If business is humming along splendidly, and customers are flocking to your services or products like crazy, then chances are (congratulations), you’ve nailed your unique value proposition. But if you’re having trouble creating interest for your brand, then it may be time to take a closer look at what you have to offer and how you’re offering it. There is plenty of advice around the web on how to do just that; here are a few points that may be especially helpful.
A value proposition answers the question: What is it about what your company that makes it special and essential—and to whom and at what price? As Michael Porter, director of the Institute for Strategy & Competitiveness at Harvard Business School, notes about strategy, it’s useful to think of the value proposition as a triangle with points asking three specific questions: “What customers,” “Which needs,” and “What relative price.”
In business as in life, you can’t make all people happy all of the time, so a value proposition needs to zero in on exactly whose lives you’ll have the unique ability to improve (while, of course, also making sure that this segment of customers is large enough to sustain your business). Spreading the word about your company offerings should take into account not just people who will be directly using your product but those involved in deciding to purchase this product.
As for needs, this is often the most compelling reason for building your company—and, in turn, the most compelling reason why consumers will flock to it. As Ann Miura Ko, partner of the venture capitalist firm Floodgate and a Stanford University lecturer put it, to build a strong value proposition, you need to ask yourself: “What insight do I have that is not yet conventional wisdom?” Know how and why your service or product is a better option than that of your competitors (if there are any) for the customers you’re targeting.
Michael Skok, a venture capitalist and founder of Startup Secrets, which runs workshops to help entrepreneurs, writes in Forbes.com that the best business opportunity arises when this need stems from a problem that is “unworkable, unavoidable, urgent, and undeserved” if it weren’t for the existence of your company. He also adds that if yours is a B2B shop, it’s smart to zero in on problems that are “blatant and critical.” That’s because a business’s survival (and a person’s reputation and job) depends on your service or product.
Some problems are “latent”—which means customers don’t know they exist yet—as well as “aspirational,” which Skok describes as “optional.” While they certainly can be a great business opportunity (see Apple’s tablet or even Instagram), these ventures may be a tough bet, especially from a B-to-B standpoint.
Anthony Tjan, founder of the venture capital firm Cue Ball, writes in Harvard Business Review that “there are only four types of consumer benefits that matter—and by extension—only four categories of value propositions that work. This includes “best quality, best bang for your buck, luxury and aspiration, and must-have”—each of which is more nuanced than you’d think. A best-quality product isn’t necessarily the most expensive, but they tend to be among the most respected; think of L.L. Bean backpacks or Crayola crayons. “Best bang for your buck” isn’t necessarily cheap, but a good price for what you get—like IKEA or Jet Blue. “Luxury and aspiration” refer to the Hermes and Mercedes Benzes of the world. And “must-have” includes the things certain segments of the population can’t live without (for instance, the Bloomberg Terminal for those in the financial services sector). If none of these sound familiar, then Tjian advises, “figure out how to reposition your offering.”
Whatever your angle, test it. Ask potential customers, what would it take to make this compelling for them? What price would be appealing? (Then ask yourself, would the fixes be doable on your end? Would you still be able to turn a profit?) A unique value proposition requires considerable thought, but once you have it just right, your company is much likelier to thrive.