How to create your unique value proposition
Thursday, January 21, 2010 at 8:16AM Do you remember life before FedEx? If you wanted to get a document or small package from Point "A" to Point "B" you had a few choices. You could engage a shipping company such as UPS, or you could do what most did, and engage the Post Office. Sending a letter by the Post Office cost less than a dollar. Along comes this new company who offers to transport your parcel for $15! But the catch is that they will guarantee that the parcel arrives at it's Point "B" by the next day, regardless of where the Point "A" may be.
Their promise to the customer, articulated in their catch-phrase "when it absolutely positively has to be there by 10am the next day", is the best example I know of a strong value proposition.
Your value proposition is your explicit promise to the market. It should be clear enough so that your customer knows what to expect. A good one will differentiate you in a crowded market space. It is the reason to buy from you rather than from someone else.
What is your value proposition? Can you articulate it in a short powerful phrase? Does it speak directly to your target customer?
Let's look again at the FedEx value proposition. By using the word "when", it cleverly speaks loudly to its target. When next-day receipt of your parcel is not required, you don't need the premium service. But when you do, then you are instantly a part of the FedEx target!
Your value proposition is also your customer's justification for the less favorable parts of your offering. For a FedEx customer, the price is unfavorable, but they will pay the $15 to get the favorable element: next-day delivery guaranteed. Same with Wal-Mart. Their value proposition is "lowest price, every day." The Wal-Mart customer will gladly suffer with the unfavorable (the ugly warehouse-like shopping environment, and the remote store location) in order to enjoy the favorable (the lowest price and the broad selection).
What are the unfavorable and favorable elements of your offering? Does your value proposition effectively balance them out?
Take action today! Here's how:
- Think about and define the key pain point of your target customer
- Design your offering to relieve that pain
- Create a value proposition that describes that relief and balances the favorable and unfavorable elements of your offering
- Ensure that the proposition is well understood and widely recognized in your promotional strategies
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