A few years ago I was being interviewed for a commercialisation position. I was pretty confident, having been in the sector for awhile, and was looking forward to waxing lyrical on all things go-to-market.
Out of the blue, I was asked to define a value proposition as one of the key criteria of demonstrating my capacity in the job.
I hadn’t really ever thought about how I defined a value proposition. It’s something I know when I see it, but the act of actually putting that at the front of the start-up process gave me a clear point from which to begin the conversation with many future clients.
Let me pose the same question to you: if asked what the value proposition of your product or service is, can you instantly, cleanly and simply lay it out? This is a great exercise, and one that in its simplicity can be very revealing as a red flag to where you may also have a lack of clarity in your customer analysis.
Your value proposition has to at least articulate the problem you are solving for whom and how, while showing the compelling reason that consumers have in choosing your offering over another.
This in turn pre-supposes you know the answer to the question, that there is a problem to be solved, and you are clear on the target audience. If I were to use StartupSmart as an example, its value proposition could be that it provides daily, convenient, targeted advice and information to Australian start-ups to assist their growth and sustainability. For the consumer, this value proposition is strong, as it is free, and an aggregator for lots of different start-up advice, a one-stop-shop if you like.
For an advertiser or sponsor, the value proposition is slightly different, as it provides this group with a large audience of start-ups that their brands are exposed to. That start-ups need advice is the problem to be solved, and that this demographic is broad with wide ranging needs is understood and solved by the daily and diverse range of topics and voices.
So when you think about your product and your steps to market, you must have a clear value proposition as the first step. It is your reason to go to market in many ways, and the indication that there is a market that wants what you have to offer.
If you are operating in a crowded market, children’s clothing for instance, your value proposition will rely heavily on the differential your business offers – your fabric is organic, you manufacture in Australia, you have a niche design, you deliver through party plan, etc.
Try on the value proposition question and see if it flows effortlessly, or if there is a hesitation or confusion in what your value to the market and your customer base is. Refining this concept will focus you on your market, your customer demographics and what really drives your business to succeed.