One of the most important goals of marketing is to get people talking about your business. When people are thinking and talking about what you do, revenue is sure to follow. Perhaps the best way to get people talking about your business is to stand out from the competition–to differentiate your business by doing something in a way that others don’t.
These days, that translates into the need for deep, empathetic, insights into the desires, goals and pain points of your ideal customer and designing an experience that fits THEIR needs. That differentiation is called your “value proposition”, which isn’t nearly as much about price as your average classical economist might claim.
An effective marketing strategy is built on a strong value proposition or “core difference.” As you implement a customer-centric focus in your business, it is vital to understand what your customers love about you and what they say makes your business different. This is quite different to just “having great service” or competitive pricing. If your core message is that you have the best-priced solution remember that, to quote John Jantsch, there is always a competitor “willing to go out of business before you” in an attempt to undercut your market share.
The Value Proposition Canvas
Up to seventy-two percent of new product and service innovations fail to deliver on expectations. The value proposition canvas can help you anticipate and deliver what your customers really want and need. It enables you to visualize, design, and test how you create value for your customers.
The Value Proposition Canvas is made of a Customer profile and the Value Map. It’s designed to help you focus on the customer’s “jobs to be done, pains and gains” and then address each point to form the core of what you should offer and how.
The customer profile
The customer profile helps you identify and describe the tasks your customer is trying to get done. These tasks might be functional, social, emotional, or any other category in life.
Next, it highlights what your customers struggle with when trying to get the task done. What pains and negative outcomes would your customers like to avoid or eliminate from the process?
Finally, the customer profile identifies customer gains, which describe how customers measure a job well done. What do they want to experience or accomplish, and how do they want to feel in the process?
As you learn about your customer’s profile (their jobs, pains, and desired gains), you can track, visualize, and test your understanding of your customers. The information becomes more accurate and reliable as you gather information and learn about your customers.
Even if you don’t have the immediate resources to run through an entire Design Thinking exercise, interviewing customers that are profitable, and that really love what you do, is a great way to start.
The critical part is making sure you’re really listening – and not leading them to the answer you want to hear. The goal should be to eliminate any daylight between what your customer finds critically valuable and what you offer as a solution.
The value map
The value map lists the products and services your value proposition builds on. You describe how your products and services will minimize or eliminate the specific pains your customers’ experience. How do your services or products make their lives easier?
The value map also outlines how your company will produce or maximize the outcomes and benefits your customers expect or desire. The value map calls this “gain creators.”
In short, the value map helps you describe and communicate exactly how your product or service eliminates pains and creates gains for your customers. This will help you to identify and refine your value proposition. You can make changes and adjust things until you find what truly resonates with your customers.
You identify your value proposition when you make a clear connection between what matters to your customers and how your products or services will ease pains and maximize gains. Great value propositions focus on the most critical jobs, pains, and gains of their customers. You must start with the customer, then offer a viable solution.
Unfortunately, many businesses prefer to think they know more about their customers than they actually do – sometimes drawing too many conclusions from the gut feeling of a charismatic leader or boss. Just remember that it’s not up to the boss to simply declare what’s valuable.
Your customers define your value proposition–not you!
Your value proposition is an essential part of transforming your business into a customer-centric model. Here’s the key: your customers define your value proposition, not you! You know what you do that is different or better than your competition, but your customers understand what sets you apart in the ways that matter to them.
Maybe you do have better customer service or higher quality products than anyone else (and your customers know that), but is that what your customers really love about you? Perhaps what they appreciate is the fact that you guarantee you’ll show up on time for your service appointment or they get a discount. Maybe they are loyal to your business because you return their calls and emails within 4 hours.
Differentiating yourself doesn’t mean you need to do something big, expensive, dramatic, or controversial. You just need to do something better, faster, or in a unique way that meets your customers’ needs to meaningfully ease their pains and maximise their gains.
Ask your customers to tell you your value proposition
How can a small business start really start to uncover its value proposition? First, create a list of ten to twelve of your ideal clients. This group should be a subset of your most profitable customers or clients who actively sing your praises and refer new business. Interview them, either by phone or in person, and invite them to share the details their experience with your business.
If they say you have great service – push them further to explain what that really looks like. What are they really trying to get done when they buy from you and what is unique about how you deliver?
Ask questions like, “Why did you hire us?” “What is one thing that we do that you appreciate the most?” “What is something we do that other companies don’t do?” “If you refer us to a friend, what do you say?” “Tell me about three other companies that you love to use.”
You aren’t looking for scientific data points; you’re looking for stories, repeated phrases, and common themes. These kinds of questions help you see your business from the customer’s point of view. What do they see and experience and what problems in their lives are you solving for them?
Don’t be afraid to talk to your customers
Customer interviews reveal valuable information and insight about your company, especially in this age of empowered and informed customers. This is an essential part of any significant rebranding, transformation project, or product launch.
Even if you offer a product or service that has no competition, customer insights can help you anticipate unmet customer needs and continue to build a loyal base. Regular, quality, feedback from your customers can give you insight that enables you to keep up with and meet their expectations. Former Virgin Australia CEO, John Borghetti, was well known to travel weekly in economy class on his own airline to gather feedback in person.
Follow-through is critical
The first step toward becoming a customer-centric business is to listen to your customers and respond empathetically, and systematically, to their feedback. Customer-centric companies are relationship-driven. An essential part of any relationship is truly listening, then acting in response to what you hear.
When you decide to speak to your customers, be prepared to act on what they are really saying. Every conversation raises their expectations of you – and that’s a good thing! You may be surprised at just how much they will want to help you deliver more of what they love.
The Value Proposition Canvas can be a very useful tool to help find your core difference or value proposition in a clear, organised way. It’s the most important element of any business model worth the paper it’s written on. It doesn’t matter if you have the resources to create and sell something if the market doesn’t necessarily agree.