In good times and bad, knowing your value proposition can help you to maintain your growth. In this post we discuss why you should know yours.
A lot of businesses, particularly smaller ones, don’t dedicate a lot of time to marketing strategy. We understand this as lots of companies have experienced success without consciously setting objectives or developing strategies.
When we come into contact with businesses that are doing less well, however, we wish they had spent or would spend time defining their value proposition and communicating it to their market - or let us do it for them.
What is value proposition?
Value proposition is a complex principle and one that is subject to interpretation, but put simply, we believe that value proposition is your business':
Reason for existing
Reason to be chosen over its competitors
Reason for charging what you charge
A more scientific description is that value proposition is 'the promise of value that will be delivered to your customer'.
Why is value proposition important?
If you are unable to communicate your value to your customers, why should customers place value in what you offer? If you are unable to tell customers why they should choose you and why they should pay what you are asking, why would they?
This is more true now then ever. Many buyers and suppliers will look to remove layers of margin by foregoing specialist services or removing 'middle men'. Companies that do not know and share their value proposition with customers may find themselves loosing out on price frequently or being removed from the supply chain altogether.
Don’t price cut - apply your value proposition
It's natural to get frustrated when others win business from you by lowering their price. And its natural to be tempted to do the same. But price cutting is a dangerous, potentially irreversible, and unsustainable game to play.
In the eyes of customers, price cuts are permanent. Once you reduce your price, you will most likely struggle to increase it again. This is especially true with repeat customers - and repeat customers should be the customers most willing to pay a fair price for your services.
Instead of price cutting, discover your value proposition then revitalise your marketing effort with your value proposition at its core. Be bold and vocal - if customers don’t know your value proposition, and feel your conviction, they are unlikely to believe in it. And after all, your value proposition should be very, very real - it’s the reason you are in business.