It’s important to know the value of your business offerings

Editor’s note: Michelle Stockman works with Little Rock-based Arkansas Capital Corp. to promote entrepreneurship development around the state. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each week on The City Wire.

Value proposition is a seldom discussed idea with the majority of business owners. However, it is a concept that every business owner needs to be aware of and develop for each product/service the business offers. Value proposition is the basis for marketing plans, communications, sales and mission/vision statements.

Value proposition is a “statement that summarizes why a consumer should buy a product or use a service.” This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings. According to Investopedia, “companies use this statement to target customers who will benefit most from using the company’s products, and this helps maintain an economic moat.

The ideal value proposition is concise and appeals to the customer’s strongest decision-making drivers. Companies pay a high price when customers lose sight of the company’s value proposition.

The creation of a unique value proposition is not as simple as one may think, says Natalie Hart, a conversion analyst with FutureNow Inc. Hart says she has recently taken on a few new clients who had no value proposition at all, and were having a difficult time creating one.

To help them and others like them, she offers these ideas to create the best possible value proposition.
• Brainstorm: “What do we do best?”
For this exercise, Hart suggests polling everyone in your organization.

“You’ll be surprised at the variety of answers you get,” she says. If you’re finding that this question is drawing some blanks, she recommends asking the most basic question: What do we do?

• Brainstorm: Why did you start doing what you’re doing?
“Chances are you saw a need in the market and decided to seize the opportunity,” Hart offers. “Did you think you could do it faster, cheaper, better than your competition?”

• Ask your customers
They’ve already decided that you were the right choice, Hart notes, so ask them, Why us?

“Even better, this can be parlayed into a testimonial — two birds with one stone,” she observes.

Once a clear picture begins to take shape from your investigations, develop a strong value proposition statement. Even better, can you distill in 140 characters (a Tweet) or less what is the value of your product/service?

Once a business derives at a value proposition, the business owner has a clear path on how and who to reach out to in growing a customer base. Additionally, knowing your value guides you in understanding how to leverage your value in growing the business.

The value proposition is a simple concept that stumps the best of entrepreneurs at times, yet has so much power in growing any business. Start the New Year in knowing what value your business brings to the world and utilizing that knowledge to focus and grow your business in 2010.

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Stockman can be reached at [email protected]