How Your Business Can Use Data to Find its Value Proposition
What makes your company and its product or service different from your competition? As any small or medium-sized business owner knows, the answer to that question is vital to long-term success. If you cannot differentiate yourself, your audience will eventually veer toward the lowest price point, making any business growth unsustainable.
That’s what makes a value proposition such a crucial part of your marketing efforts. If you can concisely describe why your product is both valuable to your audience and different from its competition, you can build your entire business on that description.
But how do you get there? Especially for startups and small businesses, coming up with the perfect value proposition can seem like a difficult endeavor. By gathering relevant data, you can make sure that the statement you end up with is not just relevant to your audience, but can also be used as the sustainable basis of your competitive advantage.
First Step: Define the Problem
Forbes.com quotes legendary inventor Charles Kettering in stating that “a problem well stated is a problem half solved.” Every product and business, at its core, should seek to solve an elementary problem that its audience solves. But how do you know what that problem is? This is where data first enters the equation.
Through market research, even small businesses can define latent consumer and business needs that their products might solve. The process can be as simple as customer interviews and surveys, or as complex as in-depth evaluation of your audience’s daily behaviors.
The key, on all ends of that spectrum, is the gathering and using of data to judge your results. If your audience wants to give you their feedback on latent or obvious problems they need a product to solve, you have to have a platform in which you can gather and evaluate that feedback. Survey tools connected to your CRM, for example, can help you organize your data in a single space.
Second Step: Describe Your Solution
Of course, a problem matters little if your business cannot fix it. Your product should promise to provide the solution to the problem(s) you found in the first step, helping to improve your audience’s lives in one way or the other. In this second step, it’s time to find out just how it might do this.
At this point, don’t worry about your value proposition being a snappy marketing slogan or differentiating itself from your competition. The goal is purely to make sure that you can define exactly how your product would solve the problem defined in step 1.
Third Step: Competitive Research
Next, it’s time to understand exactly how your proposed solution fits into the competitive environment. Have other businesses also recognized the same problem as you, and are they trying to solve the problem? If so, is their solution different than yours, or similar?
In the course of this step, data once again becomes crucial. Competitive research can go as far as understanding the keywords other businesses bid on in their search engine marketing strategy. But once again, asking your customers and current audience for their opinion may be the most effective step.
In marketing, perception is reality. Even if a competitor has a great solution to the problems you defined, that matters little if they don’t communicate it effectively. Through surveys, using tools such as Microsoft’s Voice of the Customer tool, you can gauge whether the problem they need solved is already being addressed by someone in the marketplace.
Fourth Step: Define the Value Proposition
At this point, it’s time to combine the previous two steps and develop a compelling, unique, and sustainable value proposition. ConversionXL has a great tutorial that can get you started, including the following steps:
- A headline that communicates the core benefit.
- A 2-3 sentence paragraph describing your solution in a bit more depth.
- 3 bullet points describing the features of your product that provide the solution.
- A visual, such as a hero image, that describes the above in a more succinct, effective way.
Depending on your audience, the result of this exercise can look very different. But at its core, your value proposition should always be unique to your industry, and designed to solve a customer need. Only effective gathering and evaluation of data can help you accomplish both.
Fifth Step: Communicate Your Value Proposition
Finally, it’s time to put your value proposition to good use in communicating it directly to your target audience. Above all, it should guide your marketing efforts in creating a consistent message that all of your tactics can revolve around. But in addition to becoming that guiding force, it can also directly impact some of your messaging.
For example, your lead nurturing efforts, using a CRM such as Dynamics, can include an email speaking directly to the value proposition. A message along the lines of What Makes us Different can be immensely effective in reaching leads who are not yet sure whether your solution is right for their needs.
In addition, be sure that your value proposition flows to your sales efforts as well. Consistency is key, particularly when it comes to the final sales pitch. Reinforcing your core differentiator may just be the message point you need to turn leads into customers.
In short, your value proposition should be a guiding principle within all of your marketing and sales efforts. And of course, the best way to get there is to gather and evaluate data effectively. For that, you need the right tools. And that’s where we come in.
As mentioned above, survey tools and CRM solutions can be invaluable in gathering and communicating data points from and to your audience. To learn more about how we can help you break through and improve your business using these tools, contact us.