Why a Value Proposition is crucial for small businesses
- Business Rescue Business Growth
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A Value Proposition explains why people will buy from your business and not your competitors. It is arguably one of the most important segments of a Business Model - if not the most crucial. But what is a Value Proposition and how do you create one? We will explain all this and more, so grab a cuppa and have a relaxing read!
What is a Value Proposition?
The Business Model is split into 10 segments: purpose, customers, value proposition, revenue streams, channels, customer relationships, activities, resources, partners and cost structure.
In a nutshell, the Value Proposition tells your customers why they should buy from you, the problems you solve and the benefits of using your business.
HubSpot places great importance on having an effective Value Proposition; “A great value proposition could be the difference between losing a sale - and closing it.” So, spending time creating one that works for your business should be a priority.
In essence, your Value Proposition should meet a customer’s need or fix something for them. It needs to explain why your products or services are of value to a particular customer segment.
Your Value Proposition is the reason customers will choose you rather than a competitor and is an essential component in your business strategy and planning toolkit.
How do you create a Value Proposition?
Think USB rather than USP!
In marketing a lot of emphasis is placed on developing a Unique Selling Point (USP).
Here at Be Rescued, we think you should also be spending time on your business Unique Selling Benefits (USBs).
Customers will come to you because of the benefits they get from using your products or services. Always think - what’s in it for my customers, what do they get out of it? Ask yourself - how will my products or services improve things for my ideal customer.
So, to create a Value Proposition:
Think USB first – list all the specific benefits your products or services offer customers and why they are of value. To create a Value Proposition, identify a problem your customers have and how you solve it for them and make things easier. That’s the value right there!
Your Value Proposition will set your small business apart from your competitors and explain why someone should buy from you. You want to make it easy for potential and existing customers to see why you are the best choice for them.
If you want to run your USBs past a Strategy and Business Planning Consultant contact Maria at Be Rescued.
The importance of knowing your customers
Customers are the first segment in the Business Model and understanding them is crucial to creating a Value Proposition. You need to consider your ideal customer and what problems your products or services solve for them.
If you haven’t already done so for your business, create customer personas. Look at their lifestyle, spending power, their dislikes, their characteristics, and behaviour. If it helps to visualise your ideal customer, give them a name. Some business owners find it helpful to run decisions past their customer personas - asking ‘would Sarah like this’?
You should regularly update any information on your customers. Understanding them is not only crucial to creating an effective Value Proposition but the overall success of your business depends on knowing your customers inside out.
Your Why?
Your Why is inextricably linked with your Value Proposition and motivates customers to purchase from your business.
Author and Inspirational Speaker, Simon Sinek says: “People don’t buy what you do; they buy why you do it.”
Your WHY is at the heart of your business - it helps you formulate your Value Proposition and so much more…
Getting in touch with your WHY will help you reconnect with your purpose and get a deeper understanding of how you help customers and the benefits you offer. You can feed this into developing your Value Proposition.
If you need help distilling your Why, Maria Pombo at Be Rescued can help. Get in touch to find out more about how we can support your business.
Getting the message out
Communicate your Value Proposition across your digital and traditional marketing channels. It’s the very essence of why people should buy from you and not your competitors.
When customers arrive on your website, they need to know why your business is right for them and why they should choose you. Help them to see your business as the best choice by highlighting the benefits you offer and the problems you solve for them.
A great Value Proposition will help you increase brand awareness, customer engagement and revenue. A win, win for your business!
A Value Proposition is crucial for small businesses.
Strategy and planning for your small business
If you need help creating a Business Model or Value Proposition do get in touch with Maria. At Be Rescued we specialise in helping small and micro-businesses with strategy and business planning - we’d love to help yours.