CATHERINE
HEATH | MAY 22, 2019
Understanding is often based on perspective. You know your
company offers customers unique, valuable, and special services or products
because you’re on the inside. The question you need to ask yourself is: Do
potential customers know what I know?
If the answer is no, don’t worry. That’s why we need value
propositions. They help us to achieve clarity around our brand, enabling us to
craft messages that can speak to customers in the language that makes sense to
them. A value proposition is all about being customer-focused and putting
yourself in their shoes.
What is a value proposition?
A value proposition is a statement about the benefits
customers receive from your service or the problems that your product will
solve for them better than anyone else. Value propositions are used by every
part of your business to help you communicate the value of your product,
service, or overall business to your customers effectively. There are several
key dimensions to include a value proposition, including:
- Relevancy — why should
your customers care?
- Quantified value — how does this benefit your
customers?
- Unique Selling Proposition (USP) — how is this
offering different to the competition?
Value propositions should be based on your customer’s
perspective, even though it can be tempting to focus on outdoing your
competition. Yet according to McKinsey, “In many cases, the customer — not the
competition — is the key to a company’s prospects.” It’s a
matter of focus. Looking at your competitors might define your competitive
advantage — i.e., what do you do better than them? But looking at your
customers defines value. The brands that can create and demonstrate value
consistently are in a stronger position than those who compete on price point,
or brand awareness, alone. Instead of simply
racing towards the lowest price, you can confidently speak to the specific
needs of your customer.
How to write a value proposition
Developing a value proposition requires awareness of a range
of factors, including:
- Customer feedback
- Industry, market, and
competition
- Company mission and values
- Product features and benefits,
along with Unique Selling Proposition
In a past article, we’ve detailed how you can write a value proposition for your
business from start to finish. You can also use a value proposition canvas to help
you map out the essential elements of your value proposition. Here’s an example
from digital strategist Peter Thomson:
Once you’ve filled out your value proposition canvas, you
can move on to using a value proposition template to actually write your value
propositions.
There are many examples out there, but entrepreneur Steve
Blank has come up with a simple one he calls the XYZ value proposition template:
We help [X] to [Y] by [Z].
Take this template and come up with your own creative
statements. Replace X, Y, and Z with answers relating to your own product,
service or brand.
Value proposition examples
Your value propositions are the foundation for consistency
in your business’s activities. Understanding the exact value customers get from
your business is key to branding exercises, copywriting, product development
and sales enablement. Along with being used in internal decision-making
processes, your main value proposition is usually displayed boldly on your
website, for example, and other customer touchpoints.
Let’s look at some of these outputs in the following
examples, to demonstrate and deconstruct four value propositions from
well-known brands that clearly speak to their USP.
1. Slack: Where work happens
Slack is
a collaboration tool for teams. Slack’s value proposition is that they
make users more productive with an easy and simple collaboration platform that
is also fun to use. From the product to customer service interactions to their
marketing material, everything Slack does revolves around fulfilling the
promises their value proposition makes.
Take, for example, Slack’s first ad campaign. It’s fun, but it
also quantifies the value companies see when they start using Slack — 25% fewer
meetings? Sign me up. Instead of merely claiming to improve productivity, the
ad provides a clear example of what “improved productivity” looks like … and
what it feels like.
This value proposition stands out because of the industry
Slack operates in. Team communication tools are well-known for being a little,
well, dull. They’ve often been a necessary but painful ordeal, with
employees struggling to collaborate effectively, despite using multitudes of
different tools. Everyone feels the pain of collaborating over email with back
and forth chains that seem to drain hours from your day.
No tool — until Slack — has been able to provide a powerful
and enjoyable collaboration experience. Slack is now a brand
synonymous with ease of experience and modern office collaboration.
Their approach works. Slack is the fastest-growing SaaS
startup ever, and used by 77% of Fortune 500 companies. Despite this
legendary growth, Slack famously said it was a business with no salespeople.
2. Bloom & Wild: mailbox flowers
Bloom & Wild is an online flower
delivery company focussed on simplifying the process of ordering luxury
flowers. Aron Gelbard, CEO and founder explained their value proposition in their 2017
funding announcement: “We’re enabling [our customers] to order
flowers and gifts from the palm of their hand with better product, designs and
payments.”
I can’t be the only person who has thought of doing
something nice, only to give up when I realize how much work it takes, or when
I couldn’t find exactly what I needed. Bloom & Wild makes it possible for
customers to deliver flowers in under a minute using their smartphone or
computer, meaning that going from thought to action is almost instantaneous. As
Gelbard says, “Our mission is to make sending and receiving flowers a joy,
using technology to turn emotions into an action in the simplest and most
beautiful way possible.” The flowers are hand-packaged to be delivered through
letterboxes, sent as closed flower buds for a longer bloom.
While many companies deliver flowers, Bloom & Wild
differentiates itself by offering a smooth customer experience, as well as
competitive pricing, with significantly cheaper blooms than average.
The company’s exponential growth has been
substantially driven by word-of-mouth referrals. Bloom
& Wild communicates its value proposition so clearly that its customers
perform much of the hard task of marketing for them. With Bloom & Wild,
sending fresh flowers is as simple as sending a text and receiving them is as
simple as receiving a letter.
3. Airbnb: belong anywhere
Airbnb first became known as a leader of the sharing
economy, disrupting the hospitality industry. Its core product is an online
booking platform that connects guests with hosts who have spare accommodation.
Because of this business model, Airbnb actually has two entirely different
types of customers to market to: guests who need a place to stay, and hosts who
would like to make some money by renting out their space.
Airbnb’s unique value proposition for guests is the
opportunity to get a truly local experience when they travel, especially when
compared to staying at a hotel. In
their own words, “Airbnb exists to create a world where anyone can
belong anywhere, providing healthy travel that is local, authentic, diverse,
inclusive and sustainable.” Their rooms are known for having more character
than the average chain of hotels. They are usually located in a neighborhood,
and guests might even be staying with a local host who can give them first-hand
knowledge of the culture (including where to eat!). This feeling of being at home
in a foreign place leads directly into Airbnb’s main tagline: Belong Anywhere.
For hosts looking to make money, Airbnb makes it “simple and
secure” to fill a space that would have otherwise gone empty, effectively turning
their hosts into “hospitality entrepreneurs.” In recent years,
hostels, bed and breakfasts and more traditional hotels have also jumped on
Airbnb to offer their spaces for rent. Because Airbnb offers every host access
to a large number of potential guests, it’s become more appealing to businesses
looking to advertise their rooms.
Airbnb ensures the safety of both guests and hosts through
their verification process and through actively seeking reviews from both
parties. Instead of trying to find short term guests through Craigslist (or
just avoiding it altogether), hosts have a safe way to generate income from
their extra space and perhaps make a new friend as well. Airbnb also offers
insurance against property damage and accidents, so hosts can breathe easy,
even though they are welcoming a new person into their home.
As a business goes through different stages of growth, its
value propositions are likely to change. Originally marketed as much cheaper
than staying in a hotel, Airbnb has now become an experience-driven, mainstream
staple for tourists globally.
Along with having different value propositions for different
segments of customers, businesses can also have product-specific value props.
Airbnb’s experience platform — which connects guests to “experiences” where
they can participate in a local activity with a local guide — overlaps with the
company’s mission statement, while providing its own unique value:
“With Experiences, Airbnb offers unprecedented access to
local communities and interests through 25,000+ unique, handcrafted activities
run by hosts across 1,000+ markets around the world.”
“Belong anywhere” is a powerful statement that reflects the
Airbnb value proposition — creating a global (yet hyperlocal) community of
guests and hosts.
4. Fjällräven: Forever nature
Fjällräven is a classic Swedish outdoor clothing and
equipment brand known for quality and durability. Founded in 1960 by Åke
Nordin, they designed a new style of backpack that was more functional than the
traditional designs available. Fjällräven’s products were originally intended
for the winter wilderness of northern Scandinavia, and to be used by professional research expeditions. Now, the
60-year-old brand is experiencing a resurgence amongst younger generations in
North America. This success is due to their core value proposition — customers
feel confident in purchasing from Fjällräven because of their high-quality,
sustainably made products that balance function and fashion. Customers look
great wearing Fjällräven backpacks, but they could still go hike a mountain.
Because of their origins, you might think that Fjällräven is
solely aimed at people actively participating in outdoor pursuits like hiking,
mountaineering, and bushcraft, but that’s not the case anymore. As they’ve
expanded “south of the frost line,” Fjällräven has had to re-invent themselves to
appeal to a newer generation that doesn’t spend their days on a fishing boat or
in extreme conditions. “People now see this brand as aspirational of an
experience, of community, of living a certain kind of life,” explains Nathan
Dopp, Fjällräven’s North American President. In other words, being a Fjällräven
customer will get you closer to the outdoors, even if you’re not already an
avid mountaineer.
Finally, their dedication to sustainability also appeals to
the conscious consumer looking for products they know were made using
sustainable supply chains and production processes. Fjällräven manufactures
many of its own products using its own G-1000 material, as well as its own
Greenland Wax, contributing to its value proposition of offering quality and
durability. As their website says, they “craft products for a lifetime of
memories.” The time-tested quality of its products justifies what some
consumers might view as the expensive pricing.
Fjällräven consistently communicates its value proposition
through inspiring, aspirational branding and marketing materials. It’s a brand
that customers trust, and love to do business with.
Value propositions are a living document
There is no one-size-fits-all for value propositions. It’s
likely you’ll have to rework your value propositions over time, as your
business develops and the environment changes. You may require multiple value
props for the various products and services your business offers.
Instead
of appealing to everyone, you’re communicating the unique value of your
product, service, or brand, to a core customer base. The next challenging, but
exciting, step is to communicate this value clearly and consistently to your
customers at every important touchpoint.
Catherine
Heath
Catherine is a content writer and community builder for creative
and ethical companies. She is often writing case studies, help documentation,
and articles about customer support. Her writing has helped businesses to attract
curious audiences and transform them into loyal advocates.
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