Creating a clear and succinct value proposition that is meaningful to all of your business’ stakeholders, including your staff, customers and investors (if any), is one of the first challenges any entrepreneur faces.
A value proposition can be defined as follows: “A product’s value proposition is a statement of the functional, self-expressive and emotional benefits delivered by the brand that provides value to the target customer.”
The Value proposition is a reflection of the relationship between your customer and your brand.
To develop the insights you need to make the decisions around your target customer, your customer problem and the solution that underpins your company’s value proposition.
This first step is called “customer discovery,” and its primary objective is to identify your first customers. This is done by taking your main assumptions about who your customer is, the exact problem you are solving for the customer, and how the customer will buy from you—and turning those assumptions into a sort of hypotheses which you will then test (mainly through interviews and surveys with potential customers).
Value Proposition Components
- Functional – Product attributes with the functional utility for the customer
- Self-Expressive – gives our customers the opportunity to communicate his or her self-image
- Emotional – the positive feeling when our customers purchase or use our brand
- A statement of the functional, self expressive and emotional benefits delivered by your brand must address:
- Who is your customer
- The exact problem your company is solving for them
- How the customer will buy from you
- Is the problem repeatable or a one-time solution
Functional benefits are based on a product attribute that provides the customer with functional utility. The goal is to select functional benefits that have the greatest impact with customers and support a strong position relative to competitors.
Self-expressive benefits provide an opportunity for someone to communicate his or her company’s self-image. They heighten the connection between the brand and the customer by focusing on something linked to his or her personality. Self-expressive benefits focus on the act of using the product, as opposed to the emotional benefits associated with the result of using the product.
Emotional benefits provide customers with a positive feeling when they purchase or use a particular brand. They add richness and depth to the experience of owning and using the brand. Examples of emotional benefits include the “feel-good” factor when purchasing a product or service. Consumers want to feel good about their purchase and when they do, they often tell others. That is where a referral comes in.
The reason why a product’s value proposition is so important is because it gives the consumer the reason(s) to seek out your company and tell others if their needs have been met and a great customer experience has been had. Value Proposition gives consumers a reason to choose your products or services over other available offerings.
Dealium.io was created to connect small businesses with the communities in which they service. Dealium is a SaaS B2B Referral Marketing Technology Platform that connects small businesses with new customers through referrals from their existing customers using our proprietary algorithm-based referral code sharing technology incorporated with their customer’s SMS, Email & Social Media.
Dealium creates brand awareness, brand exposure & new customer acquisition opportunities for our business subscribers while allowing their customers to save time & money searching for reputable local small businesses.
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