Discovering Your Company's Value Proposition

A strong value proposition helps companies crystalize their business goals, develop marketing concepts, and target customers with the right messaging.

How valuable is your company’s offering?

The value of a product or service extends beyond its immediately calculable annual revenue. The real worth of a product or service lies in the value your customers place on it.

How does your product or service solve your target market’s problems? What benefits does it deliver? And why should customers choose your offering over the products and services of your competitors?

Answers to these questions will help define the value proposition of your product or service.

While many companies may know the answers to these questions and may use them in decision making, a surprising number of companies do not have defined value propositions that guide their marketing, sales, and customer service.

The Value of a Value Proposition

Because it is so often used incorrectly or ineffectively, the value proposition is undervalued and, therefore, overlooked.

However, crystallizing and clearly articulating the value proposition for your product or service will help center employees on the offering’s overarching purpose and mission, drive leadership decisions, keep existing customers returning to purchase your company’s products and services, and bring new customers into the fold.

For your marketing, a carefully defined value proposition will help guide messaging and campaign creative direction. Further, it will help ensure that tactical mixes and marketing content focus on reaching target audiences in the right places and in the right ways.

Marketing that performs is always marketing that takes the value proposition into account.

What is a Value Proposition?

A value proposition is not a mission or vision statement. A value proposition isn’t a slogan or tagline, either. And while many people confuse a value proposition and a positioning statement, a positioning statement is a subset of a value proposition.

Let’s explain.

A value proposition is an internal document or asset—not a designed, wordsmithed piece of marketing. In form, an effective value proposition is a block of text with a strong headline that includes an illustration or graphic for support.

The headline of a value proposition should grab attention and should focus on the end benefit of the product or service—and always from the target audience’s point of view (not the company’s). The block of text or body text of a value proposition should explain the product or service, should outline for whom it is useful and why, and should list its the top three or four key features or benefits. The visual element—whether a graphic or an illustration or even a photo—reinforces and explains the points made in the text.

A good value proposition has the following characteristics:

• States how the product or service is better than competing offerings
• Highlights the offering’s key features or benefits
• Avoids business jargon and complicated language and phrasing (keep it simple!)
• Includes a relevant and illustrative graphic
• Is easily understood and quickly read (if it isn’t scannable, it isn’t a good value proposition)

Companies use value propositions in several ways and across several functions. Therefore, value propositions must be clear and easily understood by anyone who might read them.

Foundations for Quality Value Propositions

Before a company creates a value proposition, it must conduct research to ensure it has a clear understanding of its target audiences and competition for the offering. The best research will consider primary and secondary sources and primary research sources will involve surveys and one-on-one interviews.

Why is research important? Can’t a company just go with its instinct?

Unfortunately, instinct will lead you astray. Over its decades of experience with clients across several industries and company sizes, the FrogDog team can assure you that no client has come away from a research and analysis effort without a new understanding of its market landscape—and a few game-changing surprises, too. The knowledge that research and analysis provides is critical to building efficient and effective products, services, strategies—and marketing campaigns.

And efficient and effective marketing campaigns include strong value propositions as foundational elements. Companies use the information gleaned from their research to create an offering’s value proposition.

How to Use Value Propositions Effectively

Companies use research-based value propositions to create positioning statements, define business and marketing goals for the product and service, create key marketing messages, craft marketing campaigns, guide customer relations, and more.

As markets change, companies should assess the value propositions for each product and service on an annual basis—or each eighteen months, at the latest. When they do, they should use these revised statements to adjust their business and marketing plans and objectives accordingly.

Getting Help with Value Propositions

Do you have a strong value proposition to accompany your marketing strategy and plan for each product or service?

If you answered “no,” you’re not alone. FrogDog can help you. Contact us.

Image credit: Andrea Piacquadio