In my previous article, How to Craft Your Winning Value Proposition, we discussed the importance of making your value proposition stand out. In this article, I’m going to tell you exactly how to do that.
NEED: Who is Your Target Audience & What Are Their Pain Points?
A need should relate to an important and specific client or market opportunity. The market size and end customers should always be clearly stated, and you should ensure that the market is large enough to merit the necessary investment and development time. One of the most important steps is to uncover pain-points. If done effectively, it is the very first step in building a deeper, mutually-beneficial relationship with your customer. You should guide your Needs Discovery process by asking open-ended questions. We can then use the customers’ answers to these questions to build something called a Needs Statement.
A Needs Statement is simple. It simply involves breaking a problem down into smaller, more manageable segments. You don’t even need to worry about suggesting solutions just yet – that is the next step.
Your Needs Statement should consist of three distinct parts.
Let’s go back to our example of the Heinz upside-down ketchup bottle. People used to reach for it with a little dread. Would they have to poke a knife up the bottle’s neck to get the ketchup going? If the bottle was an old-fashioned squeezable, would it emit that conversation-stopping sound that made the kids erupt into giggles? as their dinner about to be covered by a sneeze of watery juice?
For a more in-depth guide on how Needs Discovery works, check out my previous post about The Needs Discovery Process.
APPROACH: What Exactly Do You Do & What is Compelling About It?
To develop a strong value proposition, you must be able to clearly and confidently define what your company or product does and how you do it differently than the rest of the businesses in your niche. Think about the products or services that you’ve bought lately. They’ve all been specially designed to the solve problems we have, and even problems we didn’t even know we had. Everything we buy serves a purpose. Take a step back and look at your products or services in terms of solutions. What types of problems do they have the potential to solve?
Once you have a good understanding of how your products or services can remedy your target audience’s needs and pain points, you can begin to present this information in a way that solves their problems. Position your product as a helpful resource that your customers can’t do without.
BENEFITS: How Will Your Product Or Service Provide Value?
Each approach to a client’s need results in unique client benefits. For example, low cost, high performance, or high response rate. For your product to be a success, its benefits must be quantitative and substantially better than the alternative options. Just being different isn’t enough. Your customers aren’t as invested in your product as you are. You need to give them a real reason to choose you. Once you have a good understanding of how your products or services can remedy your target audience’s pain points, you will gain a deeper understanding of how best to present your product to them. For the Heinz upside-down ketchup bottle, there were multiple benefits that weren’t offered by competitor products.
The bottle doesn’t leak – thanks to the patented valve.
It won’t spew watery ‘ketchup spit’ – which Heinz calls “serum” – thanks to an ingenious grooved trap that runs around the cap. In fact, it collects this serum and remixes it into dispensed ketchup as it comes out.
It also pours better. In old-fashioned squeeze bottles, the stream of ketchup “drooped as it poured.” That’s because people generally poured it at about a 45-degree angle, slowing the flow. With the upside-down bottles, it is instinctive to hold the bottle vertically before squeezing., leading to a smoother flow.
COMPETITION: What Are the Alternative Products Your Customers Could Buy?
How does your product offer more benefits than your competitors products? It’s likely there are hundreds of alternative products your customer could buy. In fact, they’re probably being bombarded with new options every day.
We must be able to tell our client or partner why our solution represents the best value, and hence why they should buy it. To do this, we must first understand our competition and our clients’ alternatives.
Ketchup was founded in the 1600s with East Asian spice exporters who sold British and Dutch traders something like Worcestershire sauce. They called it “ketsiap.” A century later, Nova Scotia farmers added surplus tomatoes and sugar to the mix.
However, early investigations into ketchup showed that it contained potentially harmful amounts of preservatives. Heinz was convinced that American consumers didn’t want chemicals in their ketchup, and they decided to develop an alternative recipe. This preservative-free recipe soon dominated the market. By 1905, over 5 million bottles of ketchup had been sold.
The rest is history.
Robert Pearlstein has 25 years experience working with Silicon Valley companies to sell advanced technology to global companies. He currently works as Vice President for Global Business Development as part of SRI (Stanford Research Institute) one of the largest independent research and development in the United States.