Understanding Value Proposition
In business, a product or service is offered to consumers for a market price, but what makes them buy one product over another? The answer is— value proposition.
Most companies don’t know their value proposition, much less use it effectively to market their goods. So let’s delve deeper to understand better how this helpful tool will help your Central Alberta business.
What is Value Proposition?
A value proposition is why a shopper purchases from you over the competition. Simply put, the unique factors of brand identity, perceived value, and need fulfillment set you apart from competitors and make people buy from you— that is your value proposition.
To arrive at your value proposition, it will take market research into your customer’s needs and desires, where they currently shop, and why. It includes how well your competitors meet those same needs and what they charge. How you maneuver to be competitive while being more effective is where you achieve perceived value.
Why is Value Proposition Important?
As you complete market research, you quickly identify how your goods differ—hopefully for the better—and what your customers are looking for and their needs. Once you know this, you have better ammunition to market to them.
In short, when you understand your ideal customer’s who, what, where, when, and why, you can direct your marketing efforts to answer those questions effectively. That means you will spend less on wasted efforts and gain more sales from the right people.
In addition, your value proposition will be a primary element of your business plan. By documenting your research findings and showing how you stand out in the marketplace, lending institutions, investors, and grant providers can determine the strength of your company.
What Information is in a Value Proposition? When stating your value proposition, you need to include the following information:
The problem your product/Service solves
How your Product/Service benefits or solves the problem
The distinct advantages of using your product/service over someone else’s
If done correctly, the customer’s perceived value of your offering makes it an irrefutable solution to their need/want, and you can set your price. Though a word of warning, your market research should also include the current market asking price so you can adjust with a strategy in mind.
How is My Value Proposition Used?
Your value proposition is the driving force behind every communication you have with your customers. Therefore, every marketing tool, such as your website, pamphlet, email, product label, advertisement, signage, and social media post, speaks to your unique selling proposition.
Believe it or not, professional copywriters use value propositions to write compelling copy in as few words as possible. Conciseness is the key. In as few words as possible, the better you deliver your message, the more successful your marketing will be.
If you are using the services of a professional marketing agency, having your value proposition ahead of time will help them nail your messaging and even help you identify untapped opportunities.
Developing Your Business in Central Alberta
With so many moving parts to operating a business, you may need help creating your business plan and strategy— including your value proposition. It can be overwhelming and frustrating when you want to shoot straight out of the gate with your idea.
New and existing Central Alberta businesses can turn to CARIN (Central Alberta Regional Innovation Network). Together with provincial and federal partners, they provide essential information, mentoring, and connections to help take your business ideas from seedling to full-scale operations. Furthermore, innovators have access to their Catalyst Incubator program, walking them step-by-step through the idea development process.
For more information or to register for the next Catalyst Incubator session, contact the CARIN office online today!