5 Tips for Writing a Well-Crafted Value Proposition
A value proposition is how a business intends on delivering and creating value for their customers. The value proposition must be a concise statement that explains how your product/service solves your customer’s problems and improves their lives as well as how your product differs from competitors. Below is a list of 5 pro-tips to help ensure that your business has a well-crafted value proposition.
- Determine problem-solution fit
The first step in writing a value proposition is ensuring that you understand your product like ‘the back of your hand’. Although this may seem obvious, many entrepreneurs fall short in not having an absolute understanding of their product or their customers. It is critical to determine problem-solution fit in that the set of value proposition benefits that you design to attract customers must FIT with the set of customer segment characteristics that you assume, observe and verify in the market. In order to do this, you must understand your customer pains and gains and how your product/service acts as a gain creator and pain reliever. People do not want a list of features; they want to know how your product will make their lives better. Tell them what is in it for them. The best way to determine this is to fill in a value proposition canvas.
- Strip it down to the basics.
Write your first value proposition in terms that a 10 year old can understand. If you have the opportunity, literally approach a child and explain your idea to them. If they do not understand, re-evaluate your value proposition. Industry jargon is unnecessary when writing a unique value proposition. Always write in a clear and concise manner, communicating your ideas simply. Use this as a skeleton for your final refined value proposition. Only then should you start to add more complex wording and concepts to your value proposition statement. Ultimately, a customer should be able to read and understand your core value proposition between 5-10 seconds.
- 5 drivers of the core value proposition.
When writing a value proposition you must understand what the key objectives are of a value proposition. The drivers of the core value proposition are good tools to ensure that you are checking off all of the essential elements of a compelling value proposition.
B – Benefit: What is the benefit to your customer?
O-Outcome: (Reward): What are the net results for the company?
P – Perception: How do you want to be perceived by your customer, the public, or other stakeholder?
I – Idea: What does your product do for the customer?
T – Target: How can you segment the various groups? How do you reach them?
- Beware the curse of knowledge
A common issue that entrepreneurs face both within their value proposition and during a pitch to investors is the curse of knowledge. This is less an issue of understanding, and more so an issue of clarity. When an entrepreneur is so entrenched in their idea, it can be difficult to imagine what it would be like to hear about it for the first time. Having worked on one’s business for so long, one knows all of the ins and outs of the product/service to the point that there can be some difficulty in communicating one’s product/service to those who are not as familiar with it. Sometimes even the most critical details are not thought out! For example, this past year I was a semi-finalist in a competition by which students had to develop a new venture from scratch and pitch the idea to hypothetical investors. My idea was a 3-in-1-dishware product. The only negative feedback that my group received is that we should have considered selling the product in sets instead of individually. Of course this is a legitimate criticism and we had not considered it to be crucial to clarify whether it was an individual or set purchase. Having worked on the project for 9 months, this seemed obvious to us, but the slight oversight cost us moving onto the final round of the competition. The best way to combat this is to pitch to friends and family prior to approaching an investor to ensure that you have a solid value proposition.
- Click on the article blow for 10 templates that will help you to construct your value proposition:
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