A simple 10 min read showing how you by making adjustments in your value proposition will attract more potential clients, grow your business and eventually make more money.
What is a value proposition? How can it help your business specifically? Does it all sound a bit theoretical, complex and not really relevant to your little business? Well it is, but we do agree that the more practical it gets the better it is for you and your scarce amount of resources maybe both time and money wise. Therefore, this will be the first of a series of articles focused on topics relevant to make your business thrive.
What entitles us to tell you what you ought to do and what not? Well legally nothing actually (our disclaimer) so we won’t guarantee anything else but inspiration.
Nonetheless have we over time done all the trials and errors ourselves and we still keep learning, but also have we spent uncounted hours helping other businesses to improve and to succeed at their doings. So, we just want to share that knowledge with you, so that you can overcome the same hurdles but faster and better.
Want to know more, keep reading…
1. Think about your value proposition
Basically your value proposition is what you have to offer, how you are going to offer it and what makes it desirable in the market. Here is a good definition:
“A value proposition is a business or marketing 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.”
Same same, but just refined a bit. So why is it so important to get the value proposition right? Well, it’s literally the core reason for people out there to notice and eventually choose you as a provider to satisfy their needs.
But at the core of every business you will find some main drivers, elements and motivators making the market even notice your particular business.
So whatever your idea is, make sure that there is an interest for it… a market for it… or, at least, a latent market for it. It has to create curiosity and in contrary to what many people out there say, it doesn’t have to be “The new thing”, invention or revolution. Just a twist to an already existing idea can be enough to make it interesting and market changing. Ok?
Let’s take the example of a tour business specialized in Architecture walks in Germany. Here is how a simple value proposition would look like for that business: “We offer all year round multilingual guided walks taking you to and explaining the secrets of all buildings constructed in accordance to the Bauhaus architectural style. Being architects ourselves, we can accommodate newbies as well as professional on our tours and we operate in Berlin and Hamburg. We have special prices for larger groups and can adapt the tours to the fitness level of the participants in terms of km’s and transport.”
An easy way to structure the value proposition is by adding some sort of framework to it. It makes it easier to organise and cluster all those thoughts and words that you usually attach to your idea.
Very good structures for that are actually marketing mix structures. The marketing mix can be defined as a set of marketing tools that the firm uses to pursue its marketing objectives in the target market. Using a marketing mix structure to develop and formulate your value proposition has the benefit, that you end up with a complete game plan for execution.
There are many frameworks out there. For the simplicity of it we will here stick to the most known 7P’s. And now we are getting to the practical stuff so stay with us.
2. Use the 7 P’s marketing mix
The 7P’s are comprised of:
Product, Price, Place, Promotion, People, Process, Physical Evidence
All of them are very helpful in defining your value proposition for one or several markets.
And a market is not necessarily a neighbour country but could be something as simple as the next parking lot or town, different age segment, private vs business customers, vegans, male vs female and so forth. A market is nothing else but a potential customer with a (slightly or mighty) differentiated need.
So not only do the 7P’s help you to define your current and original value proposition but it also helps you to alter it and thereby define new value propositions for addressing differentiated markets than the original intended. In other words, it can allow you to attract more potential clients, grow your business and eventually make more money. In theoretical terms you are establishing different marketing mixes to address different needs. Or in other words a great opportunity to grow.
For instance in a ferry company I worked for, we had a complete matrix of marketing mixes that we would update and refer to when addressing the different markets. And we had many. All were essentially making use of the same core product we had to offer, but it was always slightly altered, spiced up or down, differentiated or just “wrapped” differently to cater to the need and the preference of the targeted market. To be more specific we often added additional value to the core product (ferry crossings), like assistance, guides, supplementary services and products, special pricing and different marketing strategies and messages to the one and same product.
Note: By targeting and accommodating various markets simultaneously you need to take care of Customer Co-Existence. Some can’t and some won’t want to co-exist with others, and targeting both can potentially be fatal for your business.
So value propositions and hence marketing mixes are nothing but truly understanding the market you are targeting by reaching out to the right customers, with the right product, at the right time, at the right price, in the right way and at the right place. Got it, right?
As you might have noticed have we put the 7P’s into a circle called “Your Resources”. Reason for this is that as good as optimising your value proposition and adjusting you marketing mixes sounds, they require resources which, unless you are very fortunate, won’t have in abundance (something the dear academics giving us the frameworks don’t take too much into account). But for now don’t worry about the circle… we’ll come to it later on in the series.
Now that you have a basic idea about value proposition, marketing mixes and their importance, in the next article we will enter into more details on the first two of the 7 P’s. The Product and The Price.
We will give you a to the point read and tips on how to adjust and optimise those 2 P’s to attract more potential clients.
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So until next article next week, have a look at your value proposition. Does it need adjustment?
We wish you good business!
About the Author:
Christian Funck, M.Sc. International Marketing & Management
Christian is Interim Manager, Consultant, Entrepreneur and highly experienced and versatile Leader in international context. 15 years+ experience in analysing/elaborating/implementing business and marketing strategies in culturally, politically and economic “adverse” conditions.