Value Propositions: What Are They & How Do You Write One That Generates Demand?

We all know how important it is to generate demand for our products and services. But what most businesses don't know is how to generate demand the right way, which means typically one of two things happen.

You generate leads, and very few translate into a genuine sales opportunity. Or, you attract traffic to your website but generate very few leads as a result. Either way, low demand means more outbound sales to luke-warm prospects at best, and we all know how that turns out.

The solution lies in how you frame your value, and often the simplest of tweaks can have an incredible impact.

When you get it right, you capture your buyers' attention and interest. Your messaging resonates with them; they engage with your content; their ears prick up. It's as if they've been treading water in the middle of the ocean, losing hope, and you turn up in a rescue helicopter. They reach out to you.

There is a method for defining and living your value proposition. It is one of the most powerful things you can do to grow your business.

That's what we're going to talk about today, and I have a model I'm going to give you that will show you what you need in place – it's my favourite model too!

Defining & Living Your Business Value Proposition

A value proposition is an academic term, which means people usually gloss over its importance or misinterpret what it actually is, which is a huge failure.

I'm not talking about creating a slogan or corporate jargon. Your value proposition is your promise to your current and prospective clients about the problem solving and goal attaining benefits you provide to them. It's more than a sentence of text. It's an attitude shift.

It's about demonstrating that you hold a distinct and superior place in the market for your area of expertise. Not superior in some vague "we're the best" type of messaging; but instead, specifically illustrating that you know what their problems and goals are, AND you have a system, products and services to get them where they want to go.

But, how do you solve their problems "better"? How do you get them to achieve their goals "better"? And what does "better" even mean? Is this faster, cheaper, for longer, forever?

Developing a great value proposition is a challenge, but the real art lies in how you actually live the value proposition. I have a model I'll share in a minute that will help you build this out, but first, let me show you an early first step.

What Is Your Business Selling?

What does your business sell? … Write it down on a sheet of paper or get your answer ready in your head.

Harvard Professor Theodore Levitt has the most succinct way of framing this … "People don't want a quarter-inch drill bit; they want a quarter-inch hole."

People don't buy your 'how'. Even though it's really important to you, you're proud of it, and the processes, steps and systems are fantastic, I'm sure. The reality is most people don't care. They want the problem-solving benefit.

Apple didn't have the world's first mp3 player, but their value proposition for the iPod took an mp3 player and set it on course to be the company you know of today. They didn't get bogged down talking about all the engineering brilliance. They focussed on the benefits; 1,000 songs in your pocket.

Your message should be about the benefits. Let me give you a couple of examples. Personal trainers are really selling self-confidence, lawn mowing companies are selling family-time, and insurance companies are selling peace-of-mind.

So, before I take you through the model I promised we'd cover, look at your answer. Is this the best description of what you really sell? With that in mind, earlier, I said we help our clients to define and live their value proposition. Living it is a crucial part. Let me explain what I mean.

The Extended Marketing Mix Compass^TM

I've used the academic concept of the extended marketing mix (7 P's) and developed a model, or perhaps more appropriately, a metaphor that I believe should guide a service business's approach to marketing. For want of a better term, I have called it the Extended Marketing Mix Compass™.

Let's build it out…

At the very heart of the diagram is your buyer persona. I'm sure you've heard of the concept of customer-centricity, having the customer at the centre of your focus. This is crucial.

Often, I see businesses creating products and services and marketing campaigns and then thinking about who this could be useful for. That's backwards.

You must design around your target customer's needs and wants, so all remaining elements in the 7 P's (which I'll get to later) are adapted to suit the core of this model and one another.

This brings me to the next layer; your core competencies. These things give you a unique position in the marketplace, which is hard to copy. They are your superpowers.

This is where your value proposition comes into play. It's how you deploy those core competencies in a way that is valuable to your buyer persona. Your value proposition can change over time to use your superpowers in a way that matches the evolving nature of your buyer personas. That's not to say it has to change every few months. But it should become out of date, or your business will be....well, out of date.

This completes the core of our model. Now, we have the extended marketing mix elements, which is how you live your value proposition.

The Seven Elements for Value Propositions

There are seven elements here that all need to work in harmony. Otherwise, you won't be operating to your potential.

Product relates to the goods and services that you provide. It needs to deliver problem-solving and goal attaining benefits consistently with your value proposition, core competencies, and needs and wants of the buyer persona. This is why we look outside-in.

Price is next and follows the same outward-in approach. The key here is to think of all the costs associated with your goods and services, including non-monetary costs.

Promotion is better classified as communication. It is about how you communicate value in all mediums.

Place refers to how the buyer persona gets the problem-solving benefits. Where do they have to go (physically or virtually), what are the distribution channels? These are the important elements you need to design for.

People refers to your team. Have you got the right team with the appropriate skills and experiences to deliver value?

Processes relates to how you do what you do. I said before it should not be the focus of your marketing. The better and more accurate definition is that it should not focus on your 'Promotion'; it is what you do behind the scenes to deliver value, and like all 7 elements, it plays a vital role in living your value proposition.

Physical Evidence is our final component and helps us answer the question; why you? You need to provide cues and social proof that give the buyer persona confidence in you.

So, this is what the Extended Marketing Mix Compass™ looks like in its completed state.

As I said, this is a very quick overview as we could spend hours on this, and in fact, I do. We have an entire module of the Marketing Compass Accelerator program, which breaks down what to do and how to do it because so many businesses get it wrong.

You Already Have One

The key takeaway for you is this: you already have an Extended Marketing Mix Compass™ in place, even if you didn't know about this model. So, you're not creating one; instead, you are refining what you already have.

In keeping with the compass analogy, let me ask you another question...

Is your Extended Marketing Mix Compass calibrated? Is it going to take you where you want to go?

If the answer is no, I suggest you see the full Marketing Compass Strategy in action and use the models and workbooks we provide to audit your current marketing performance.

You can do so in my online marketing workshop, The Winning Marketing Plan.