The 3 Components of a Strong Value Proposition
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By Nancy Nardin
The 3 Components of a Strong Value Proposition
Crafting a powerful value proposition that resonates with a C-suite audience is as much an art as it is a science. A well-presented value proposition not only articulates the unique benefits of your products or services, but it also personally addresses the specific needs of that audience. To help your sales and marketing team craft the perfect value proposition, we’ve broken out the top three components that all strong value propositions have in common.
But first …
WHAT IS A VALUE PROPOSITION?
A value proposition is a single statement that communicates the value delivered by your product/service to your customers. It articulates what your product/service does and why they should choose you over a competitor. It’s not your tagline. Nor is it your brand.
Your value proposition is your opportunity to communicate the intangible benefits of your solution that speaks to the actual needs of your target audience.
THE BENEFITS OF A STRONG VALUE PROPOSITION
The key benefits of a strong value proposition are straight-forward. The more powerful your value proposition, the easier it is for your sales team to close a prospect. A well-formed value proposition addresses both the problem your prospect is facing while providing them the perfect remedy — your product or service.
Not only can a strong value proposition help you increase your close/win rate, but it can also increase revenue. If you’re offering the market a premium product at a premium cost, a strong value proposition can serve as the perfect foundation to help to justify the higher price point.
3 COMPONENTS OF A STRONG VALUE PROPOSITION
Regardless of the product or service being sold, high-performing value propositions tend to share three common aspects.
Strong value propositions highlight the “How” (will your solution solve a problem) and “how much” (the financial benefits your solution delivers). Specifically, they address three areas:
- Identify a specific problem being dealt with by a specific audience.
- Articulates how the product/service being sold solves this specific problem.
- Communicate the audience-specific intangible and quantifiable benefits of the solution.
Combining these elements results in a powerful, simple statement that provides your target audience with a clear understanding of your offer and why they should care about it. Let’s explore each of these components in detail.
Component 1: Identify Your Target Audience and The Problem You Solve For Them
An effective value proposition must resonate with its intended audience. You can’t expect a single positioning statement to speak to everyone. When crafting your value proposition, start by identifying your core target audience. Are you speaking to C-suite execs? Mid-level managers? Each audience may share a similar need, but they’re desired solution may vary drastically.
For example, the C-suite may be more concerned about ROI and the financial impact of the solution, but a director might be focused on gained efficiency and productivity. Knowing to whom you’re speaking to can help you determine how to explain the specific problem your product or service solves.
With your audience identified, your next step is to succinctly state the problem you’re solving for them. Some audiences are aware of their problem, while others are only aware of the symptoms.
Putting the problem you solve into written words conveys to your target audience that you understand their needs and have the perfect solution for solving their pain point. Articulating what your solution does allows you to push interested prospects further down the funnel.
A potential client can read your statement and self-identify if the product is right before contacting your sales team. The result is your sales team spends more time talking to prospects that have already self-identified as a qualified lead.
Component 2: Cleary Articulate How Your Product Solves Your Target Audience’s Specific Problem
It’s not enough to simply state the problem your solving. You need to also provide an understanding of how you solve their problem. Here’s where the art of a well-crafted value proposition comes into play.
Many businesses use their value proposition as an excuse to brag about their award-winning platform or casually list every feature they offer. This is unnecessary and can turn off potential prospects.
Instead, use the description of your product or service as an opportunity to further illustrate to your target audience that you understand their needs. In other words, be empathetic. Provide the context that identifies to how these features help solve your target audience’s specific problem.
Component 3: Communicate the Audience-Specific Value of Your Solution
Unless you’re in an industry with little to no competition, chances are your competitors may have similar products or services on the market. A strong value proposition is your opportunity to differentiate yourself in the market by communicating the benefit (value) of the features of your solution.
Common examples include focusing on:
- Easy to use cloud-based platforms with API integrations (saves the customers time)
- Onboarding and installation support (ensures the platform gets adopted by the customer’s team)
- Guarantees or warranties (reduces risk)
- Fully-staffed customer support (provides security)
- Expertise and reliability (communicates trust)
- Customer-specific KPIs that highlight the financial benefits of the solution
As you can see, each value point communicates a potential sales-blocking concern shared by most prospects.
BRINGING IT ALL TOGETHER WITH THE RIGHT LANGUAGE
With your components identified, it’s time to bring everything together under a single statement — your value proposition. As a best practice, you want to keep brevity top of mind when crafting it.
In addition to keeping your statement concise, you also want to ensure you’re using the right language. Specifically, the language of your target audience. For example, if your value proposition is geared toward targeting C-suite clientele, you may want to incorporate more financial language to grab their attention.
When you speak the same language as your target audience, you can better ensure that your value proposition will resonate with them and fully comprehend how your solution fulfills their needs.
STRONG SALES COME FROM STRONG VALUE PROPOSITIONS
Whether you’re a SaaS platform, professional service provider, or purveyor of physical goods, a strong value proposition can help improve conversion rates and increase sales.
This week’s post is by guest author, Melody Astley, VP of Sales and Strategy at FinListics. Their software has helped dozens of Fortune 500 companies and thousands of sales professionals close larger deals quicker through proven selling techniques, quality sales intelligence, and tools to map your solutions to clients’ key financial metrics.
Source:: Smart Selling Tools