09 Feb Finding Your Business’s Value Proposition
Your value proposition is the very first thing you want to cover when filling out your Business Model Canvas. Your value proposition is both what the target customer hears and feels and what you rally your team to deliver–it is what the customer perceives that you offer them.
The basic questions for finding your value proposition are these: What value do we deliver? What problems do we address? What product/service is the vehicle of our value? But in order to come up with a strong value proposition, you need to be thinking in terms of: What am I offering to the customer that is either different or better than the competition?
Apple is a great example of a company that focuses on competition. Back when they were called MacIntosh Computers, Steve Jobs differentiated Apple from PC by making his computers excel in the area of publishing. Do you remember the Apple ads of “I’m an Apple” and “I’m a PC”? It’s all about differentiation. Apple does a wonderful job of communicating their value.
A big mistake I often see is when entrepreneurs either don’t know who their main competitor is or what their differentiation is. To define my value proposition, I want to know my top 3-5 competitors and what their markets are like. What customer segment are they missing? Can I reach them? Understand what makes your business different. What is the customer going to get? The best cup of direct trade coffee? The newest phone on the market? Pies with half the calories so you will be slimmer?
I often see new entrepreneurs shooting themselves in the foot by overpricing their services. And that’s not important at the beginning. Your first goal is to get customers, which you do with a strong value proposition. And frankly price is a great way to separate yourself from your competitors at first (although you need to pair it with another element). Look through the following list to find some ideas for your differentiation.
Here is your strongest ally. This sentence will help you not miss any elephants in the room when coming up with your value propositions. This is just one approach, but it’s killer. Fill in the blanks below with your partner or team to determine what your value proposition(s) is.
We provide <product or service> to <target customer segment.> Unlike <next best competitor,> we offer <measurable differentiation/benefits/experiences> at <Cost or price.>
If you work through this sentence you are going to have a strong value proposition.
What is the value proposition for your business? Get started with the sentence above and the questions below!
◦ Who are “We?”
◦ Who is the Customer?
◦ What is the Product/Service?
◦ Who is the Next Best Competitor?
◦ What is our Differentiation?
◦ What is the Price? Cost?
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