Creating Your Value Proposition

Defining your value proposition is the first step in clearly identifying how your products and/or services are different from the competition.

If you can't define some unique feature or benefit that makes you stand out, your customers may default to the only other option - price. And believe me, you don't want to be forced to play the low price game - even when you win, you lose.

What Makes You Different?

You might already have something that makes you stand apart but if not, then it's time to discover, define and if necessary, create a value proposition from scratch. Be prepared to alter some of your products or services in order to support your vision for standing out.

The first step in creating a unique value proposition is to find out what your competitors do well and then find a way to either do it better, or offer a guarantee that puts you on a completely different level.

Here are a few ways you can get a handle on your competition.

1. Buy from them. I know this might be a bit painful, putting money in your competitor's pocket but this is one of the best ways to determine how well they perform from start to finish. So, if they sell items on their website, go on and actually make a purchase. Call their Customer Service and ask a few questions. Do you get the information you need in an efficient manner? Was it easy to find the product you wanted? Was the checkout process easy? Did you get an email confirmation right away? Did the product ship quickly? Did the company follow up with any additional marketing?

Making a real-world purchase from your competition can teach you quite a bit about what they do well and what they can improve upon. It can also give you some ideas for serving your customers better.

2. Sign up for their newsletter. Many companies have a regular newsletter they send out to clients via email. Find the competitors that do this and sign up for it. What types of information are they providing to their customers? Are they offering real value in their newsletter or are they simply pushing their products?

By studying your competition's newsletters, you can uncover ways to position your own products and services and to make them unique.

3. Request their brochures and catalogs. Request your competitor's catalogs and brochures. Study them to find ways you can add value to them. Does your competitor offer a full year warranty? See if it makes sense for you to offer a 2-year warranty. You discover your competitor offers a 90-day money-back guarantee? Offer a double money-back guarantee.

The bottom line is to research and find out ways to differentiate yourself from the competition.

After you have spent some time studying your competition, create a spreadsheet that compares what you do well with what each of your competitors do well. While you should find some overlap, there will most likely be some areas where you already provide unique value or could alter a few things in order provide something unique.

Ideas for Making Your Company Unique

One great way I recommend to differentiate your company is to package goods and services together in a new way. Try combining similar products with an extended service option at no charge. If you're just a service provider, see if you can package complimentary services together at a compelling price. Try creating "good," "better," & "best" packages, ensuring each one has a gripping name that you can advertise in print and on your website.

Of course, don't think for a minute that the only unique offering you can bring to the table is a service or hard good. You can certainly provide a unique value by simply creating trust. Find a way to show your customers how valuable you are. Vow to return customer calls within 60 minutes. There are many ways to stand out from the crowd that don't rely on a particular product or service offering. Think about it and be creative!

If you just can't seem to find or create something that makes you stand apart, then it's time to get a little help. Start calling your customers and asking them why they have purchased from you. I guarantee you will learn something valuable from this little exercise.

Make sure they understand you have no interest in selling to them. Just say you have a few questions that will help give them better service in the future. Try to obtain at least 10 responses and ask some of the following questions.

What was it about us that made you purchase our product?
What else could we do to provide value to you?
What's the biggest frustration in purchasing the types of products or services you require?
What have we done that others haven't?
If you could change one thing about our company, what would it be?

In general, you'll find customers are very responsive once they understand you have their best interests in mind.

Put It Down on Paper

Now that you have defined a way (or ways) to differentiate your business and to add value to your customer's issues, it's time to put it down on paper.

Everyone that is a part of your business should know the corporate value proposition. I was once involved with a company that printed small cards with their value proposition and had them taped to everyone's computer. How can your employees work to support the value proposition if they don't know what it is?

Another thing to keep in mind is the differentiation between your corporate mission statement and your value proposition. Your mission statement gives the reasons WHY you are in business whereas your value proposition concentrates on the unique value you bring to clients.

Once you have an understanding of the unique value you bring to your target markets, you must ensure that this value is communicated in all your various marketing channels. It might seem basic, but creating and communicating your value proposition is the foundation upon which your entire marketing program rests. Don't ignore it!