Marketing 101: Value Propositions In Your Marketing
It is a popular position to think that human beings make purchase decisions based on emotional factors and not necessarily logical conclusions. The fact however is that any message aimed at getting people to make a purchase of goods or services must be presented in a way that strikes the prospects in a way that compels them to see the benefit to them.
One of the best ways of doing that is by crafting a good value proposition. A value proposition is a statement that presents in a graphic manner, the benefits, costs and value that a company can provide for its customers. The value proposition therefore encapsulates the value that the customer stands to gain as a result of consuming the goods, services or associating with the enterprise in question. It stands to reason therefore, that every enterprise must have a lucid value proposition to provide a measure of conviction in its customers.
Value propositions are an important factor in marketing and to this end, it is very critical for marketers to ask the question; why should a prospect make a purchase from the company instead of another? This question is the baseline for the crafting of a great value proposition. Let us take a closer look at how a value proposition can be created.
A proprietary model, Value Proposition Builder TM created for crafting a value proposition, provides for six stages to a value proposition:
i. Market: This refers to your target audience for whom you are crafting the value proposition. It is extremely important that you know the market you are serving and for which you want to create the value proposition.
ii. Value Experience: This step is a follow-up from the previous stage. You have to determine what the target audience values. This is not conjecture but has to be a product of feedback from the target audience.
iii. Offering: The product or service being offered must be clearly described.
iv. Benefits: The benefits of the offering must then be clearly stated.
v. Alternatives and Differentiation: What sets the offering apart from others in the market? This has to be benchmarked against the available substitutes in the market.
vi. Proof: The evidence of ability to actually accomplish the said value must be provided.
Obviously, in order to effectively market a product or service in the face of intense competition, it is important that a strong value proposition be used to convince the customers about its position over and above the other available ones in the market. When a company creates a strong value proposition for a product or service, it must do so with the various segments of its audience or stakeholders in mind. These include:
i. Employees: These are the most important constituent as it is impossible to have products or services without them. Recruitment and retention are two important issues in employee management and a strong value proposition will accomplish it.
ii. Customers: It explains the reason for a customer to choose a particular supplier over another.
iii. Partners: This creates opportunities for joint ventures.
iv. Suppliers: This convinces a supplier to elect to work with a particular company over others.