In a recent post I talked about ways in which I tried making money as a kid and gave some examples of how I would still use the same tactics today. There were some great comments about different things that people are doing, in particular different value proposition examples. As many of the people that read this blog are interested in making extra money I figured I’d take this a step further and see what it takes to create value, make sales and influence people about a product or service.
A Value Proposition Example
So that we are all on the same page, it might be good to start with a value proposition definition, here is one from Wikipedia:
A value proposition is a promise of value to be delivered and a belief from the customer of value that will be experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services.
So people want value, but what does that mean? The good news is that it can mean different things to different people. The bad news is that it can mean different things to different people!
In my last job I was a Marketing and Sales Manager for a company that sold products to farmers. It was pretty interesting work, but trying to establish a value proposition for new products was often difficult. My customers wanted products that lasted forever, but they didn’t want to pay a lot for them. There are ways and means to combat this and I had the benefit of working for an established company, but if you are developing your first offering it is best to get your value proposition right from the beginning.
Developing Your Value Proposition
I spend a rather large amount of time thinking about my value proposition every time I write a post for this site. If you are going to take the time to read it, I want to deliver the best I have to offer and make it useful. I want anyone that reads an article to go away with something to think about, investigate or action. That is what I’m offering here, in return I hope that people visiting will respond by doing something that helps themselves (oh, and maybe tweeting or liking my post as well).
The key to a good value proposition is the way you help people do what you want them to do. You could have the very best product or service in the world, but if it is difficult to understand why it is better, or if it is hard to access then the perceived value is greatly reduced.
Whatever your product or service is, the best way to develop your value proposition is to decide what it is you want people to do, then help them do it.
Who is Your Target Audience?
I’ve been to countless presentations, read tons of books and researched online until I couldn’t see straight and everyone says the same thing; know your target audience. It isn’t enough to have a vague idea like “people in debt” because that isn’t targeted enough. You need to be able to describe your audience; their age, sex, income, location, profession in as much detail as you can. In fact when you close your eyes, you should be able to see the exact person that you want to sell your product or service to. You need to understand this person, they will buy your product or service.
What Does Your Audience Value The Most?
People want value, but value is variable depending on your audience. Some people just want cheap, others want quality or service and at the high end people want uniqueness. Your job is to discover what you audience wants, but then give them what they need. If they want a quality product at a bargain price, then ultimately they really only want one of the two. Find out what that is and you will understand their value proposition.
I was reading an awesome article (seriously go read it) at the Financial Blogger the other day about a guy named Martin that put a ton of effort into creating an eBook which subsequently went nowhere. I think he did a lot of things right, but I don’t think he had the right value proposition. If you read the post, I’d be interested to hear your thoughts in the comments below.
How Do You Deliver Your Product or Service?
The delivery of your product or service is really important, it needs to be so easy that people have no problem finding and paying for it. If you only offer one way to pay, then you are limiting your potential customer base. If the only way to get it is to pick it up in person, then you limit yourself further.
I’m seriously addicted to watching stuff on eBay. I don’t buy a lot, but I love to see what happens when sellers apply different wording, buying or delivery methods to a similar product. The results are pretty interesting, but more often than not the people that make it the easiest for people to buy from them end up getting the best sell price. Do a bit of eBay stalking yourself and see what you think.
Why is it Better?
In my article about finding ways to earn more John from the Money Principle commented on the importance of stickiness, which is really important for repeat customers. If what you offer is absolutely unique, then it may not be too difficult to get people coming back, but unique can be hard to produce. More often than not you are improving on something that already exists, so your job is to convince people that it actually is better.
The key to positioning your product is to market the benefits, not the features. You need to show your target audience they way it will help them in a way that they will understand. If you are selling a service, then the principle is the same, market the solution that you are offering to them, not the skills you have. This is generally where people come undone.
How Will You Convince and Reassure People?
This is a huge topic in the online marketing industry. How do you get a complete stranger that has never met you to buy your product or pay attention to your recommendation? Often it comes down to social proof.
Would you buy something from someone you didn’t know if they came recommended by someone you did? The chances are you would be a lot more comfortable with that recommendation. Companies spent a lot of money on endorsements from famous people for this very reason. You don’t have to spend a ton of money, but you do have to find a way to make customers comfortable about buying from you. My friend the Blog Tyrant wrote a great article about Blue Shirt Trust, go check it out to see how you can increase your own conversions.
Now you have my value proposition examples, I want to hear yours. What makes you want to buy one product or service over another?
Image by purplbutrfly