Every manufacturing business exists within a world of competition, where differentiation is critical. How do you stand out? How do you ensure your customers choose you over the rest? The secret to this lies in your value proposition, the heart of your business. This important statement is not just about what you offer but why it matters.
Your positioning statement tells customers succinctly why your product or service will better serve them than any other product. Value propositions can be used to differentiate yourself from the competition, but they should always center on the customer and their perception of value. As such, a value proposition should be the starting point for any discussion of brand strategy or taglines; however, these are not the same.
In today’s competitive market, a well-crafted value proposition is a foundation for all your marketing efforts. If you focus on how you help your customers and with which problems or pain points you help them, you will be able to better address these aspects in your marketing content, which improves the likelihood of your business being able to attract and retain customers.
In this article, we’ll cover how to identify your competitive advantage, how to craft your value proposition, guidelines for a strong value proposition, and how your value proposition may evolve.
Identifying Your Competitive Advantage
The Cornerstone of a Strong Value Proposition
Before determining your competitive advantage, you must understand what it is and why it’s important. A business’s competitive advantage is the factor that lets the business create better or more affordable products than other options. Numerous factors, such as pricing, branding, product quality, distribution channels, intellectual property, and customer service, contribute to a business's competitive advantage.
Comparative advantage and differentiated advantage are the two basic forms of competitive advantage.
When a business can create goods more effectively and cheaply than its rivals, it has a comparative advantage.
A business has a differential advantage if its products or services are seen as superior to its competitors. Differential advantage is driven by innovative technology, patented goods or processes, exceptional employees, and a well-established brand identity.
So why is it so important to have a competitive advantage for your value proposition?
When a business establishes a sustainable competitive advantage, it distinguishes itself from rivals while also benefiting its consumers and other stakeholders. The firm may increase its sales, income, and profits by creating a product or service that consumers want that is superior to the alternatives on the market.
To identify your competitive advantage, you can use a variety of techniques. One technique is market analysis.
Market analysis is an in-depth evaluation of the consumer base and the level of competition in a certain market. Using the results of this study, you can anticipate how well customers will receive your brand and its products in the market. Consider both quantitative data, like the size of the market you hope to serve, and qualitative data, such as customers' values, desires, and purchase motivations, while doing a market study.
Another technique is analyzing your customer feedback. Take a close look at what people say makes your business special. Is it your customer service? Your affordable products? The high quality of your products? You surely have happy customers, so see what they love about your business and use that information to guide you.
A third way to figure out your competitive advantage is by comparing your business with your competitors. Compare your prices, products, website, and other things you offer your clients and customers. What are you doing better than other businesses in your niche? That can be your competitive advantage as well.
Guidelines for a Strong Value Proposition
To construct a strong value proposition, you should focus on clarity, uniqueness, and resonance with the target audience. These are the three pillars of a strong value proposition.
Clarity: How To Make It Easily Understandable
If your value proposition is too complex, your customers may have trouble understanding how your business can help them. A good value proposition describes how a product solves a problem, how that problem is solved, and what makes the product superior to others on the market. The best value proposition gets right to the point and speaks to the customer's primary motivators for purchasing.
Uniqueness: How To Differentiate From Competitors
One of the easiest ways to ensure your target audience understands what makes your business better is to emphasize what you do better than your competitors. Whether you’re dedicated to speedy customer service, you devote your time to making long-lasting products, or you offer the most affordable products, you can highlight that to make yourself stand out.
Resonance: How To Connect Emotionally With The Target Audience
Building an emotional connection with your target audience is crucial to ensuring they will choose you and keep coming back. Find out what your customers care about the most, and then craft your value proposition in alignment with those feelings.
The Evolution of a Value Proposition
Keeping It Compelling And Relevant
A value proposition should be dynamic, changing with your business and customers’ circumstances. If your business grows, your niche becomes clear, or your target audience has a new pain point, these should affect your value proposition. If your value proposition has been the same for years, it’s time to look at it and consider updating it!
Strategies For Evolving The Value Proposition
You need to update your value proposition and know how there are two distinct things. To that end, here are a few tactics you can use to know when your value proposition needs to be adjusted.
Regularly Reviewing Customer Needs
There are many ways to review customer needs, from surveys and social media to product reviews. You should conduct this customer needs analysis anyway, so integrate your results in your value proposition updates.
Adapting To Market Trends
Keeping your eye on the market and staying ahead of the curve is another way to have a powerful value proposition. Companies must constantly adapt to new trends and customer preferences to survive in today's dynamic business environment. Being nimble enough to adapt rapidly to shifting market conditions and consumer preferences is essential.
Continuous Feedback Loop With Customers
The best way to understand the elements that set your business apart and give it a competitive edge is to constantly communicate with your customers through reviews, messages, surveys, and more.
Brands That Evolved Their Value Propositions Successfully
In the early aughts, Starbucks positioned itself as a “third place,” AKA somewhere to be aside from work and home. This worked for years, but after the Great Recession, consumers were spending less and turning to other, cheaper options like McCafe to save money. They changed their value proposition to assert that their coffee was of the highest quality and was worth the extra money. It was a huge success.
With the rise of body spray brands like Axe, Old Spice was losing footing in the market. Its audience was aging, and it needed to recapture younger customers. A clever ad campaign with the NFL player Isaiah Mustafa helped them regain their footing as a popular soap brand for younger people.
LEGO has traditionally been associated with imagination. Despite brand dilution, over-extended product lines, and excessive expansion threatening the business's financial stability in the early 2000s, the business's dedication to innovation helped save the brand.
2004, after a management change, LEGO Ideas was launched as a novel method for crowdsourcing product design. Since then, over a million users have contributed ideas to the crowdsourcing website, and their fellow followers have voted on the best of the bunch.
Get A Comprehensive Marketing Strategy Assessment
A well-crafted and dynamic value proposition will help your business get a competitive edge over other businesses in the market. Maintaining customer communication and the market can help you evolve your value proposition. Many businesses have evolved their value proposition, branding, and marketing to gain lost ground and even new footholds in market share.
Getting an accurate idea of how things work can be difficult when it's your business. Often, you’re just too close to the work to get an unbiased view of what sets your business apart. A marketing assessment from an objective third party, part of a holistic business growth assessment, can provide a clear view of your value proposition and how it can evolve.
Schedule a meeting with Krista to get your comprehensive marketing assessment and create a powerful value proposition that will grow with your business.