To put it simply, the ability to sell your products is all about perceived value. The benefits of your product or service are subjective, and mean different things to different customers. You need to find out which of those benefits are perceived to be most important. In laymen’s terms, a value proposition is the difference between perceived benefits and perceived costs for the customer, which determines their motivation to purchase. If the benefits outweigh the costs, the buyer will be motivated.
Ultimately, your value proposition determines your conversion rate. It is what (the product or service) you are offering, how it is perceived by customers, and why they buy from you. So have you clearly defined your value proposition, or is there a disconnect between what you are selling and what people are buying?
It’s all about perception.
There are different methods to determining your value proposition. But, certainly, in order to sell your product or service, you will need to articulate its value. Remember, what matters most is ultimately what your customers perceive.
A Forbes.com contributor suggests that the process of developing a compelling value proposition consists of three stages:
Identify customer benefits. Put yourself in your customer’s shoes and identify, from their perspective, what value your product holds. Collaborate within your organization to create an accurate list of benefits. Be careful to distinguish between what the company believes are the benefits and what the customer perceives as the benefits.
Link benefits to mechanisms for delivering value. Businesses deliver value in some combination within three areas of differentiation – cost, technology and service. These include many value delivery mechanisms, including warranty, performance, time and accessibility. Identify which areas your product benefits fall into to differentiate from your competition.
Map value proposition. Create a chart with an axis for each of your three points of differentiation. Identify your strengths, the points of parity with your competition, what your customers desire and what you can deliver that your competition can’t. Build a value proposition statement on what you do best.