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Startup Value Propositions – What and Why?

You have a brilliant idea. You formulate a development plan and produce a great product. And then what? Success is not automatically guaranteed, even for the most innovative new tech. Trend leaders like Uber and Airbnb had great products, but they also offered a well-articulated and lucid value proposition (VP). Many experts believe that formulating this VP is the key to real business success.

The most successful VPs lay out clearly the function or nature of the startup and why it's uniquely qualified to solve existing consumer problems. If you can't come up with a compelling and unique statement of your company's VP, then you may struggle to attract customers and engage the attention of potential investors. Ultimately, you might also miss the chance of eventually scaling up to major success.

Some academic research suggests that the VP is the essence of good strategy and a company's "single most important organizing principle." These researchers also discovered that "less than 10 per cent of companies formally develop value propositions." In order not to join the majority who fail in this respect, here's what you should do to build a clear and compelling VP that could take your startup smoothly to the next level.

Five Steps to your Future

1. Identify your Target Audience

When you developed your product, you probably had a fairly good idea of who your customers were, but now it's time to be more specific. Take a closer look at the demographics of your target market, including primarily:

  • location
  • gender
  • employment status
  • income

Once you have better details, you can craft a more directed VP, more precisely attuned to your consumers.

According to some experts, in order to to assess and define your target market properly you should examine your existing customer base. You need to find out who your current customers are, what they're buying and why, and especially why they're buying it from you instead of someone else. Can you identify any shared interests or characteristics that might indicate why they appreciate your particular product or service?

You also need to take a look at your competitors to find out why they're not attracting customers away from you. Do they have a different angle, or have they maybe overlooked a niche market demographic? Once you know more about your target audience and gain a better understanding of their needs, you'll be better equipped to construct a VP that is more closely aligned with consumer preferences, values and beliefs.

2. Customer Pain Points

It's also important to know what problems customers have and how your product or service can solve them. Draw up a list of specific pain points mentioned by customers, and show clearly how solving them helps your target market, and increases the value of your business.

Many marketing experts believe that customer conversions can be maximised by split-testing, sometimes by over 50%. Running a quick A-B comparison of VP headlines can easily determine how clear your message is.

For example:

  • Company A offers to "Quick Fix your PCBs"
  • Company B suggests "24-hour Turn-Round for PCB Problems"

Which one are you most likely to choose?

In marketing surveys, Company B will attract significantly more consumer interest because it directly addresses a specific issue of value to customers – their time. When responding to customer pain points, it's important to read the small print.

3. Determine Your Startup's Unique Differences

Step three is to turn the spotlight on your business strengths, and identify what uniquely differentiates your startup from your competitors. Do you supply some particular feature unmatched by any other company? Maybe your proprietary tech runs a software algorithm with unique results that only your startup delivers? Do you field an unusual or unconventional methodology that is of special value to your customers?

Identify what makes your business unique and decide whether it makes sense to highlight that strength in your VP. If you find yourself unable to come up with anything that makes you stand out from the crowd, it's time to revisit your Minimum Viable Product and find something that does. Remember that viability in a product only means delivering sufficient value to the targeted end user, so that they are willing to try your product over others.

4. Research Consumer Language

The purpose of the VP is solely to engage your customers. Avoid all buzzwords, industry jargon, and boring tech details, and don't try to second-guess what language is used by your target audience, but do your due diligence in research. Send out surveys, conduct focus groups, join forums and check out social media to learn how your consumers speak about your product. Make note of speech patterns such as frequently used phrases, words and syntax that you can incorporate into your copy.

5. Write the Unique Value Proposition (UVP)

When you've completed your due diligence, you can begin writing your startup's UVP. While there is no obligatory template, the following elements should be included:

  • Headline: Invoke curiosity or emphasise a unique benefit
  • Subhead: Describe your product, its target audience and why they'll be interested
  • Bullet Points: List three key product features or benefits
  • Visual: Support your text with a 'hero shot'

Startups evolve rapidly, and you'll always be discovering more about what is of value to your customers, so it's a good idea to revisit your UVP every 6 to 12 months to keep up with any changes.


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