A value proposition is a unique value that your company promises to deliver to your customers if they buy your product/service. Often times a value proposition allows your company to market your product in a way that emphasizes how it solves current problems in the market, what benefits consumers can expect and why they should buy the product from you over other competitors. Apple Inc. finds its value proposition in being at the forefront of creating equally powerful and user-friendly technology. Although Apple has many competitors that sell similar products, they market their products by showing how they are unique, exclusive, and more advanced than similar companies. Keeping this in mind, how can you bring value to your company and its products and ensure that your customers can see this value?
Why does it matter to investors?
It is important for investors to see that your company has a value proposition because it shows them that this business has something unique to offer to its target market. Seeing a value proposition gives investors confidence that the company they are investing in has something that would appeal to their audience. An appeal to the customers from the start lends the company to have more sales and a higher profit margin from the beginning and reduces the potential losses that the company could face.
How to develop a value proposition
- Establish your target market – Identify the customers that you wish to attract and how they will benefit from your product. Find the commonalities among the people in your target market and what they are interested in. From selling subscriptions to families to technology products to working professionals, define who your ideal consumers are and how you can bring value to their lives with your products.
- Identify the problem in the market – Is there a problem in other companies’ products that your products have solved? Is your product out of date? Does your product fail to perform the way it was meant to? Interview your customers and other potential consumers to gain their opinions on the current market and how it can be improved. Send out surveys among paying customers and others in similar markets to find trends in consumer spending habits.
- Define the benefits of buying your product and what makes it valuable – Describing the value of your product is key to attracting customers and allowing them to see the benefits in what you’re offering and how it will make a difference in their lives. For example, the value in Fitbit’s products comes from showing their customers that purchasing their products will help them achieve a healthier and more active lifestyle.
- Link the value of your product to how it solves the problem in the market – By allowing customers to see a problem that they may not have even known exists and showing them how your product solves their problem, the customer is more likely to purchase your product over a competitor’s. Having a good, working laptop is one thing, but showing a customer a faster laptop with more productivity tools opens their eyes and forces them to rethink the value of the current product they have and potentially invest in a new laptop
- Distinguish your company as the sole provider of this product – Finally, show your customers that the value your product can bring to them is different and better than any other competing product and that your product provides the best value for its price. From showing sharing stories of the effectiveness of your products to firsthand customer ratings and reviews, allow your consumers to see the true value of your product and that will attract them to your brand over others.