What Makes a Great Value Prop–and Why Your Company Needs One
Recently, I was honored to be a featured speaker at the Product Marketing Festival, a virtual conference held by the Product Marketing Alliance. In my session, I spoke about the importance of having a value proposition: why your company needs one, what it is, how to come up with one, and how a value prop should inform the rest of your company policy.
Watch the on-demand session now
In my forty-minute session, I shared our insights into creating and disseminating a value proposition, including:
- What is a value prop?
- What is not a value prop?
- What goes into creating a great value prop?
- How can my company get there?
- What can I do with my value prop?
- What does a killer value prop look like?
- How can I tell if my value prop holds up?
I also discussed and modeled how to use the value proposition template, a very useful guide to gathering the information needed for creating your own great value prop.
What is a value prop?
A value proposition is the promise or the benefit that your product is offering. Or, to quote Michaela Gubbels Botha, one of our partners here at Aventi Group: A value prop speaks to the job your product is being purchased to do. Or, in simpler language, the overarching promise or benefit for a product, service, or company.
Value props are business critical. They ensure everyone in your company is on the same page–and they make sure your marketing dollars are going to the right place. When your value prop is not well defined, your execution can become flawed, and you wind up spending money on efforts that are not making an impact on your bottom line.
Ideally, your value proposition becomes the foundation for your identity and your entire sales marketing plan. It can also provide a litmus test for any new endeavors, whether they are a product, a partner, or an alliance–every new addition has to reinforce your value prop in order to be viable.
What is not a value prop?
Only problem is, it’s very easy to confuse value props with other forms of messaging. A lot of times, when people write value props, it becomes more of a feature statement instead of a value statement.
So where does a value prop fit into your communications?
First, it is different from positioning, which is more about the position you want to occupy in the mind of the customer. A shortcut to that is category: what category are you in? Cybersecurity or SaaS? Storage? Those can all be similar in mind of the customer, but in the product marketing world, none of them are a value prop.
Next there’s audience-specific messaging. These days, marketers are very sophisticated, talking to specific customers or subgroups to communicate a company’s position. But still, messaging is not a value prop.
What about a tagline? Well, those tend to be short, catchy phrases or statements that are created from a selling viewpoint. Again, effective, but different than a value prop.
And finally, value props are different even from a mission statement. Mission statements are about your company’s purpose, the reason why you exist, not the value of a specific offering.
In fact, a value proposition is not intended to be used by your salespeople directly at all. It’s meant to be a starting point for all of your internal groups: designers, for example, who create a visual representation of your value prop; or marketers, who come up with target audiences based on your value prop. This also includes marcom, sales enablement, etc–these are the people who are going to be consumers of your value prop, not your customers. In other words, the value prop is a foundational piece for your other messaging across the board.
What goes into creating a great value prop?
To make a value proposition really rigorous, you need to talk to a lot of people and get a lot of information in order to drill down on where your pain points are and why they need to be addressed. Customer research is essential to this process–you can’t just rely on your product engineering side to talk about feature function, you need to know what’s actually happening on the ground. This is where your product marketing team really shines, as they are the ones who can help you understand the voice of your customers.
I also suggest interviewing salespeople and system engineers (SEs) to find out what’s working and what’s not–and you need to take a look at your competition. They’re out there making the most of their own value props, so competitive analysis is very important in order to understand what it is your audience wants to see.
And finally, use industry analysts and influencers who are watching your space to build credibility for your assertions. A lot of times it’s good to test your value prop with them confidentially before you finalize and recommend the value prop for approval. You want to take this thing to your sales teams with proof that it’s really going to hold water, and to have some concrete tests and metrics to back that up.
How can my company get there?
To start, use the value proposition template to gather all of the information I just mentioned. This template has been around for a while, but I like how it helps you break down each aspect of the client company’s offerings and objectives, including their target customers, pain points, competition, and what their desired outcome looks like. This process can take a while, but it’s worth it, because now you have a long form value prop.
Then, you distill the information contained in your long form value proposition down into three main buckets:
- Why? What is the problem we are trying to solve? Is it really worth trying to solve? Is it nice to have, or is it addressing a key pain point? This is where product marketing professionals really come into play, as they do the intensive market research and represent the voice of the customer you are trying to reach.
- Why now? What is the case for change, and what happens if it’s not acted upon? (This can include the status quo, by the way, because a lot of customers say they’re fine, they don’t need to change–so you can also address the consequences of inaction here. In other words, what if the customer doesn’t move forward? What’s at stake?)
- Why us? Why your company, your solution? Here you’ll need to make claims that are quantifiable, concrete, and backed up by actual metrics. This includes doing a ton of competitive analysis to find out exactly what the customers’ alternatives to your product or solution are–including, again, the option of doing nothing.
Once you’ve answered these 3 key questions, you then boil the answers down even further into one concise, compelling statement. That is your value prop.
What can I do with my value prop?
What you don’t want to do is to just throw this value proposition over the fence to each of your teams and say, “Here you go!” Once you have a value prop that’s been tested and approved, you then sit down with your marketing team, your sales team, etc, to explain the value prop to them and help them create messaging. Together you come up with a draft based on the value prop, then you review it, refine it, and then they can run with it.
This process can include the following:
- Copywriters: turn value prop into final copy
- Branding team: turn value prop into ad copy
- Digital marketers: turn value prop into campaigns
- Graphic designers: turn value prop into creative assets
- Marcom: turn value prop into consistent messaging across execution
- Sales enablement: turn value prop into sales tools and training
To translate a value proposition into successful messaging is not a one-time thing. It requires a consistent, cooperative process across multiple teams to ensure everyone is on the same page.
Example value prop
As an example of the above, I used one of our client companies here at Aventi Group named 4insite, who sells software to large organizations that have a lot of facility workers: plumbers, electricians, custodians, landscapers, etc. So the person we’re speaking to here is dealing with the following issues:
- Why: The current pain is that customer executives–VPs, managers, etc–are frustrated with using multiple disconnected manual processes and tools to manage their staff. With the pandemic ongoing, there are extra safety and compliance concerns, with unions making stronger demands on those fronts.
- Why us: You need a SaaS solution built specifically for frontline facility management staff.
- Why now: Because you’re losing customers! People are unhappy with quality issues, unclean or unsafe facility maintenance, and facility companies are choosing other competitors.
Distilling that down, the short version of 4insite’s value prop can be as follows: “4insite helps organizations connect, analyze, manage, and empower their frontline maintenance teams.”
An 8-point test for your value prop
One way to test your value prop, either in the short- or the long form, is to ask yourself the following questions:
- Is it speaking to a specific customer segment, or is it too generic to be useful? Don’t just say “all large industry,” for example–be sure to define the industry, the size of the target company, etc. What are some of their pain points?
- Is it customer focused? Is it all about you the vendor, or is it about the customer and their pain points?
- Will it resonate with the target customer? How do we know? Have you validated it using quantitative and qualitative surveys and data?
- Does it differentiate from competitors–including the status quo, where the pain point isn’t urgent enough and the customer can choose to do nothing?
- Is it believable?
- Is it emotional? Can the customer connect with it, or is it overly intellectual or technical?
- Is it using customer language, not jargon? Watch out for using a lot of acronyms here, and tailor the tone of your value prop based on your customers’ tone.
- Is it clear, compelling, and credible?
Create your own value prop
This may seem like a lot of information to condense down into one short sentence–and it is. But using the value proposition template can be very helpful, even just as a thought exercise to start putting together some of your thoughts and ideas around what you offer, why your customer needs it, and why they need it now. Remember, those are the three elements to a great value prop: why, why now, and why us.