By Ed McLaughlin with Wyn Lydecker
Before you start your business you need to ask: What is your product’s unique benefit, and how does that benefit meet a critical customer need? The most efficient path to profit is a value proposition that clearly delineates what your customer will get. It clearly defines and quantifies how your product will solve a problem or relieve a customer’s pain better than anything else.
My experience has shown that a value proposition which provides a crystal clear quantification of benefits is easiest to sell and the most compelling to buy. A business-to-business (B2B) value proposition is dominated by quantified benefits, whereas a business-to-consumer (B2C) value proposition can lean more heavily on qualitative benefits.
When I was thinking about USI, I knew our value proposition would be our competitive differentiator. Since our competitors sold their products based on their brand names using a traditional approach to conduct transactions, the doorway was wide open for change. If we could demonstrate how customers could receive quantified benefits many times greater than the cost they paid, I was confident we would have a bankable value proposition. It turned out that our value proposition did work and helped propel USI to a 40% compounded annual growth rate during our first ten years of operations.
To develop your value proposition, you should answer the following questions:
- How much can your product increase customer revenues?
- How much can your product decrease customer expenses?
- How much can your product contribute to customer profits?
- How much can your product improve customer productivity?
- How much can your product increase customer speed to market?
- How much can your product improve access to critical information?
Once my partners and I had nailed down the hard benefits of our product, we also enumerated the qualitative benefits: higher quality service, improved employee morale, and enhanced customer satisfaction. You need to list the qualitative benefits for your product as well.
To define your B2C product’s benefit(s), ask questions that center on alleviating pain or providing a distinct advantage for your customer. To narrow down your unique benefit, ask if your B2C product will do any of the following:
- Make life more convenient?
- Provide safety or security?
- Increase self-esteem or confidence?
- Improve the quality of life?
- Improve health?
- Save time and money?
Copyright © 2013 by Ed McLaughlin All rights reserved.