Every business should have a business statement that gives a summarised outline of what the business is about and why a consumer should patronize it. The promise of good quality service you make to your customers on a daily basis, otherwise known as a business statement, is called a value proposition.
A good value proposition explains the reasons why a customer should leave the competition and come for your products or services. It sways customer over to your side by assuring them that the product or service you offer will better suit their needs than those from your competitors.
It explains what benefits you provide, who you provide it for and how uniquely you do it. Using a solid value proposition, you are able to define the right target audience who stands to benefit most from whatever products or services your business offers.
This gives your company a unique competitive edge over other companies in the same niche and coining a term from this, Warren Buffett, a renowned investor and executive at Berkshire Hathaway, calls it an economic moat. Your business can have a high sustainable competitive advantage if you have a very extensive or comprehensive moat and you can get this by having pricing power, developing your brand to make your business known, and a large portion of market demand.
Some good examples of companies with great value Proposition include:
- Apple iPhone – The Experience IS the Product
- Unbounce – A/B Testing Without Tech Headaches
- Slack – Be More Productive at Work with Less Effort
A great value proposition should be brief, intuitive and at the same time appeal to the strongest decision-making instincts of a customer. Dianna Booher said, “If you can’t write your message in a sentence, you can’t say it in an hour”.
It should in clear terms state the value your business offers by explaining how your business solves a need, why it is better than similar products in the market or how it offers a better service and going a step further, it should also state the added benefits your business offers that your competition doesn’t have.