Welcome to our 6-week blog series, the Marketing Map Tutorial. Every week, we'll go in depth into one of the elements of a successful marketing plan to help your business flourish. This week, we'll go over your value proposition, and how to determine the best way to reach your customers.
What's a Value Proposition?
Your value proposition is what defines your company. What makes your company better and different than your competitors? In other words, why should a customer visit your business over a competitor's?
Think about what your customer really wants, and how you can fulfill that desire. If a customer was to ask you why they should purchase your product or service, the value proposition should answer that question in one quick sentence. Refrain from being general in your proposition. Your answer must be precise and thought out.
Consider the Best Bean example from last week. Best Bean has discovered through target market research that nearby workers are bringing coffee from home rather than buying coffee at work because the local shops take too long to serve customers. The target market is unsatisfied because they feel they are waiting too long for a cup of coffee.
Because of this, Best Bean has introduced a speed lane in its shop just for beverages. The speed lane will cut down on customer wait times and will attract customers that have tight time constraints. Best Bean has identified an issue in the market and has built a value proposition around solving that issue by increasing its efficiency and still maintaining the excellent quality of coffee that it is known for.
Steps in a Value Proposition
A value proposition should be crafted to fit your situation. At its heart, a value proposition should be the opportunity you saw, before you opened your business, put to paper. Think about why you decided to open your business in the first place. Did you see a deficiency in the market? Did you notice competitors were vulnerable somehow? How were they vulnerable?
Best Bean saw that its competitors were slow and under-serving local office workers. By increasing efficiency in its serving process, Best Bean was able to secure a large and loyal following in the local market.
To craft a value proposition, you should identify a few key things. The first step should be to identifying who the value proposition is for. Target market research is the key to this first step. You have to know your market before you can know your value proposition. Why is your market feeling unsatisfied or under-served? The answer to this question is what will shape your value proposition.
The next step is your solution to the issue in your target market. Is it a product or a service? Best Bean’s solution was to streamline its service process and decrease the time needed from the customer order to them being served. Justify why you are pursuing this solution. How does it solve the issue in the market? Remember to be precise and don’t think generally. Be as clear as possible when thinking about your proposition.
Finally, what makes your solution different from other solutions that have been tried in the market? Don’t simply repeat what somebody else has tried and hope for a different result. Repeating the same action continually and hoping for a changed result is the definition of insanity, according to Albert Einstein.
Here's Best Bean's value proposition: To serve coffee lovers high-quality coffee faster than anyone else around.
The Finished Proposition
Now that you have your value proposition, go over it and consider what you have created. Are you comfortable with the amount of research behind your target market? Do you feel that the deficiency you have identified can reach a wide enough audience? What about the cost to fill this deficiency?
It can be extremely expensive to perform R&D and market testing on a product, only to find out when the launch comes that demand wasn’t nearly as high for the product as you previously thought. A cost/benefit analysis can be incredibly useful in situations like this.
Say you identified an under-served market segment. Is there a reason why that market is under-served? It’s possible that that subsection of the market is under-served because the cost to fill that niche is more expensive than the potential profits by doing so.
Just because there is a potential need in the market doesn’t mean that you should go chasing it. Marketing for any business should be focused and clear. Chasing multiple small niches can defeat the intention of a marketing plan and can make your business appear unfocused and lacking identity.
What’s Up Next?
Next week, we will be going over how to select a channel to reach your target market, whether it’s through email, social networking, website ads, etc. The proper channel can make all the difference in your marketing plan, so knowing how to reach your market is a huge part of any marketing research. We will also discuss the strengths and weaknesses of each channel, so you will know what channel fits your needs best.