I spend a lot of time with founders of early-stage business and one area they often fail to develop is their value proposition. I’ll also add that many later stage businesses also fail to deliver a pitch based on a decent value proposition too!
What is a value proposition?
A Value Proposition is a simple way to communicate what you do, who you do it for and what makes you special.
When you get your value proposition right, you’ll make your life so much easier as you won’t have to explain it in more than one breath. ‘Suspects’ will be filtered out from your pre-lead pipeline and prospects will relate to what you do.
When you get it wrong you will just confused people and lose their interest.
You may need more than one
Remember, you may have more than one customer type and therefore need to have more than one value proposition, which will be used in different places. For example, Amazon’s value proposition to consumers is completely different to the value proposition they deliver to sellers.
Why create a Value Proposition?
Your value proposition is a vital communication tool that is used by everyone inside and outside the business.
Why outside the business? All businesses, but especially startup businesses rely on recommendations and introductions into prospective customers, partners and investors. A clear and simple value proposition is an easy way for other people to remember what you do and why that is applicable to the person they want to introduce you to.
You don’t have much time to get the attention of your audience! The world is a busy place and even if people have time, you still need to communicate what you and for whom, as quickly as possible
How to create your value proposition
In order to create a value proposition, you have to understand your stakeholder and critically think like them. This is not easy!
You will also need to iterate your value proposition, while you develop your business, especially in the early days, but also as you grow and evolve your offering.
This is one template that can be a useful starting point. I took it from this excellent blog on the subject:
[Company/Product] is a [adjective]+[short description (should include your primary term)] built for [target market]. With [Company/Product], [target market] can [job your company/product does] + [core differentiator]
Make sure you keep the language simple and don’t use technical jargon. Even if your audience understands the technical terms, you want them to be able to digest what you’ve written as quickly as possible.
I like to keep things a simple and brief as possible, so you can reduce the size of your value proposition to take into account your product/service and customer.
There are a whole bunch of value proposition templates out there, but I like this one as it covers all the bases.
My name is Duncan Knight, I help founders of early-stage tech businesses execute their growth strategies. I share my 15 years experience from starting 2 tech companies, to help founders grow quicker and prevent them making the same mistakes I did.
Take that bad boy for a test drive
Test everything you create.
Ask your friends and family for feedback. Ask prospective customers! After all, they are going to spend money on your product or service.
Come back to your value proposition later and review what you’ve written. A whiteboard session is only as good as that moment in time. You’ll always find better ways of describing what you do. You can ask prospects during your first meeting! People love to give their opinion.
It is critical to get your value proposition as accurate as possible, based on your current position as it’s your opener to everyone.
I haven’t added examples of value propositions as I find they sometimes skew how people think of their own. This will make you really think about how your value proposition is crafted.
Now it’s your turn
Get out your notepad or whiteboard with your team and see what you can create.
Don’t get stressed about it not being perfect the first time. It’s all work in progress.