Value Proposition
This week, we’re going to address the importance of the Value Proposition in creating a sustainable Competitive Advantage in the medium and long term.
The value proposition is the clear summary of the benefits of the product or service to be “delivered” to the customer, in order to distinguish it from the competition.
Through five simple questions, the company can start the process.
- What kind of product or service do I offer?
- Who is my target customer?
- What problem does it solve?
- How does it benefit my customer?
- How does it differ from my competitors?
The key elements of each question can be summarized as follows:
1. Type of Product: Determine the attributes that the product offers in solving the problem of your target market.
2. Segmentation: identifying the specific target audience for which the differentiated offer is most relevant. Understanding needs, wants and your preferences is crucial to fine-tuning the Value Proposition.
3. Problem: identifying the problem makes it easier to reach the Customer’s needs. It is these needs that lead customers to buy a product or service.
4. Focus on benefits: You should highlight the tangible and intangible benefits that customers get by choosing your company’s product. It is important to show that the “product” is able to satisfy the needs and present exclusive advantages for the customer.
5. Differentiation: incorporate in the Value Proposition the distinctive characteristics that make it unique and, thus, make it stand out from the competition.
The Value Proposition must be communicated clearly and concisely. In a nutshell, you must be able to explain why the service you offer is unique and how it manages to meet the customer’s needs in an exceptional way.
This Market Positioning must be aligned with all marketing activities, from advertising messages to online presence and sales materials, thus ensuring consistency in the company’s communication.
As the market and customer needs evolve, the Value Proposition may also need to be adjusted.
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