So, what is value proposition within the startup climate? Essentially, it’s what tells outsiders what’s good about the products or services that the startup provides. It’s a way to differentiate your startup from the competition, outlining what’s unique about the startup, why it exists, how it offers value to customers, and how it differs from what’s already available.
You might have a strong sense of the merits of your startup, but if you’re going to grow, then you’ll also need to convince potential customers and investors that your startup provides value, too. This is where your value proposition comes into play.
In this post, we’ll answer the question ‘What does value proposition mean in business?’ and outline some tips on how to write a value proposition that gets the right kind of attention.
1. Why Value Proposition Matters
Your value proposition communicates to customers and investors what’s special about your startup. A strong value proposition can provide a launchpad for success, one that attracts interest, informs marketing strategies, builds trust, and makes the startup stand out from the crowd. It’s not an exaggeration to say that it can have a huge impact on the overall success of a startup, so it’s essential to know how to create a value proposition statement.
Some of the key advantages of putting together a good value proposition statement include:
Helping to better understand your target audience.
Enhancing brand awareness.
Increasing the likelihood of potential customers making a purchase.
Gaining a competitive edge over competitors.
2. Defining Your Value Proposition
Each value proposition should be unique to the startup, but the process of defining the value proposition will be broadly similar for each entity. It’s best to get the process of defining your value proposition underway as early as possible since it will help to guide many of the strategic decisions you have to make pre-, during, and post-launch.
We’ll run through a more thorough guide on what to include in your value proposition below, but in essence, the statement should tell the world — including the startup’s employees — what’s good about the startup, including the problem it solves, how it does it, and how it’s better or different than what’s already available. If you can’t define those factors succinctly, then winning over investors and customers will be a challenge.
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3. Crafting an Effective Value Proposition
Figuring out how to write a value proposition statement can seem difficult, but it doesn’t have to be. Mostly it comes down to outlining some key information and details before you begin the writing process. Once you’ve established the main elements, the writing process will be fairly straightforward. Let’s take a look at some key areas to focus on, always keep in mind that the answer to ‘What is the purpose of a value proposition’ is that it should communicate what’s special about your startup.
Steps to take include:
Identify your target audience, including who they are, the problems they need to solve, and what they look for in a product/service.
Pinpoint the value of your product/service: what problem does it help solve, and how?
Promote your unique selling proposition (USP): what sets your product/service apart from your competitors? What features or qualities does it possess that you don’t tend to see elsewhere?
Get precise about the benefits: What will customers gain by using your product/service? Is that a statistic you can use to back up your claim? (For example: ‘proven to eliminate/reduce X within Y weeks’.)
4. Key Elements of a Successful Value Proposition
Above all, a good value proposition statement will simply and succinctly communicate the virtues of the startup. It should be easy to understand, attention-grabbing, and concise — it should simply outline what customers or investors need to know about the startup’s products/services, and nothing more.
It’s easy to complicate the process of writing a value proposition. If you find that you’re getting tangled up in complex explanations, then spend more time clearly defining the content of your value proposition and then return to the writing process.
5. Testing and Refining Your Value Proposition
Getting the right value proposition statement for your startup is a process that involves numerous steps. Once you’ve got your first draft of your value proposition statement, it’ll be time to put it to the test and make adjustments based on feedback.
You can do this by getting feedback from early readers of the statement. If they are unable to understand what your startup does and how the goods/services will help them, then you’ll need to make some edits. You may need to produce multiple versions of your value proposition statement before landing on the one that drives your startup forward.
6. Communicating Your Value Proposition
There’s more than one way to communicate a message. In your value proposition statement, it’s best to focus on making things as simple to understand as possible. This can be difficult if you operate in a technical or complex industry, but you can make things easier by using simple, direct language that focuses on the benefits of your goods/services, not the features. Ultimately, you’re just trying to show how your product/service will make the customer’s life better.
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7. Differentiating Your Value Proposition
You’ll have many competitors. Your value proposition is there, in part, to explain to your audience how your startup differs from what’s already available. Your offering may be more effective, more eco-friendly, cheaper, or easier to use. Whatever it is, ensure it’s included in your value proposition statement.
8. Leveraging Your Value Proposition for Success
Done correctly, your value proposition will provide a solid blueprint for long-term success. You can use it to shape a variety of business operations, including your marketing, branding, and pricing. Once you’ve clearly defined your startup’s value proposition, put it to work. For example, you may use your value proposition during negotiations, outlining how your product/service offers an exceptional ROI or helps clients save money. Your value proposition may also be present in all of your marketing efforts, for example, by including your value position in your advertisements (think of Nike’s Just Do It, which appears on all of the brand’s marketing materials.
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