Three steps to developing a compelling value proposition
The customer value proposition is a term that is becoming increasingly popular in business strategy. It is a marketing statement and tool that should help guide your marketing efforts. It also convinces a potential customer to purchase your product or service, so make sure you’re sending the right message. The best value propositions usually hit an emotional trigger for the customer.
- Know your customer – Take time to develop an accurate description of your customer. The value proposition you offer must be valuable to the customer. You should know their common interests, spending habits, age ranges, etc. Once you have the research, apply your findings to identify emotional connections.
- Determine the value proposition(s) – There are eight common value propositions. To increase the impact of your product, you should address at least a few of these categories. Remember that the customer sets the target and it is your job to make the connection to their values.
- Newness – Do you have a friend who pays full price for a new phone because they absolutely must have the latest technology? Is it that much faster, take significantly better pictures, or improve productivity? In all reality, probably not, but it is the newest toy on the block.
- Performance – As an Engineer, this is one of my values. If I am buying a PC, I want to know storage capability, processor speed, memory, how it handles many open applications, and how fast will it render my CAD images.
- Customization – The consumer has more options than ever before. For example, let’s look at automotive manufactures. Decades ago, Henry Ford said, “They could have any color they want, as long as it’s black.” Now we can choose colors, engine combinations, transmission options, satellite radio, computer entertainment centers, rim and tire packages, roof racks…the list goes on.
- “Getting the Job Done” – Do you want to go to the moon? You must buy a product that can get the job done. This is a common value for a higher paying customer or when safety and profits are at risk if the product fails.
- Design – While this may be subjective, many customers buy a product simply based on beauty.
- Brand/Status – Do you have a friend who has more money invested in their designer shoe collection than their 401k account? Be prepared to spend heavily on marketing and brand development for this core value proposition.
- Price – This value works if you are offering a no-frills product where the customer is on limited budgets. Wal-Mart is all about this value proposition.
- Convenience/Usability – Think of Apple. The iPod was not the first MP3 player on the market; however, the iPod and iTunes seamlessly integrated an MP3 player with the customer’s personal music library and a digital music store.
- Make an emotional connection – Though I prefer to work on a PC, I admit that Apple’s marketing and value propositions are top-notch. Apple is not a hardware or software company; they simply use hardware and software to connect with their customer. Take a look at this marketing video: https://www.youtube.com/watch?v=VpZmIiIXuZ0. The value proposition hits home around 1:15. Doesn’t that want to make you release you inner creative genius? Don’t you feel like Apple will help you do that? Now watch this marketing piece from Apple and see if it hits an emotional spot for you: https://www.youtube.com/watch?v=PGtP6ZQ6Lt8. Apple doesn’t market its products by specifications, performance ratings, or software capabilities. Their compelling value proposition is to offer the user a unique and convenient way to accomplish their goals through an elegantly designed interface.
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Christopher D Campbell
CDC Innovations LLC