7 Competition Crushing Value Propositions
One of the biggest challenges that any small business faces in the area of marketing is standing out from everyone else that say it’s doing what you’re doing.
Until you can firmly offer a solid reason for why you should buy from or hire us over everyone else, you’ll compete on price.
As you develop a marketing strategy for your business you must proactively create the value proposition of “why us” and build all of your marketing messages, products, services, processes and follow-up communication around supporting that proposition.
This is how you use strategy to dominate your market. This is how you define value in terms that matter to those you are trying to attract.
Below are seven ways to think about defining and refining your core value proposition.
1) We know you – So many companies try to serve mass audiences. This is tough for any organization, but can be next to impossible for a small business just getting started. One very powerful way to create a point of differentiation is to carve out a narrow segment of a market and explain through every communication that you are the experts in serving that market.
Divorce attorneys that specialize in representing men are an example of this type of approach. Obviously, you won’t attract female clients, but a man going through a divorce might feel you have specialized knowledge and experience that other, more generic divorce attorneys, don’t possess.
2) A better way – Creating a product, service or approach that clearly offers a better way to get a result, particularly a result I desperately need to get, is another strong way to demonstrate value and promote a business.
Pretty much everyone struggles with processing too much information. Many have developed all kinds of systems to remember things, track things and keep to do lists under control. Evernote created a better way to do this and made the process simple, accessible and manageable on the devices that millions already used, so it’s value proposition offered a very recognizable way to do something better and the company has grown measurably because of it.
3) One of a kind – Some segment of just about every market craves things that are custom made. The more markets are inundated with mass produced items, the more opportunity exists for things that are made to order or made by hand.
I believe the popularity of a platform like Etsy is due in part to this need for some to find and possess things that are one of a kind or made just for them.
If you can find a segment of your market that values this approach it can be a highly profitable proposition. I asked the owner of a men’s clothing shop I frequent about the market for suits these days and he said there are really only two segments left. The low end off the rack suit and the very high end custom tailored suit.
4) Access – Another interesting value proposition is to take a market or demand that already exists and disrupt it by creating access that isn’t generally available.
Peter Shankman founded a service called HARO or Help a Reporter Out, based on this proposition. PR professionals and marketers had long paid thousands of dollars a year to gain access to a pool of journalists looking for sources to specific stories.
HARO built a database and service based on this concept and made it available to anyone that wished to subscribe for no cost. The service became so popular that it began to attract significant ad revenue and Shankman later sold it to another industry disruptor Vocus.
5) Savings – Offering a market ways to save money or lower risk will always be a strong way to differentiate a business. Now, understand this is not the same thing as offering a lower price. The key to this proposition is to demonstrate how your product or service will clearly allow them to save money through the use of what you are offering. A version of this proposition is to show them how they can lower the risk of losing money as well.
Many of the cloud based Software as a Service offerings such as Dropbox do this very well. Dropbox allows many people to more easily share and store files without the need for server hardware and eliminates the risk of losing data by automatically offering backups.
6) Convenience – Come up with a product, service of business that makes it more convenient to do something that people are already used to doing and you’ve got the makings of a winning value proposition.
I read a lot a books and the Kindle device for me is flat out the most convenient way to find, buy, read, store and carry lots of books around.
7) Design – Great design is actually very hard to do, but when you invest in it as a core value proposition, it can actually be a tremendous way to stand out and attract a market segment for whom form and function are equally important.
Apple has entered and dominated several markets in which they had no history, mp3 players and phones, using their design value proposition.
Building a business model and marketing strategy based firmly on any one of these proven proposition will allow you carve our your place in the market. However, if you can combine several of these propositions you’ve got the foundation for something downright disruptive.
A collaboration between four close friends, eyewear maker Warby Parker was conceived as an alternative to what the founders felt was the overpriced and bland eyewear available today.
According to Neil Blumenthal, co-founder and co-CEO, “We just didn’t think a pair of glasses should cost more than an iPhone.”
Warby Parker’s obvious innovation was to go direct in an industry full of middlemen, big name designers and licensed brand names.
The company designs their line of glasses, works directly with the manufactures and sells it’s line of prescription and sunglasses directly to the end consumer.
In an effort to take on an entrenched $16B industry, they created a fixed price of $95 for all styles, ship out up to 5 pairs for no cost test drives prior to purchase and donate a pair of glasses to those in need for every pair sold.
The company was featured on CBS Sunday Morning and in the New York Times in 2011, sold over 100,000 pair of glasses and grew to over 50 employees according to its 2011 annual report – another innovation as it was delivered in a series of infographics rather than the typical dry corporate report.
Savings, access, convenience, design and a better way all rolled into one value proposition.