Nowadays, business practitioners are facing very tight competitive environment. They must struggle and strive hard to win the competition. Therefore, they do their best effort to design a distinguished strategy for getting more consumer and try hard to convert current customer to be a loyal customer.


They test several strategies, starting from basic strategy like cost reduction in producing a goods or cost saving in purchasing a material, etc. so they can give more discount to prospects for enticing new customer. And more strategies they try.


If they do B2B, they try to persuade their reseller to buy the higher volume, so that the reseller can get the lower price. As a consequence, the reseller can get more margin. This is the thing that can persuade the reseller to buy more.


And, there is one strategy that I will discuss in this article, namely value proposition approach strategy. Basically, in this strategy, you will educate your target audience an outstanding value of your product or service, so they realize the beneficial of your product and become less price-sensitive.


You will see value proposition example in the last section. I hope you will get understanding how important  a value proposition is and implement it in your business.

What is value proposition?

The value proposition definition below, I take from Wikipedia.


Definition of Value proposition from Wikipedia : a promise of value which will be delivered and also belief from the customer that value will be delivered and experienced or enjoyed. In addition to this, creating an outstanding value proposition is one of marketing strategy.

Steps to build an outstanding value proposition

Please read four step building value proposition in Forbes. In this site, Michael Skok, Forbes’ contributor explain us the step for building an exciting value proposition.


According to Michael, value proposition is your positioning that explain some benefits you deliver to your target market and how do it competently. The keys are: you have to get clear understanding your target market, the solution you provide to solve their problem, and how you treat them uniquely well among others.


There are four steps to build this value, they are: define, evaluate, measure, and build. You can read more in the website.


Once you read that article, I believe you can develop and build a unique value proposition for your business.

Here are value proposition examples

In order to educate your prospects the value, you must perform some actions below:


1. Carry out deep research to make your clear ultimate values.

2. Make the distinguished values that make you different from others.

3. Convert the values to qualitative measurement.


Once you found your distinguished value proposition, you must deliver this values with appropriate manner to your prospects. It means you must show them the values in number, in other words convert the intangible/abstract things to tangible/concrete that can be counted.


For examples:


1. Your ultimate value is the product efficiency.

You can convert this intangible value to financial term, such as cost saving amount of dollar.


You must communicate to your customer or your prospect, like this: our product can reduce your living cost. Because it can be used only one box for 7 days, whereas another product need 3 boxes for 7 days. The conclusion is, you can save approximately $100 each 7 days.


2. Your unique value proposition is productivity.

You can convert this value to a number.


For example: By utilizing our product, your productivity will increase. In other words, you can reduce your work time because it can make faster operation ( 2 hours faster than utilizing general product in the market).


3. Your outstanding value proposition is endurance.

You can convert this value to a number of a time, like: week, month, year, etc.

Suppose the R&D department has found that your product durability is longer than similar products in the market, state clearly the approximate time. For example: Our product life-time is two years longer than other general product in the market.


4. Customer value proposition.
You have found that major of your target audiences are love to share. They are happy by giving and sharing to others.

So you can show them your social benefits. You must do a special program, such as every 1% of customer’s payment, will be donated to orphans. Therefore, you must communicate to your prospect or your customer clearly that you will donate 1% of your payment to orphans.

Summary

I will to ask you gently, suppose I take one of the value proposition example above, then If you benchmark the words between:


“My product can reduce your cost”


or


“By using my product you will use just one box for one week, whereas similar product in the market you must use 3 boxes in the same duration. So you save $100 each 7 days"


The question is, which statement is more convincing you and persuade you to buy, first statement or second statement?


I am sure you answer that second statement is more persuasive and more compelling, and it make you decide to buy the product.

The conclusion is, value proposition approach is important to be implemented in your business.