In a competitive economy, a business or entrepreneur needs to be honed and poised for success. One part of creating personal and professional success is doing deep analysis on what your are offering consumers, and being able to sum up the value of your goods or services in very simple, clear language. The statement of what you are offering is called a "Value Propostion."
Value Propositions are the sum of the benefits of your product to a given consumer, and in many ways can be looked at as analytic math. There is a formula that you can apply to your statement to indentify areas that need improvement.
The very general math of any proposition is that if you give me X amount of dollars, you will get back Y amount of value. Whether this proposition is said out loud, in advertising or on packaging, or whether it is unspoken, for example through the subtleties of branding, the value proposition always tried to make consumers see the high value of your offering.
But there is another formula that can be used when craftin a value proposition. It's the 4 Ws and an H.
The elements are the same as the elements of a good news story: Who, What, When, Where, How. By answering these questions, you will have a good list of the value of your service and therefore can create a strong value proposition to back up your goods. You will know what to advertise and what to feature, and you will also know what to improve.
WHAT What are the key elements of your product? What does it do? What can the buyer do with it?
WHEN When will they see or feel a benefit from this product or service? When will it be used up or not useful?
WHERE Where will a consumer use your product? Are there special locations to find this? Is it rare? Is it more useful or needed in some parts of the world than others? Where will it fit into consumers' lives? Where was it made?
WHY Why does someone want this? Why should a consumer pick your product? Why did you make it the way you did?
HOW How is your product better than the next guy's product? How does it work? How does it make people feel or anything in their lives better? How have people been living without it before you? How does it fit into your brand?
Perhaps the most important, and the most forgotten, element of a Value Proposition is the WHO. Many companies crafting a Value Proposal think of their sales as a one-way street. "I offer, it sells." But the consumer is the key missing element in that statement. A terrific product (for example, ice makers) can have no value if the consumers are not interested (for example, Alaskans who live off the grid.) The same product could have a great value proposition to a different consumer, say Floridians. If you think through the "WHO" in the value of your product, your product, service and proposition will be even stronger:
WHO is the ideal consumer for this? Who needs this? Who would be interested in learning about this? Who are the communities and individuals most likely to want this product? Who will be most likely to tell other people about this product's value? Who do my consumers know and respect?
When a company or professional asks and answers all of these questions, the most important characteristics that define the value of the product will emerge. By joining these characteristics into a solid Value Proposition, the company will know how to market their product to create the most success possible.