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What is a Value Proposition and Why is it Important for Your Business?

Photo Credit: iStock.com/Yuri Arcurs

“Why should I buy from you?”

If you and your team can’t answer this question immediately and succinctly, it is time to create what’s called a "value proposition" or alternately a “core value proposition” for your business. It’s the distilled statement of what your business does, who it does it for, and the value you provide for for customers.

Here’s what you need to know about crafting a powerful and memorable core value proposition.

What It Isn’t

A core value statement isn’t a tag line, motto, or slogan, though those are all lovely marketing tools for businesses. Instead, this type of statement succinctly and clearly sets out the value your business brings to customers in no more than a few short, compelling sentences.

Why Your Business Needs One

Creating a core value proposition arms you and your sales team with a clear and consistent message about what your business it about. It sets the tone for what customers can expect from you and what sets you apart from your competitors.

Think of it as a highly persuasive invitation to find out more about your business. It gives people a reason to pay attention to your company and to take action, whether that means booking the meeting, asking for a quote, or buying the product or service.

Questions to Ask Yourself

Don’t create your value proposition in isolation. Get together with all staff members. Brainstorm the words/phrases that most accurately capture the essence of your business in a way that makes it irresistible to your target customers.

To get the ball rolling, answer the following:

  • What’s our main product or service?
  • Who’s our customer?
  • Why is our product or service better than the competition?
  • Are we more affordable than competitors, do we have faster processing times, are we easier to use?
  • How are we unique in our market?
  • How do we simplify our clients’ lives?
  • How can we prove our claims of value?
  • Will Your Killer App Idea Make Money?

How to Craft a Core Value Proposition

A core value proposition must be memorable, succinct, and true. Comb through the results of your brainstorming session to find the phrases and words that best capture your business’ unique value. To flesh out your value proposition, make sure to include not only what makes your business unique, but at least one verifiable reason your business provides good value for customers. Rearrange them in different ways until you find the phrases that not only sum up what your business does, but that will resonate with potential customers. Think about the language your customer uses and understands.

Value Propositions That Work

A strong value proposition simply and clearly states what makes your company worth doing business with.

Sometimes short and specific is all you need: “Leading edge Scandinavian design at bargain prices.”  If you’ve ever been in the market for modern and inexpensive furniture for home and office you’ll recognize this core value proposition belonging to IKEA.

It might make sense to focus on the most memorable promise of your brand: “With every pair you purchase, TOMS will give a pair of new shoes to a child in need. One for One.”

A longer proposition is sometimes needed in areas like the sharing economy, where clients use the service to both provide and source a product or service. Take the example of Airbnb:

Airbnb is a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet. Whether an apartment for a night, a castle for a week, or a villa for a month, Airbnb connects people to unique travel experiences, at any price point, in more than 34,000 cities and 190 countries. And with world-class customer service and a growing community of users, Airbnb is the easiest way for people to monetize their extra space and showcase it to an audience of millions.

A core value proposition must be memorable, succinct, and true. Whether crafting a shorter or longer statement, remember that it should present a clear and concise explanation of why your business is the best choice for your target customers.