business, potential customers will see that you have a superior offering and want to pay for your service.