Value Proposition: How your peers find the most effective value prop
At MECLABS, we’ve conducted a lot of research on value propositions. We found this element to be so essential to successful marketing, we included it in our Conversion Sequence, which our researchers use during their optimization research.
Your value proposition is the primary reason a prospect should buy from you. And since it is such a vital building block to successful marketing, you would think every professional marketer would have this down cold. But from past analysis and audience interaction, many are entirely missing the boat on what their “primary reason” should be.
In fairness, once you’ve taken a sip of your company’s Kool Aid, it’s very hard to get truly discover what your value prop should be. So, in today’s free Web clinic at 4 p.m. EST – Do You Have the Right Value Proposition? How to test, measure, and integrate your Value Proposition online – Dr. Flint McGlaughlin, Managing Director, MECLABS, will share our value proposition discoveries to help you nail this crucial element of your marketing programs.
But first, we turned to your marketing peers and ask them how they find the most effective value proposition. Here are a few of our favorite nuggets of wisdom…
Product or brand?
The first thing you need to determine when deciding on your most effect value proposition is whether you are selling a “product” or a “brand.” Let me explain.
If a prospect is looking for a product, this is typically a product or service that either they have not bought before or in cases where yours is one whose feature set is much greater than one they have purchased before.
In this case, the value proposition must first sell the visitor on why they should buy this type of product or service. Once they are convinced that they need this type of product or service, they must then be sold on why to buy it from you.
When you’re selling a prospect on a product, you typically highlight benefits of owning the product, namely what’s in it for them to buy your product or service. If they already buy something similar and you’re trying to get them to upgrade to your product or service, focus on additional benefits they’ll receive once they have upgraded.
Remember that when selling a product (as opposed to a brand), you’re not just in competition with your competitors. You’re also in competition with them doing nothing at all, in many cases. After all, if they have found a way to do what they need to without your product or with a lesser version of your product, you must first overcome the resistance to do nothing at all. Time-sensitive promotions may help here, which not only give prospects a reason to act, but to act NOW.
If most of your prospects are currently buying something similar to your product or service, you’re selling the brand, since they’re probably already convinced that they need this type of product or service (or they wouldn’t be buying it now). Mostly, they just need to know why to buy it from you.
When selling a brand, you want to focus on competitive differences between your product or service and competing options. Focus on benefits, providing examples of how their lives will be better with your product than without it. You may want to identify pain points they now suffer with that your product or service will alleviate. Include both logical and emotional reasons to act now.
When selling a brand, as with selling a product, you also often have to compete with the option to do nothing. For example, if I host a web site on one ISP, it may be a lot of work to move to a new one. As a result, it may take far more to get me to switch providers than it took to get me initially to sign up for the ISP I have. Here, time-based incentives may work well, creating a “ticking clock” scenario that prods a prospect to act now.
You may want to offer incentives for a prospect to switch from a key competitor, such as waiving start-up fees, sweetening the pot with a discount, or giving the first month of a subscription-based service free.
When seeking your most effective value proposition, it’s important to understand each of the major demographics to which you’re selling. Put yourself in the shoes of your prospects. Feel their pain points and imagine what it will take to get them to take action, whether that is to make a purchase, provide personal information in a Web form, or even to take a micro-action, such as clicking on a link.
Gather all the ideas you can and refine them as much as possible, but when it comes right down to it, you’ll have to test and let your customers decide through their measurable actions the messaging to which they respond best.
The most skilled testers I have encountered will accurately predict the winning experience in a given test at most 75% of the time. Even if you’re one of these experts, you still owe it to yourself and to your business to test your assumptions. You can learn some amazing things about your audience that you might never have discovered without testing.
Disclaimer: My views are my own, and do not necessarily reflect those of my employer, Adobe Systems Inc.
– Steve Myers, Optimization Consultant, Adobe Systems
Value, Fascination, Authenticity
There are three key factors to optimizing your value proposition.
Explore what products or services people buy – not necessarily from you, but from companies within your industry. Take each item and rate how well your company delivers (value, price, functionality, etc.). Prioritize your best, and most popular products/services. Fix (or kill) what is of little value. Enhance the good stuff.
Explore exactly why people buy from you. Assuming it’s NOT price, (if it is, don’t bother with any of this) dial up the mystique, or prestige, or trust, etc. to become irresistible.
Learn how to communicate with your audiences so you have two-way dialogue. Don’t SELL them. TALK to them. They will tell you the value proposition that is most appealing.
– Rob Dalton, President, RocketFuel Marketing Mentors
Find the intersection
Your value proposition lies at the intersection of unmet market needs, company core competencies and currently unclaimed positions.
This is found through market research (customers, potential customers, industry experts, employees), an honest assessment of operational capabilities, and competitive analysis. Therein lies your unique position.
The next step is to craft a compelling, customer-centric message. Tweak it and test it.
– Kristin Tedesco, Marketing Consultant, Next Lifescience
And one of my favorite quotes I’ve come across about value proposition…
“Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.”
– “Strategy Maps” by Robert Kaplan and David Norton
Do You Have the Right Value Proposition? How to test, measure, and integrate your Value Proposition online – Today’s Web clinic 4-5pm
Optimization Summit 2011 – June 1 -3