Having a value proposition is important to help set your business apart from the competition. In the real world, factors such as location, convenience and zoning laws go some way to promote your business and limit competition, but online there are no physical limits to you or your competition. Having a value proposition is therefore especially important for online businesses.
What is a value proposition?
A value proposition is essentially a way in which you distinguish yourself from the competition. It is a business feature, service or innovation that provides value to a customer when they use your business. It is a reason for customers to choose your business over a competitor.
Why are value propositions important?
A value proposition is a means of establishing your company’s reputation. Ideally, your customers come to your business because of what your business can offer them. They believe that you will deliver for them the benefits they desire and that your business is better placed to do so than others.
Customers want to get the most value for their money is most obviously and easily demonstrated in pricing. Customers want to get the most they can for the least amount of money. However, low pricing is not the only way to provide value and is not even always the best way. Your products or services could be more expensive than competitors, but if you can offer greater value propositions elsewhere, you may still win their business.
How to define value propositions
Value propositions will inherently be unique to your business, as a value proposition loses value when several businesses provide similar services. However, you are in a unique spot in that you know more about your business and your clientele than your competitors. Successful businesses should constantly be running data gathering and analysis on their customer base to understand what works and what doesn’t.
This data, whether it’s website analytics tracking or more involved offline tracking, can help you to determine where your business’ values lie and how you can best emphasise and maximise them to generate better value propositions than your competitors.