Know Your Value Proposition and Watch Your Income Soar!

(Originally Published in the Piedmont Business Journal, July 2012)

Everyone in business, including for-profit and not-for-profit entities, needs to understand the concept of a “value proposition.” In simple terms, a value proposition is a statement that convinces someone that you are the one to call, the place to go, the must-have product, or the “go-to” resource. A value proposition differentiates you from your competitors and answers the question: Why should I buy from YOU? For not-for-profit organizations, the question becomes: Why should I donate to YOU (money and/or time)? A value proposition focuses on the results and benefits of buying from YOU.

As we go through our daily lives, we constantly make choices based on our preferences and needs. For example, let’s say you need to go to the grocery store. Which one will you choose? The one closest to your home? Or, will you drive to the store with a huge selection of organic produce and the unique gourmet aisle? Maybe you will opt for the one with the lowest prices. And, once you’re there, what products will you select? Why?

The result of a mutually-beneficial value proposition!

The result of a mutually-beneficial value proposition!

Each of these decisions is prompted by an awareness of the VALUE you believe you are receiving from the purchase. A good value proposition states the benefits and results (outcome) of purchasing from you and is heard clearly by folks eager to buy, i.e., your target market. A good value proposition triggers an emotional response that compels a prospect to buy from you. A good value proposition helps to position your business as the top in its field.

Examples of Good Value Propositions

Marketing firm for small businesses:
Our customized strategies expand your reach in the key markets you desire, the ones that need to hear your voice. Our proven approach helped one client grow his business 300% in three months and become cash flow positive for the first time ever!

Fitness instructor:
My clients achieve their ideal weight and show toned sculpted bodies within 3-6 months of working together. One just celebrated her 25th wedding anniversary on the beach with her husband – and she wore a bikini with pride!

Financial advisor:
I help families grow their wealth, send their kids to college, take their dream vacations, and retire early with confidence. Several of our clients have been with us for generations.

What is the result of a great value proposition?

Money, and lots of it! I know this firsthand.

When I started a high-tech staffing and consulting firm in 1998, my marketing was all cold call sales. After introducing myself, my initial pitch went something like, “we offer information technology consultants to meet your most pressing needs in network infrastructure, programming, systems administration, and web development.” Hmm, where is the value proposition? Not surprisingly, I received many rejections and even some hang-ups!

After several months of only a few placements, I shifted my pitch to the following: “We are experts in web portal development using a Microsoft NT platform and excel in meeting ambitious deadlines and making your investment partners smile.” Within 6 months (and I hired only one other person), we made $2.1 million in revenue! Why? We narrowed our focus, clarified our value proposition, and spoke in words that resonated with Chief Technology Officers and Project Managers.

Elements of a Great Value Proposition

In general, there are five key elements to a great value proposition, it:

  1. Generates interest. Gives a prospect a reason to explore you more fully.
  2. Shows results and benefits. Establishes your credibility and provides evidence of your expertise.
  3. Evokes an emotion. Most people buy based on an emotional response to an offer. You are relieving their pain, providing pleasure, and giving them something they crave.
  4. Is unique. Highlights something that separates you from the others. This may be a specific approach you use, a proprietary product, exclusivity, your background, lowest price point, or other distinguishing factor.
  5. Speaks to your target market. Be sure to use words and examples that resonate with your target market.

And remember, businesses are dynamic and products, services, and your target market may change over time. It is important to regularly examine your value proposition to be sure that it reflects your current offering and still speaks to the folks you want to serve. Good luck and happy prospecting!


Shari Goodwin owns Jaeger2, a business consulting and leadership coaching firm and helps entrepreneurs prosper in their passion and achieve their big goals. She is the founder of Alpha Horse Leadership Training for HUMANS™, a unique equine-assisted leadership program. Shari can be reached at shari@jaeger2.com and Jaeger2.com.