Value Propositions 101

03/19/2009

Everyone has their own favorite way of creating a value proposition.  As I have mentioned before I like the one defined in Crossing the Chasm.  The format looks like this:

For: (bulls-eye customer)
Who: (key purchase motivation insight)
Our product is a: (customer language)
That: (key benefit)
Unlike: (key competitors)
Ours: (key differentiators)
At a price: (less than, equal to, or higher than competitors).

I’ve been doing a bit of value proposition work over the past couple of weeks so I have this on the brain right now.  Here are some tips on how you might think about each of the pieces of this.

For: (bulls-eye customer)

In my mind this has to encompass not only some thinking about what segment the customer is in (i.e. Retail SMB, Transportation, etc.) but also who the buyer is.  If you have more than one buyer, be prepared to create more than one value proposition (if you want to learn more about buyer personas I recommend Adele Revella’s excellent Buyer Persona Blog) It’s important to be honest with yourself here.  Most smaller companies want to sell higher up in the organization than they are selling.  If your sales folks are mainly talking to mid-level IT managers, having a great CIO value proposition won’t get you all that far.

Who: (Key purchase motivation insight)
Put another way, this is the reason your target customer is looking to buy something in the first place.  It’s a description of the problem your solution will solve (As an aside – I have heard folks talk about “jobs” that products perform but that just doesn’t seem very customer oriented to me.  I have never heard a customer say they wanted to “hire” a product for a “job”).  I’ve often asked the question “what is keeping this person up at night?” or “How is this person’s performance measured?” Again, it helps to be brutally honest here and not confuse what you think your product is good at with what the customer is actually looking for.

Our product is a: (customer language)
I’ve beaten this one to death in a couple of other posts but put simply, this is how a customer would describe what it is you do.  And I can tell you right now they aren’t going to call your product “An innovative, next generation Web 3.0 framework”.  Seriously.  They aren’t.

That: (key benefit)
This part is the expression of the value that your solution brings.  When working with companies on value propositions, I usually find that the hard part about this one is getting focused on value that lines up with the key purchase motivation.  Your product might have lots of nice to have points of value but if it doesn’t provide value that lines up with the key reason the customer wants to buy, you are in trouble.

Unlike: (key competitors), Ours (key differentiators)
In this section you list the key competitors in the space and articulate what you can do that they can’t.

At a price: (less than, equal to, or higher than competitors)
I’m often tempted to skip this part but usually end up thinking it is really important by the time I get done all of the other sections.  In particular, in this economy, the issue of price is huge in the minds of customers.  If your price is higher you better have a pretty strong case for customers as to why they should be willing to pay a premium for your product or service.

So I will leave you with this example Value Proposition for this blog:
For marketing staff working at technology start-ups who want to learn more about marketing best practices, Rocket Watcher is a blog that provides practical, experience-based information on product marketing in an (occasionally) entertaining fashion.  Unlike other marketing blogs that focus only on one facet of market, such as public relations or social media marketing, or marketing blogs written by marketers working at large companies, Rocket Watcher covers the broad spectrum of marketing issues that start-up marketers deal with everyday with an understanding that people and money are always constrained.

This can be then simplified as:

The Rocket Watcher blog provides an entertaining, practical look at product marketing for start-ups.  From social media, to traditional product marketing to public relations, Rocket Watcher aims to help start-up marketers make the most of their limited resources.

Further simplified:

Rocket Watcher: Product Marketing for Start-ups.

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