Marketing Reboot for 2014 – Part 2 – Building Your Value Proposition
By Nial Adams
Building Your Value Proposition
Welcome to Part 2 of my Reboot Guide for you to give your marketing a real kick up the backside in the months ahead.
If you’ve not yet read Part 1 I recommend you go there first and read it. Although each of the four sections of this mini-guide are not specifically in priority order (and your priorities may be different to others), it will simply all make more sense!
So… if you’ve read that then on to Part 2.
In this week’s release I want to introduce you to the importance of the Value Proposition. Yep, it’s a fancy term that you may have already heard other marketing people talk about. Let’s break it down and understand why it is so important.
It makes sense for me to give you the headline first and the one big reason why having a clear Value Proposition is so important.
Here it is:
Your ability to connect with your marketplace, to engage your customers and get them to actually buy from you, it’s essential to set out the reasons why. To do this you need to present a proposition (a sales argument), which reflects an expression of value.
I’ve written before about why price isn’t anywhere near as important as value (this article caused a big stir!).
It’s a big misconception that price is everything and that customers buy predominantly on the basis of price. This simply isn’t true. And besides, the actual word price is often quite misleading.
Think about it for a second. Price is subjective and means very different things to different people. While the actual price of something may be described and expressed in a standard from, £100 for example, it’s still notional and subjective.
The £100 price of something is seen in many different ways. The value of the pound, or the dollar, or any currency fluctuates. To someone of extreme wealth £100 is almost insignificant. Whereas to someone on the breadline £100 is a fortune.
Other things determine price. A litre of petrol in one part of the country can be certain price, while a litre of the same petrol somewhere else may be noticeably more, or less. So £100 can buy you different things dependent on who you are and even where you live.
When we talk of expensive or cheap we are still describing value. People don’t really buy things because they are ‘cheap’, they buy them because they are both low cost and good value for money. And again, these things are subjective.
So when you want to present a value proposition you need to do two things:
1) clearly set out the features and benefits of the product or service and…
2) express the value as you believe the buyer will view it.
Why is this important?
To answer this let me remind you that we often find offers vague and confusing. I’m frequently aware of adverts for products or services that do very little to actually explain to me what they are or why I would want (or need) them. Perhaps you’ve noticed this too?
TV adverts are a good example of this. Mainly because they are a form of brand marketing (or ‘top of mind’) they focus on other elements like lifestyle, desire, fashion and trends, without really explaining what they are. This is a totally different form of marketing. This requires high levels of frequent exposure (which means big budgets and a whole lot of waste).
A very common marketing mistake is to present your offer in a way that doesn’t completely explain what the product/service actually is, or what makes it different or special. This is generally because we can sometimes forget the basics. If it’s a product/service that we’ve been working with for some time we know and understand it. For a brand new customer however, they may have little or no existing knowledge or understanding of it. So you need your advertising to educate them. Don’t just ‘tell-sell’.
Assuming that your (would-be) customers know what you do is a fatal error. Many times I’ve asked course delegates or clients what makes their product or service special or different. Often it then becomes apparent that these really important features or benefits are never explained in the sales and marketing materials they use. They tell me that they simply overlooked these or assumed that the customer would already be aware of them.
So the first thing you need to be doing is taking another look at the way you express your offer through your marketing, advertising and promotion. Do you explain what your product or service is all about and do this clearly?
Have you remembered to include all the important features and benefits and express these in a language that the customer will understand? Remember to avoid technical jargon or industry language that means very little to the rest of us!
Then, when you’re confident that you’ve done this correctly, have you expressed the price (or price position) of this with a clear explanation of the value?
You may not always disclose your actual price in advertising or promotional literature, so your ‘price position’ may apply. This is where you would give readers/viewers an indication of the price point. Are you setting out a product that looks ‘reassuringly expensive’ and high-end, or is your aim to express a budget offer where a keen price (great value) is the objective?
Building a Value Proposition only ever works if you always remember to include these two elements;
What it actually is, what it does and what makes it special or different, and how all these are then translated into the asking price to establish value.
With both elements included you are then much more likely to be able to create a value proposition. This is where you tell the reader/viewer/listener what you have to offer and why you believe it represent real value to them.
So if value means different things to different people where do you start and how do you create an approach in your marketing that fits all your target audience?
Well, the first thing to remember here is that you should always be able to focus your offer on a specific target audience and you may choose to create different segments based on different price priorities.
Let’s look at an example:
An hotel has a number of rooms to let. They are all pretty much the same and the costs of providing them is standard across the board. However the hotel manager could decide to create a range of value offers.
At one end there could be a higher-service, higher-value offer. This might include priority booking, fast check-in and perhaps other features like offering client accounts. This could be the ‘corporate’ end of the business, where a certain type of customer is willing to pay a little more in exchange for a quicker, more bespoke and personal service.
Then there could be a number of rooms that are offered at the standard room tariff. No deals, no extras, no discounts.
And finally, there could be a number of rooms that are offered on a discounted, last-minute deal-type basis. The same rooms, the same cost of service but with an incentive to shoppers looking for a deal.
TASK #1. Check your Value Proposition
In this week’s Action Plan I’m encouraging you to stop, review and take a long hard look at how your products and/or services are expressed.
You may have been using the same descriptions, the same adverts and promotional material for some time. You may assume that everyone knows what you’re talking about; except if someone is reading your marketing spiel for the first time, they probably don’t.
Rule #1 – I’ll state it again; never assume that your target audience knows what you know. Assume that they are starting out from scratch. One of the most common mistakes is thinking that customers already know a lot about your product or service, when in reality they probably know (or remember) very little.
A good way to do this is to get an independent person to take a look over your marketing. Ask them to review your adverts, sales literature, brochures and website and tell you what they understood. Ask them if they felt that your offer was clear and concise.
Did it make sense and most importantly, could they quickly see why it was special or different? Ask them to be brutally honest (and give them a chance to do this), then listen carefully to their answers.
If you’ve exposed your actual price, ask them if they felt that they were able to understand where the value was expressed in the pricing. Were all the features and benefits fully explained? Could they see how they would benefit and did it appear to be a ‘good offer, well priced’?
Armed with this information you can now start to make some simple changes and test how this works. Of course, you need to get a spectrum of opinion on this. Asking your existing customers what they think about your price/value is always interesting.
Many people avoid this because they mistakenly think that their customers will always say that it’s too expensive. You might be very surprised; your own customers may suggest that your prices are too low or your offer looks too cheap.
If you’re just starting out and you don’t have any marketing content written, this is where you get started. Pull up a chair and begin by writing down all the reasons why you think customers will want to buy what you have and specifically what makes this potentially valuable to them.
Always approach this from the customer’s perspective and not your own. Some feature, like free postage, store-front parking, a customer help-line, or a range of payment options can all be of real value to your customers, even if you don’t perceive this yourself.
This only needs to be a draft and it’s a really important exercise for you to work through. Knowing how you are going to articulate your product or service to customers is absolutely fundamental to your business, so start learning how to do that now. Then from this material you can start to craft marketing and promotional messages that not only make sense, they have compelling value too.
1) Understand the difference between price and value and don’t confuse them
2) Make sure that you don’t assume customers already know what you offer and why
3) Ask someone independent to review your marketing and advertising
4) Remember that price and value can be represented differently through your marketing
5) Add value into your offer and build a proposition that sounds (and is) awesome!
6) Expand your marketing and don’t be bashful; modesty can rob you of more sales
7) Make small changes to your marketing messages and test the results carefully
As I explained in Part 1 of this mini-guide, there is one really fundamental thing you can do to dramatically improve your results; start taking your marketing seriously.
If you feel energised and motivated to get started and want some help I’m always pleased to offer advice and guidance. And if you really are serious about learning what makes marketing work then hop over to this page –Flying Start Marketing Challenge – and find out how you can get on the programme.
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