Craft Your Value Proposition

Your value proposition is the core of your competitive advantage. It articulates why someone would choose you over a competitor, which is so important in this technological age where various options are available at any moment.

Strong value propositions convince clients why you are the best person for the job by identifying the problem in the market and demonstrating how you are uniquely qualified to solve this problem in a way your competitors are not. With the refined value proposition, you will book clients that are better aligned with your core offering and increase profitability.

‍Adam Alter, a professor at the NYU Stern School of Business and author of multiple books about consumer psychology, shares that a strong value proposition is the intersection of your company, your customers, and your competition. We’ll explore all three to uncover your unique value proposition.

Anyone can build something new and cool, but if it doesn’t solve a problem or improve something that isn’t working, customers will not buy it. Taking some time to reflect on your customers will help you build a successful business.

You might have multiple types of customers, such as large clients, small clients, and individuals, across various industries. Each of them may respond to a different value proposition. For this exercise, choose one target customer to focus on. You can repeat the exercise as often as you need to with other personas later.

Consider the following questions:

• Who is your target customer? Suppose you sell your product or service to other businesses. In that case, you should describe both the type/size/location of your target companies (for example, DTC and e-commerce brands based in San Francisco) and also who your specific target customer within that company might be (for example, Creative Directors, Brand Managers, etc.).
• What are your customers' wants and needs? Define your customers' wants and needs. Focus on the specific person you are selling to.
• How does your customer make decisions? For example, is there one decision maker, or does your point of contact have to run the decision past multiple others?
• Will they need a one-pager or a deck to pass along? Are decisions made after exchanging a few emails, or are there many more hoops to jump through?
• What are trends in society that might affect your customer? For example, how would a return to a fully virtual professional world affect your customer?

As you reflect on customer needs, consider where you’re starting to see overlap between your company and your customers and how that creates a unique value proposition.

Anyone can build something new and cool, but if it doesn’t solve a problem or improve something that isn’t working, customers will not buy it. Taking some time to reflect on your customers will help you build a successful business.

You might have multiple types of customers, such as large clients, small clients, and individuals, across various industries. Each of them may respond to a different value proposition. For this exercise, choose one target customer to focus on. You can repeat the exercise as often as you need to with other personas later.

Consider the following questions:

• Who is your target customer? Suppose you sell your product or service to other businesses. In that case, you should describe both the type/size/location of your target companies (for example, DTC and e-commerce brands based in San Francisco) and also who your specific target customer within that company might be (for example, Creative Directors, Brand Managers, etc.).
• What are your customers' wants and needs? Define your customers' wants and needs. Focus on the specific person you are selling to.
• How does your customer make decisions? For example, is there one decision maker, or does your point of contact have to run the decision past multiple others?
• Will they need a one-pager or a deck to pass along? Are decisions made after exchanging a few emails, or are there many more hoops to jump through?
• What are trends in society that might affect your customer? For example, how would a return to a fully virtual professional world affect your customer?

As you reflect on customer needs, consider where you’re starting to see overlap between your company and your customers and how that creates a unique value proposition.

Your clients might be looking at multiple service providers to fit their needs, and it is important that you are aware of where your competitors fall short so that you can fill in the gaps.

This is a reminder that not every other person in your industry is a competitor, and oftentimes, they can be great collaborators on projects. Not every service provider is an antagonist to your business, but you need to learn how to stand out. What other providers and companies are competing with you in your target market?

Consider not only direct competitors but the full set of alternative ways your target customers solve the same problems you solve. Your customers’ alternatives might be software, hiring someone in-house, or even doing nothing at all.

Think through the following questions:

• Who are your competitors?
• What does the competition offer?
• What do you offer that your competitors don’t?
• What advantages do you have in your brand, tools, experiences, or something else?
• What are the goals or plans of the most direct competitors? Are they moving closer toward your same product/service offering or further away?
• Do you anticipate more competitors will emerge?

There are a number of ways you can craft your value proposition statement, but all must answer:

1. Who is your customer?
2. What does your customer need or want?
3. How does your product or service meet that need or want?
4. Why are you better than the competition?

We can look at a few examples of formulating your value proposition using a simple sentence structure that makes your answers concise, elegant, and targeted.

Here’s an example from Geoff Moore’s book, Crossing the Chasm, where he suggests the following format:

For [target customer] who [needs or wants X], our [product/service] is [category of industry] that [benefits]

Example 1: For eco-conscious fashionistas who want to look good without harming the planet, our clothing is the latest fashion that is made from sustainably sourced and recycled materials.

Example 2: For high-growth NYC-based tech startups who want to grow without paid marketing, our SEO content development services are the digital content that will quickly drive organic growth.

For another example, you can follow the approach outlined by Steve Blank in his book The Four Steps to the Epiphany:

We help [X] to [Y] by [Z]”

Example 1: We help eco-conscious fashionistas to look great and lower their environmental impact by creating sustainable clothing in the latest trends.

Example 2: We help high-growth NYC-based tech startups to grow without paid marketing by developing SEO content that drives organic growth.

Both of these formulas effectively distill the who, what, and why of these two businesses without becoming overly complicated or wordy.

Using the formulas above as your template, write out five options for your value proposition statement. While ultimately, you’ll want to simplify to one statement, generating multiple ideas will help you have many to test in the market and determine which is the most effective.

As you go out into the world and speak with potential clients and others in your professional network, begin testing out your value propositions. Don’t read out all 5 to one person—unless it’s to your best friend! But when you meet a potential client or bump into an old colleague at the grocery store, try out one of your statements in conversation and see how it resonates.

Pay attention to the feedback you get. After testing one of your value proposition statements, here are some questions to ask yourself:

• Are people asking clarification questions? Are these questions out of confusion or curiosity?
• Do they seem interested and engaged?
• Do they frequently think of someone who might need your services?
• How does it feel saying those value props? Do they feel clunky or natural?
• Which feels the most compelling?

If you have close collaborators or clients that you are comfortable with, we recommend sending these to them and asking for feedback. Have them rank which value props are the most compelling and speak to their needs the most. Remember, your value proposition should be constantly improved and adjusted based on the audience you speak to.

Here is an example of refining a value proposition statement after receiving feedback that it is too vague:

Before: We help teachers to organize their workload by creating technological shortcuts.

After: We help K-12 teachers to organize their administrative workload by creating technological shortcuts that streamline processes.

Once you’ve refined your value proposition, you can use it to inform messaging in many different places, including:

On all marketing materials (email campaigns, website, flyers, social media)

• In your introduction during events
• On your business cards
• On your LinkedIn bio
• Building organic word-of-mouth