Relevance of value proposition to an SME
A value proposition refers to the value a company promises to deliver to customers should they choose to buy their product. A value proposition is part of a company's overall marketing strategy.
The value proposition provides a declaration of intent or a statement that introduces a company's brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business.
There are some simple but highly important elements of a successful value proposition. These are relevance; quantified value, and differentiation.
People buy a product or seek a service because they want to either solve a problem or improve a situation. It is, therefore, the duty of the business owner to explain how your product solves customers' problems or improves their situation. For instance, in the Graphic Business newspaper, we have created a new simple column that defines and explains simple business and economic concepts to our readers. It is true that one can easily google to find the meaning but while reading that paper, readers get the opportunity at once.
Particularly, for tertiary business students and small businesses, some of the topical words or concepts used during the week that they heard but could not understand, its defined and explained. Again, the paper has been able to add new elements such as Side Bars, Inforgrapgs, among other things, to give some extra information or illustrate a situation in a graphical manner. “Never underestimate small things. It is the small things in life which count; it is the inconsequential leak which
empties the biggest reservoir.” - Charles Comiskey.
Every customer buys a service or product because they want some very specific value. For instance, the business owner must be in the position to explain what is in the service or product the customer cannot see but will want to buy. This means that the business must at all cost be able to deliver specific benefits.
JJCOBS is a poultry farm in Gomoa. The company is focused on selling eggs. This is not a new business because there are many more in this competition. But JJCOBS, with a tagline-- “Our chickens lay eggs” has more customers because it is focused on ensuring that the eggs are bigger than competition but sells at the same price. It is highly nutritious because of what the birds are fed with. Displayed in the malls, supermarkets and even with the hawkers on the streets, they have more market simply because their eggs are bigger at the same price compared to competition. Again, the shells are strong compared to competition and cooks faster. This means, one is able to save a little more on time and fuel used in cooking. All these values are quantifiable and once communicated and experienced, the market accepts it and even with word of mouth, you can sell. Create value for the customer but let him be able to quantify the value.
If there is nothing new under the sun, then as a business owner, it must be made clear that the service or product you offer is either already on the market or will soon be out because yours is out there. This is why the business owner must be able to tell the ideal customers why they should buy from you and not from the competition. Something must make your product distinct and it could be based on the following strategies:
Emotional Response- This relies on providing an emotional salience that is tied to a product or service. Usually, brands that develop an emotional connection with their customers are often better positioned than those that provide a superior value.
Innovation - This can be expressed through physical characteristics of the products or the way in which a product or services is delivered. In short, this differentiation solves an unmet need in a unique and novel fashion.
Brand presentation - How a brand presents itself to the market can be a differentiator. In this case, brands that employ a consistent character or mascot can be easily remembered and stand out in the crowd.
Unique experience - This can be manifest in several ways such as a brand’s physical retail presence, exceptional customer service, ease of use of their website, the novel environment that they create, or, simply, the experience of unboxing a product.
Pricing - When handled properly, this can also be an effective approach to differentiation. On one end of the spectrum, a company can strive to be positioned as the ‘low price leader’ offering customers outstanding value.
In today’s hyper-competitive business environment, consumers are inundated by advertising and faced with a plethora of product and service choices. This is making it tough for brands to stand out. But to grow and be successful, it is imperative that business owners try to distinguish their products or service in this crowded marketplace.