Value proposition: what it is and how to elaborate it
Aspects such as new competitors, cultural issues and market trends can destroy the added value of your product or service.
Surely you have been asked these questions in spaces for the request for capital, most likely in the presentation of a pitch before possible investors or in the delivery of a project to request funds.
Of course! How not to know, you have always had the conviction of having a fairly clear idea of what your product or service is and therefore you have very well defined what makes you different from others. It is what minimally all companies must be clear if they intend to sell a product or service. But be honest, what makes you unique from the other players in the market, especially in the international arena?
It is surprising when sometimes, as part of my job, I ask companies about their value proposition finding very common answers such as product quality, benefits from trade agreements, customer service and compliance. Now I want to clarify that I am not downplaying these variables, which are of course important and relevant in any proposal that you want to present to a potential client; However, the question has crossed your mind, how many suppliers located in different parts of the world offer the same benefits in general from each commercial proposal presented?
If you haven't, please do so before answering. What makes your company different from others? Variables such as those listed above may not answer this question, and instead may be the reason why your proposal is attractive to us, limiting the growth of your business, obtaining new clients or attracting attention to potential investors.
When looking for answers to these questions, I have identified that companies commonly define the differentiation of their products and / or services under their own and personal criteria. To put a very simple example, I take a reference to a mother who, if you ask about her child, will always have in her mind a description that will project her perfect little one even though some people do not see it that way from the outside, and it is there where the magic happens. Outside, if it is possible to leave behind the own sensation and the perception of other people will be considered for a moment, especially the side of the market where the product and / or service is directed, it will very surely be possible to find all the answers for the construction of a proposal of firm, differentiated and winning value compared to others. Of course it will not work with the example of a mother, where her child is and will remain perfect regardless of what happens outside or what others think.
- To know more: How to use design thinking, the canvas and the Lean method without getting lost in the attempt
Now, if we manage to focus attention from the opposite side, which in this case is from the perspective of the customers who are ultimately the ones who buy the products and services, since we cannot forget that they were created for them, defined characteristics will be obtained: good and bad. with a real and objective perception of what the product or service is really giving them.
Alex Osterwalder, Yves Pigneur, Gregory Bernarda and Alan Smith authors of the book Value Proposition Design and a team from the renowned consulting firm Strategyzer assertively approach the Creation of Value through two key components of the business model: Segment of market and value proposition, taking into account key elements between the company and the client.
What makes your company different from others? / Image: Depositphotos.com
On the client side, variables such as: Client's work, Client's frustrations, and Client's joys are analyzed. On the company side, variables such as: List of products and services, Frustration relievers, and Joy creators are analyzed.
The objective is firstly to put ourselves in the place of the client to identify key elements in front of the perception of this, which later allows to cross with the related factors of the company to generate the FIT as a result of both sides. The above will determine how close we are to the real needs and interests of the client and finally achieve a value proposition according to the needs and perception of the client.
And it is there where we really must pay full attention to the needs of the consumer, many times we focus on achieving the objectives in front of the goals we intend to achieve and we forget the emotions of the real person behind. The key is that the client does not feel that a product is being sold to them in a transactional way, as this really tires and removes the possibility of the client staying with our proposal. It is important to internalize and make our clients feel that we care about them and seek to be part of a solution to their needs.
We are human beings and regardless of whether our target market is companies, behind the companies there is a human being and we negotiate with people, not with companies. If we have this as a starting point, the human being is emotional and will always be looking for experiences, empathy, stimulation, balance, etc. Achieving the understanding and understanding of the real needs of the clients will allow us to give us light, empathy and coherence to make a perfect fit between the products and / or services offered to the client.
How to build your value proposition to present it to your clients?
To build your value proposition in the international market, I recommend taking into account the following suggestions:
1. Define the customer segment to whom your product and / or service is directed, this is key and the generation of the value proposition will depend on it 100%.
2. Think about your customers in the target market that you intend to address internationally. What is important to them? What is the problem or need that you seek to solve? How does your product or service contribute or solve this problem?
3. Listen to your customers; do not play deaf because of more feelings of anger or frustration that may generate a negative opinion from consumers. Those opinions are relevant and key to improving the product and / or service. If you have appointed a distributor or an agent, ask for their opinion, conduct surveys, invite your internal and external customers through comments on social networks or surveys. Make a list and analyze those opinions that can be repeated and organize them by priority that allows you to work on improving and solving them.
4. Analyze your international competition frequently. Remember that the global is no longer a fight with the local neighbor that makes life impossible for us. Be clear from the first moment that when making the decision to sell in the international market you have adversaries of all levels in any part of the world and even more so you should be clear about your value proposition. Competition is a valuable and key tool. Don't see them as enemies; learn and value their work, focus on what you know how to do best, see them as allies and key input to improve your product and position in the international market.
5. Take the time to do the value proposition exercise. It can be the difference between leading you to success or staying put. Do not limit yourself to quality or price, create value that allows you to improve your margins, recall and perspective by the customer.
6. Your value proposition changes according to your market segment and distribution channels. Keep in mind that a distributor may have different needs than a customer with a retail format. The value proposition changes if your market segment and channels are different in their business model.
7. Yes it is! The Value Proposition may also be different in each country or target market, so start working on it before continuing and be very clear about the message you intend to convey in the international market without leaving aside the culture and idiosyncrasies of each country. .
Now that you have taken the time to read this article, answer the following questions: What is your differentiating characteristic? What makes you different from your competition? Have you defined your Value Proposition in the International market?