What is a value proposition?
Despite being used widely in business strategy discussions and online, value proposition is a misunderstood term. There’s many marketing terms that seem to cover the same thing: slogan, brand tagline, USP (unique selling proposition), positioning statement and value proposition. Each of these has their use and should be considered as part of your overall B2B branding planning.
To put it as simply as possible, a value proposition is a clear and concise statement of:
- what you will deliver (whether it’s a product, service or solution)
- why it’s valuable, and
- your promise that you can deliver what you state.
A good value proposition is the key reason why a prospective customer will buy from you and should be used in all your interactions with clients: from phone calls to emails to sales presentations.
Why do I need a value proposition?
B2B decision-makers don’t care about what you’re offering. They only care about what it does for them, how it helps them by solving a problem or improves their current situation.
The latest statistics show that we now have a shorter attention span than a gold fish (that’s why I’ve bolded this sentence). If you’re reaching out to someone, you only have 8 seconds to get your message across and try to keep their attention.
Similarly, if someone is researching the product or service you offer (lead generation), you have to be able to stand out amongst all the other competitors and messages.
What makes a valuable B2B value proposition?
Your B2B value proposition should describe what makes you clearly the best choice for your specific target audience. One of the main reasons value propositions don’t work is that companies try to write a value proposition that includes too many audiences. By doing so, it makes the value proposition too generic and doesn’t resonate with anyone.
A good value proposition includes four main characteristics:
- It is targeted: you know who you’re speaking to and what their issues or motivational drivers are
- It is relevant: It explains how your product solves their problems or improves their situation
- It has a quantifiable value: you can demonstrate specific benefits and how they can be delivered
- It is unique: It tells your prospects why your offer is better (and therefore more valuable) than your competitors.
How to write a valuable B2B value proposition?
Noted sales expert Jill Konrath has a great tool to create a compelling B2B value proposition. Jill recommends including three key elements in any value proposition to ensure that it really focuses on:
- A business driver (the primary business reasons that customers would use your offering
- An action (customers won’t change unless your offering is significantly better for them than their status quo)
- A metric (metrics makes your value proposition even stronger and more believable, especially when they’re specific and not rounded).
Jill also lists a range of the elements to give you an idea of what words really work in a strong value proposition.
1. Business driver elements:
- lead conversion rate
- cost of goods sold
- operating costs
- labour costs
- share of customer
- time to profitability
- turnaround time
- customer retention
- profit margins
- market share
- time to market
- lifetime customer value
- sales velocity
- inventory turns
- employee turnover.
2. Action elements (she calls them ‘movements’):
- free up
3. Metric elements:
- Time frame
- Dollar amount
Some of these are likely to suit your B2B business, but they do demonstrate the strong, results-focused language that is required in a valuable B2B value proposition.