Will your business add value for your customers?

You’re starting a small business so that you can exchange a product or service you create with a customer who wants what you’re selling – you’re exchanging value with one another. But creating value is really the essence of business.

Sometimes it’s easy to lose sight of what “value” really means to us or to our customers. We can turn it into an abstract concept – and when we do, we lose that tangible sense of what actually creates value in our small business. The truth is, value is something quite real and quite concrete.

How can you create value for your customers?

If you want to understand how to create value in your business, think about being of service. All products of real value are embedded with specific ways of serving customers. Through that service, value is created. That which serves, creates value.

Let’s try a little exercise. Stop for a moment and think of something you own that you really value. Take off your business hat and see yourself as someone else’s customer. It may be a great pen that fits perfectly in your hand and doesn’t smudge, the satisfaction you get from your latest piece of tech, or the joy you get from your mountain bike. It doesn’t matter what it is, just so long as it’s something you would be really sorry to lose. Without it, there would be a small hole in your life – nothing like the loss of a friend or loved one, of course – but still, you would feel its absence. Now, in just a few words, write out exactly what you’d miss most about that possession.

We want your customers to feel that way about your products or services if they weren’t available to them. We’d want them to be a little sad without them. Perhaps there would be a little hole in their lives where your products or services once were. That’s value. And that’s the magic we’re trying to create for your customers.

For more about creating value for your customers, read about the elements of a value proposition.

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Create a value proposition for your business with this easy formula

A value proposition is an easy-to-understand reason why a customer should purchase a product or service from you. Value propositions can follow different formats, as long as they’re unique to your company and to your customers.

Generally speaking, the value proposition is usually a block of text (a headline, sub-headline and one paragraph of text) with a visual (photo, hero shot, or graphics). There is no one right way to go about it, but we suggest you start with the following formula:

Headline

What is the end-benefit you’re offering, in one short sentence? You can mention the product and/or the customer. Build in an attention grabber.

Sub-headline

(Or a two to three sentence paragraph.) A specific explanation of what you do/offer, for whom and why is it useful.

Three bullet points

List the key benefits or features.

Visuals

Images communicate much faster than words. Show the product, the hero shot or an image reinforcing your main message.

Evaluate your value proposition

Now that you’ve got a rough idea of the formula of a value proposition, evaluate yours by checking whether it answers these questions:

  • What product or service is your company selling?
  • What is the end-benefit of using it?
  • Who is your target customer for this product or service?
  • What makes your offering unique and different?

Using the headline-paragraph-bullets-visual formula, you can get yourself well on your way to creating a clear, solid, and compelling value proposition for your small business.

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customer value proposition

The elements of a value proposition

A value proposition is simply a statement we use in business to summarize an expectation of value – why a consumer (or business if your customers are other businesses) should buy your product or service. It’s an easy-to-understand reason why a customer should purchase a product or service from you. Let’s learn more about how it works.

What goes into a value proposition?

The ideal value proposition is concise and appeals to a customer’s strongest decision-making drivers. Your value proposition communicates the number one reason why a product or service is best suited for a particular customer or market segment.

Your brand’s value proposition should always be displayed on your website and in other consumer touchpoints or marketing materials. It should also be intuitive, so that a customer can understand the value your product or service should deliver without further explanation.

Value proposition example

As an example, here’s GoForth’s value proposition.

GoForth Institute was built on a single belief – that online small business training should be more than just education. That above all, entrepreneurs should be able to develop business skills and confidence conveniently, affordably and fast with support from people who’ve been there. Join our community of over 10,000 entrepreneurs, subject matter experts and coaches today.

The format of a great value proposition

Value propositions can follow different formats, as long as they are unique to your company and to your customers. Generally speaking, the value proposition is usually a block of text (a headline, sub-headline and one paragraph of text) with a visual (photo, hero shot, or graphics). There is no one right way to go about it, but we suggest you start with the following formula:

  • Headline. What’s the end benefit you’re offering, in one short sentence? You can mention the product and/or the customer. Build in an attention grabber.
  • Sub-headline or a two to three sentence paragraph. A specific explanation of what you do/offer, for whom and why it’s useful.
  • Three bullet points. List the key benefits or features.
  • Visual. Images communicate much faster than words. Show the product, the hero shot or an image reinforcing your main message.

Evaluate your value proposition by checking whether it answers the questions below:

  • What product or service is your company selling?
  • What is the end-benefit of using it?
  • Who is your target customer for this product or service?
  • What makes your offering unique and different? Use the headline-paragraph-bullets-visual formula to structure the answers.
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Using the Value Proposition Canvas to understand your customers

Why should a customer buy a product or service from you?

If you don’t know the answer to this question, you might need the Value Proposition Canvas.

What is value proposition?

Value proposition is an expectation of value – why a customer or business should buy your product or service. It’s a promise of value to be delivered. A value proposition should be a clear statement that explains how a product solves a pain point, details its benefits, and states the reason why it’s better than similar offerings available. The ideal value proposition is concise and speaks to a customer’s strongest variables in making decisions.

About the Value Proposition Canvas

value proposition canvas
Click to zoom in

Strategyzer.com and Swiss business management theorist Alexander Osterwalder developed the Value Proposition Canvas, which helps you create a match between what you’re selling and what customers want.

The Value Proposition Canvas helps us to understand customers. It collects information about their needs and requirements, so you can design your products and services in a more targeted way. This means increased sales and profitability, and less time wasted on developing ideas that customers may not be interested in.

By using the Value Proposition Canvas, you identify customer needs, and come up with products and services to meet those needs, in a visual and structured way.

Want to learn more? Check out our industry-leading online small business course!

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