Your Value Proposition is Not a Statement

Source: Services Marketing Blog

Mike Schultz defines value proposition as “the collection of reasons why a person or company benefits from buying something.” Too many firms think of a value proposition as a statement that captures the firm's value and differentiates it from the competition. But this approach can do more harm than good. Trying too hard to boil it down to a sentence or two can leave you with little substance.

A better approach is to think of a value proposition as a concept that explains the reasons people would want to buy from you. These reasons generally fall into three categories. Potential buyers must:

• Need what they're buying — it has to resonate with them,
• See why you stand out from the competition — you have to differentiate, and
• Believe you'll deliver — you have to substantiate.

These categories make up the three legs of the “Value Proposition Stool.” Remove one leg and the stool can't stand. Without resonance, people simply won't buy your services. Without differentiation, they'll pressure you on price or go elsewhere. Without substantiation, they won't risk doing business with you.

Short statements that sum up your firm's mission or value are fine. But your actual value proposition, Schultz explains, “is woven into the fabric of your firm and your relationships with clients, and then communicated through the collection of messages you bring to the market.”

For the complete blog entry, click here.

From Services Marketing Blog, by Mike Schultz, Wellesley Hills Group, www.servicesmarketingblog.com, September 30, 2009, “Three Keys to Creating an Extraordinary Value Proposition.”