You can have the very best business idea ever but, without a compelling value proposition, it might never get off the ground. Why? Because your value proposition is what lets your audience know why they should buy from you and you alone. It’s your power play, your ace card, or, to use marketing lingo, your USP.
A value proposition is officially described as “a positioning statement that explains what benefit you provide to whom and how you do it uniquely well.”
A winning value proposition will capture the essence of your business in one short paragraph. Think Uber: Tap the app, get a ride. Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And the payment is completely cashless.
Not only is this value proposition simple and easy to understand, it actually names all the things that people don’t like about the competition – never being able to find a cab, drivers getting lost, not having cash on you when you need it most – and turns them into Uber’s USP. These are the pain points that Uber has set out to resolve. In this case, they are also the benefits customers can expect and the reason we should all flock to Uber and ignore any other taxi companies that might want our business.
How will your value proposition generate revenue?
At Streamlion Consulting, we work almost exclusively with start-up or scale-up businesses. We, therefore, spend a lot of time discussing the merits of, and the added value brought by a new or growing business idea. It’s this time and energy which many entrepreneurs cut out of the process. In their enthusiasm to start trading, they fail to get a clear enough understanding of the problem they are trying to solve or how their business is different from the next.
And, to answer the question about revenue, the very first thing a compelling value proposition will do is get you access to funding and investment.
Essentially, a strong value proposition will contain a little marketing messaging, some operational information and an idea of strategy. By bringing so many messages to the market, it will be highly effective at convincing buyers and decision-makers that they should be doing business with you. And, once this process is underway, revenue is an inevitability.
To work really well, your value proposition also needs to be succinct, specific and service-focused. In some ways, it represents the very start of your customer experience.
How does a value proposition work?
In a nutshell, a good value proposition will provide the differentiator between your business and your competition.
Renowned businessman and investor, Warren Buffett, refers to them as an ‘economic moat’. This is a great visualisation: the presence of a powerful value proposition will help fend off competition and protect your market dominance.
What are Streamlion’s top tips on creating a convincing value proposition?
Defining your business in a clear and succinct way is a skill. As business owners or entrepreneurs with a great idea, it can be easy to get bogged down in detail, to focus too much on the infinite moving parts that make our business so amazing. But we don’t need this level of detail in order to engage our audience. Quite the opposite, in fact.
Our first Top Tip is to start with a group brainstorming session. You need to get as much information as you can out of people’s heads and into a mind map or something visual. This needs to include what problem you are solving and why you believe you are different. You can either do this with a team from within the organisation or together with an impartial third party.
The key to driving value from these discussions is to continually revisit the purpose of your business and question what problem it solves. You can also go on to discuss whether that problem needs solving and why.
Once you’ve brainstormed everything, and discounted anything that is irrelevant, not convincing or too complex, you should be left with the building blocks of your value proposition.
Our second Top Tip is to keep it simple. Don’t try to complicate or obfuscate. There are no points for big words here. Simply try to write down your purpose. Forbes.com have a great breakdown of a typical value proposition template:
For (target customers)
- Who are dissatisfied with (the current alternative)
- Our product is (new product)
- That provides (key problem-solving capability)
- Unlike (the product alternative)
As with any marketing material, authenticity and building trust with our audience is key to success. This leads nicely to our third and final Top Tip, which is to always have proof. You should be able to back up your claims with customer reviews or testimonials, or independent research and polls. You may well believe that you are ‘the best’ or ‘market-leading’ but if you can’t back that up, you will pay the ultimate price for breaking the trust of your audience.
There are lots of tips around on how to survive today’s somewhat dystopian circumstances. For businesses of any size, the focus must be on managing cash carefully, looking after people and understanding how the restrictions affect trading.
But, where there’s crisis, there’s opportunity (to quote Einstein) and for many businesses, this peculiar event could be their making. Here are my top tips to find the opportunities that exist for you.
1. Authenticity and vulnerability are not just buzz words
Honesty is the best policy, so the saying goes. These days though, it’s about so much more than telling the truth. Trust of official bodies, including brands, is at an all time low and many more of our interactions happen on digital pathways than face to face.
Social media gets a lot of criticism for presenting a falsely positive reality but there have been some very honest and extremely vulnerable posts recently which have attracted massive engagement. Showing vulnerability is key to gaining the trust of others and doing so can be very powerful for you as well as your audience. Don’t be afraid to say the bottom has fallen out of your pipeline. Perhaps you’re using all your new-found free time to help others. Why not share this and keep those genuine conversations going. Lots of your contacts will be in the same position and will appreciate your candour.
2. Build goodwill among existing clients
Here’s a novel idea: why not pick up the phone to your clients for a chat? Everyone will be feeling cut off and many are likely to have a little more time to talk than usual. Showing concern by having a chat could be a valuable way of nurturing the relationship and they might be thinking you’re either flat out or closed. You can let them know what you’re able to do or how you can help.
The way in which you show up now, as a supplier or service provider will set a standard by which people will judge your business in the future. It’s an excellent opportunity to really delight your existing customers. Think about all the touchpoints you have with them (which will have changed given current restrictions). Make sure any that have disappeared are replaced with an alternative and look at what you can offer to your clients which may help or support with the challenges they may be facing.
3. Pivot your business if you can
There’s lots of new coverage of our larger manufacturers tweaking their production lines to help with the shortages of ventilators and hand sanitiser. It’s also possible for smaller businesses to react to the crisis with new ways of working. Many of those who provide a service have been easily able to take this online with the help of Zoom or Skype and other businesses are keeping their audiences engaged with newsletters which help them to adapt to a limited way of life.
For those who’ve been left with nothing to fill their days, look for a contact who might have been left in the opposite situation. Some industries are busier than before – could they use your help and support? You could also turn to community. I know of an investor who is helping a café deliver veg boxes using wholesalers thus helping them stay afloat which is generating much needed cash for their cafés that are not allowed to open at the moment.
If there’s really nothing you can do differently, do make sure you communicate what you have done to your audience. This page on the PWC website shows they are responding to the crisis and puts them in a positive light as an organisation that cares about its people and is intent on doing the right thing.
4. Look after number one!
Paying attention to self-care is critical at times like this. No matter how resilient you are as a person, this type of experience will increase your stress levels. Make sure you set aside time to recharge and allow your mind to process everything that is happening. Your business is nothing if you are too stressed to run it and your people will thank you for being able to stay calm in the face of crisis and make the right decisions.
5. Develop your skills
If you’ve always shied away from giving webinars or showing up on social media through video, why not take this opportunity to improve your skills? Investigate what running a webinar involves. Can you pull your network together to share advice and ideas? As well as bringing the possibility to make a real difference to people, you will be generating useful content for your social media channels, letting people know you’re still there and willing to help.
6. Be ready for what comes next!
We’re not talking about further measures to stem the spread of COVID-19, but rather the point at which life can return to normal. We will get there eventually and, when we do, the businesses that have made good decisions and used their down time wisely will be the first out of the starting blocks. Being ready for this means maintaining your profile online with social media posts and having an up-to-date website, looking after your people so they want to continue working with you after the crisis and gearing yourself up for a potentially quick ramp-up in activity. Let’s face it the filing will probably still be the last thing on your list but it’s the perfect time to get this done too, physically and virtually. Get that CRM updated and be ready for the future when it gets here!
There’s no doubt about it, these are unusual times. But I want to leave you with a quote by John F Kennedy which provides food for thought in how we might get through to the other side:
“The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger–but recognize the opportunity.”
Here are some useful links with information about the virus and how it impacts small businesses and start-ups.
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