Value proposition is one of the most popular topics we teach about. Getting your value proposition right is maddeningly difficult but highly rewarding. As they say in “The Town” before robbing Fenway Park, “If it was easy, everyone would do it.”
So, it wasn’t surprising that we received an inordinate amount of questions during our recent Web clinic – Do You Have the Right Value Proposition? How to test, measure, and integrate your Value Proposition online.
Unfortunately, we can’t answer every single question we receive. But I passed several of the questions around the labs, and here is what our research team had to say…
Q: What can you recommend for a new business that may not have an established record to say we have the most, best, etc?
– Erik P
Dr. Flint McGlaughlin: Well I’ll tell you what consultants do. They offer to work for somebody at a loss or free or at a reduced rate to get some big names to write your way into it. That’s how you’re trained. Then you go back and say, “We did work for American Express.” Never mind the fact that you offered to do the project for free so that you could claim that you did work for American Express. Then they go back and do two more big brands and they leverage it.
So, the reality is the only thing you can do in the beginning of the company is to justify why you’re in that company to begin with – and often it’s because you spent 20 years working in the industry as the senior vice president of X.
Use your story to justify your place. A proper compelling story – like the team itself.
What does a venture capitalist buy? I’m telling you right now, if you give your business plan to a private equity or a VC group, they’re going to look at your value prop in the front, flip all the way to the back of the book and look at your team. Who are these guys? What have they done before?
And they’re going to base most of what they do with you on the team. And that’s not just my own experience, I read the exact statement last night in a book. They’ll skip all of that to get straight to the chase. Same thing I did.
My point is, a team is a series of stories of the people behind it and you have to leverage it. Especially in a service business.
Q: When you conduct tests, is it necessary to track through to successful sales conversion (i.e. buying) – to REALLY see which messages work for those people who are your customers? Or is it OK to just test through to the action (ie, clicking through on your offer)?
– Amy P.
Spencer Whiting: Certainly tracking it through to the Key Performance Indicator is preferable. We have had situations that this is not possible. In that case, a click can be tracked to get an indication of how pages are performing.
The risk is that a simpler call-to-action, with very little information, may very well produce more clicks, but visitors are actually clicking because they are just curious. These curiosity clickers are not buyers. If you were using the CTR as a measure of success, the simpler page may very well win, but ultimately be the poorer performer.
Q: Can every business find its value proposition?
– Svetlana P.
Bob Kemper: Hi, Svetlana, good question. While every business should be able to express “a” value proposition, that does not mean that it is the company’s “best” value proposition, let alone the (separate) company’s PRODUCT value proposition.
Further, it does not necessarily mean that it is a “compelling” or “effective” value proposition. Here is a more detailed discussion of how to discover your optimal value proposition, with a step-by-step process.
Q: In Step 4, how do you measure which performs the best? Clickthrough? Or final conversion? I am assuming that the audience is always the same across all the tests.
– Randhir V.
Spencer Whiting: Final conversion.
Q: We are an equipment manufacturer. We need the VP defined BEFORE we define and build the product (12-24 months before intro). How can you use this research approach in that context?
– Rice W.
Gaby Paez: This is actually a great case for a value proposition test. Even when the product does not yet exist, you at least know or have an idea of your target segment, how would they search for this new product, and most appealing benefits of the new product.
You can setup your value proposition test with PPC, affiliate, and/or display traffic channels and direct traffic to a landing page that briefly talks about the new product. Also, you could have a short survey to collect additional information that could help the product building process. It is likely you won’t receive many submissions, but it won’t hurt having it. The goal of the test is to see which ad of your campaign collected the most clicks.
Q: Thanks for the chance to ask a question. What is the difference between a value proposition and a university’s mission statement?
– Daryl S., Manager, Media and Communications
Spencer Whiting: To me a mission statement is used to focus the efforts of an organization and the value proposition is a statement of an organization’s value is to its customers.
Q: How did you solve for pre-existing brand awareness among respondents?
– Larry M, CMO
Bob Kemper: Good question. Since the test is conducted using live production traffic, “solving” for brand awareness is secondary to raw relative performance. Once that’s established, then – particularly if there was a comparatively small difference in effect size among multiple treatments – we might study that attribute in a subsequent test iteration.
Q: If different values resonate with different channels, why use PPC so heavily to determine which value to focus on?
– Jon S.
Spencer Whiting: The benefit of determining your value proposition through PPC is that for a relatively small investment you can determine the value proposition for each channel or keyword. Creating a very clear and specific value proposition is the most important aspect of the sales process that you can control.
Photo attribution: photosteve101