Understanding the Value Proposition building blocks
A strong value proposition is relevant, quantified, and unique. It should effectively communicate how your offer solves your customers’ problems or improves their situation, backed by specific benefits. Uniqueness is key: why should potential buyers choose your solution over the competition? Ultimately, a strong value proposition should translate into financial terms as economic considerations play a major role in decision-making.
Factors influencing value perception
Value perception is subjective and varies significantly based on different criteria like benchmarks, buyer personas, company culture, and competitive environment. This perception is shaped by the trade-off between the benefits offered and the sacrifices required, such as reformulating or investing in new machinery or equipment.
What makes a value proposition work
Four main principles guide a value proposition: it’s
- measurable
- scope-specific
- dynamic
- customer-driven
It involves comparison with existing products or technologies, operates within a defined scope, adapts to changes in regulations or trends, and relies heavily on customer perception.
Avoiding common mistakes in the value proposition
Chemical suppliers often make three typical mistakes:
- Confusing material performance with benefits
It’s important to separate product features from performance and real benefits. Performance should be compared to alternatives to show both gains and trade-offs clearly.
- Excessive focus on performance and price
A value proposition extends beyond these factors. Incorporate dimensions like regulatory compliance, eco-friendliness, logistics, brand recognition, and technical service to create a bigger picture.
- Underestimating sacrifices
Suppliers must identify potential sacrifices for users and address them upfront. This helps avoid wasting time on uninterested customers.
Creating a value proposition: Key steps
- Clarify your offering
Clearly define what you are selling and the customer benefits it brings.
- Identify your target
Understand your target audience, their market, and application needs.
- Pinpoint customer's problems
Recognize the problems or improvements your product addresses for customers and their end consumers. – comprends pas ce point
- Highlight benefits
Focus on benefits over six dimensions—consider regulatory advantages or a longer product life, for instance.
- Differentiate your offer
Clearly define what makes your offer unique compared to competitors.
Tools for framing a value proposition
The Value Proposition Canvas and Value Curve are practical tools that can help in developing your value proposition by mapping customer needs and comparing your product against benchmarks.
Increase certainty in your value proposition
To eliminate uncertainty, involve the full value chain (incl. specifiers and formulators) in the development process and continuously incorporate user feedback, ensuring alignment with market needs. This proactive approach helps verify that your proposition truly adds value. Remember, a misaligned value proposition is a major cause of commercial failures, especially for new product launches. By engaging the market early, you can strive for a proposition that meets real market demands.
Building a strong value proposition means understanding the market, focusing on benefits instead of just product features, and clearly sharing what makes you different. By gathering real customer feedback and adjusting as things change, you can better meet customer needs and increase your chances of success.
