Tuesday, January 4, 2011

Five Steps to Defining and Delivering Your Unique Value Proposition

In today’s increasingly competitive business landscape, it is vitally important to develop a clear statement of the tangible results a customer gets from using your products or services. This, in a nutshell, is your ‘value proposition’. Developing a powerful and tangible value proposition will set you apart from the competition and entice your prospects to investigate your products and services. The ability of your company to back up the value proposition will be critical since a value proposition, for all effects and purposes, is a promise that you make to your customers.

The number one response you don’t want prospects to ask, or even think, after hearing your value proposition is, ‘so what?’ Strong value propositions deliver tangible results.

Examples of weak propositions:

It’s the most technologically advanced system on the market. So what??

We offer training classes in a wide variety of areas. So what??

Example of strong proposition:

We have been in business since 1960. What that means to you is we are dependable and our money-back guarantee has been a solid commitment to our customers for over 40 years.

Your value proposition should be something that can be incorporated into your elevator speech, i.e. a short but interesting and focused description of the work you do and the solutions you provide. It should last no more than 30 seconds (the length of an elevator ride).

Example of a value proposition incorporated into an elevator speech:

My name is Jane Smith. I am a consultant with …., where I have helped over 30 small biotech companies form business partnerships with universities and research labs in 20 states.

How can you develop your own value proposition?

1) Describe what your business provides in terms of tangible business results to clients.

2) If you can easily ask the question, ‘so what?', when you read the description you have created in 1) above, then you are probably describing a feature (characteristic) rather than a benefit (takes away your client’s ‘pain’). Talk to your existing customers to find out what value you bring to them.

3) Use enthusiasm to improve the persuasive power of your value proposition. This may take some practice but will become easier if your value proposition focuses on customer needs.

4) Never assume that your prospect knows even the most obvious features and benefits about your company.

5) As your company grows, your value proposition may become diluted. Do not lose track of the fact that the value proposition is all about meeting your customer’s needs and taking away their pain.

Here is an example of a strong value statement:

‘ XYZ Corporation is the exclusive provider of patent-pending project management software for paving contractors, saving U.S. contractors over $34M in 2005.’

Keeping these guidelines in mind will help you create a Unique Value Proposition (UVP) for a new business or ‘discover’ one for an existing business. Remember to keep it clear, concise and emphasize benefits and solutions for your customers!

This article was written by Susan J. Hoosier, a SBDC Certified Business Advisor with the Longview Small Business Development Center, which is part of the 24 statewide offices of the Washington Small Business Development Center (WSBDC) network. The WSBDC offer in-depth, confidential, and no-cost management advice to businesses within Washington State. To locate your local SBDC advisor please visit the SBDC web site www.wsbdc or if you or your business is close to the Longview WSBDC office you can contact Susan Hoosier at shoosier@wsu.edu or 360-442-2946.

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