When you are working on a marketing plan for your organization, where do you start? Marketing at its core is getting the right message to the right people at the right time.
The first challenge of this is figuring out what the right message should be. I believe the heart of your messaging should be your value proposition.
What Is a Value Proposition?
The term “value proposition” was first defined in 1988 by McKinsey & Co. as “a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits.” In the value propositions we write now, we do not always include the price, but the core remains the same: identify tangible and intangible benefits of your offerings.
Why Do Value Propositions Matter?
Odds are that the term “value proposition” is used frequently inside your company. You might even be confident that the majority of people in your company could explain your value proposition - at least enough to get by.
In many small to midsize industrial organizations, people often rely on tacit or institutional knowledge about their products and value propositions. Few of these organizations have documented and codified this knowledge. Unfortunately, this means that new employees often don’t fully understand the value proposition, and they might get a different answer every time they ask someone.
As everyone has their own (slightly different) version of the organization’s value proposition in their minds, this can lead to inconsistencies in your sales and marketing efforts.
Getting everyone on the same page is a powerful way to strengthen messaging and improve its impact.
Consider the importance of value propositions on these groups:
Employees. For employees, value propositions create a shared understanding of exactly how their company produces outcomes that their customers care about.
Customers. Perhaps most importantly, value propositions show customers, whether directly or indirectly, exactly how your product or service is going to help them achieve their goals.
Stakeholders. Value propositions shed light on the value creation processes of a company.
Running a Value Proposition Workshop
If you want to develop a comprehensive value proposition, I recommend running a value proposition workshop. Here at Strativise, this is often one of our first strategic sessions with clients. We gather key decision makers, application experts, and those most familiar with the end user in one room for an hour and a half to two hours to identify the factors that contribute to a good value proposition.
Using a facilitator to conduct the workshop can help promote open and honest communication from all participants. We have also found that groups of 5-8 people, representing different areas of your business and different vantage points on how your company serves your customers, are the most effective.
One of the most common mistakes people make when conducting a value proposition workshop is going too broad when defining their ideal customers. For many industrial companies, their products are sold into a wide range of end markets and to a wide range of customer types. Defining a specific target customer group can be challenging in these situations, but it is important. Value propositions are more powerful when they are targeted to a well defined group.
Once you have your workshop participants and a profile of your ideal customers, it’s time to get started. We recommend a tool called the Value Proposition Canvas from Value Proposition Design: How to Create Products and Services Customers Want. This plug-and-play tool is similar to a business model canvas in that it allows us to brainstorm related topic areas and assess their relationship with each other.
Source: Osterwalder, A., Pigneur, Y., Bernarda, G., Smith, A. (2014). Value Proposition Design: How to Create Products and Services Customers Want, John Wiley & Sons.
On the value proposition canvas, there are two sides, the value map and customer profile. The customer profile has three sections: jobs, pains, and gains. Jobs are the things your customers are trying to get done. Pains are the obstacles, challenges, and risks that get in the way of accomplishing these jobs. Gains are the benefits and even aspirations your customers have.
The left side of the canvas is the value map, which lists the products and services your value proposition rests on. This section describes the way your products and services are pain relievers and how they reduce or eliminate the pains your customers experience. Finally, this section describes the way your products are also gain creators and how they produce or maximize the gains that your customers care about and desire.
For your workshop, start on the right side of the canvas and work your way to the left. Let’s take a closer look at each area:
Ideal Client Jobs
First, you should identify your ideal customer’s job. Take a minute to step into their shoes. What tasks are they trying to perform? What problems are they solving? What needs are they satisfying?
This might feel straightforward at first, but take the time to dig deeper. Your client will have functional jobs they complete, but they will also have social and emotional jobs they work towards. Brainstorm as many of these jobs as you can, building out a rich set of perspectives on the jobs your customers are trying to accomplish.
Ideal Client Gains
Gains describe the outcome your ideal customers seek. You can think of gains in levels. For example, there are required gains, which simply means the product does the bare minimum of its job, i.e. a centrifugal pump moves liquid.
Next, there are expected gains. These are slightly more frivolous than required gains, but still commonplace in the market and, therefore, expected. For example, if a pump was advertised for hygienic applications, your ideal customers would expect the pump to have the appropriate certifications, such as 3-A or EHEDG.
Third, there are desired gains. These gains are above and beyond the previous two levels. Clients would not necessarily expect these gains, but they would love them. In our pump example, a desired gain would dramatically improve efficiency, reduce maintenance costs, or improve material handling.
Lastly, there are unexpected gains. Your ideal clients would be amazed by these gains. I will leave this example to your imagination!
Ideal Client Pains
The pains your ideal client faces include undesired outcomes, obstacles, and risks. These are the thorns in their side that cause endless annoyance. Think about these questions when identifying pains:
- What frustrates your customers or makes them feel bad about their performance?
- What are the primary obstacles your customers face?
- What requires substantial effort from your clients?
Product Gain Creators
Now it is time to identify exactly how your product or offer can help them achieve their desired gains. Ask yourself:
- How do you create time, money, or effort savings for your clients?
- How does your offer create positive social impact?
- Does your offer bring success? How so?
A quick note: you don’t need to try to create every gain or solve every pain your ideal client faces. Focus on the gains or pains that your company is in a position to impact. Trying to speak to every problem your ideal client faces is the fastest way to ensure your value proposition is too broad.
Product Pain Relievers
In turn, your pain relievers will describe exactly how your product addresses pain points faced by your ideal client. These pain relievers will have varying values to your ideal client depending on how extreme the pain is.
Look for Fit Across the Canvas
Once you are done brainstorming all six sectors of the canvas, step back and synthesize the information. You will notice themes and opportunities to consolidate or reorganize the information. Then, ask your workshop participants to rank the most important pains and gains. Finally, look for fit among your company’s gain creators and pain relievers and the highest ranked pains and gains of your target customers.
This linkage between your products and services, the gain creators and pain relievers they enable, the gains and pains of your target customers, and the jobs your customers are trying to accomplish are the foundation of your value proposition. Have your marketing team or any skilled writer turn this value proposition canvas into a value proposition statement for your company.
Maximizing Your Workshop
Running a value proposition workshop effectively can be challenging. While some companies are equipped to facilitate these on their own, others would benefit from a third party facilitator. Whichever path you choose, commit to getting your value proposition done soon so that everyone in your company can leverage it in their daily work. There is power in alignment, and aligning your organization around how you create value for your customers will make a positive difference.
If you have questions about running your workshop or want to explore having Strativise support your work, feel free to reach out any time.