A definition of a value proposition is a short summary paragraph that tells the customer what makes your company special. It is a promise to the customer the one thing that makes you stand out from the crowd.
Value proposition example:
“Doing Business With A Southern Handshake and New York Style
With Glenn Website Design you get more than just a website. You put your trust in us and
we make sure we earn it. We provide web design, company site management, affordable
website design for small businesses, SEO for a website, e-marketing,
branding for businesses and so much more.
All of this is backed by our 24/7 real-person service guarantee.”
This is hopefully conveying these points
- The tagline summarizes what we are about, friendly, modern, experts
- A promise to return the trust given to us by the customer
- Best web design service, SEO, and marketing
- Southern heritage – friendly one to one service
- Our technical knowledge goes beyond southern hospitality
- Fast and high-quality support – compared to other companies using robots and automated services.
Definition of a Value Proposition
How do you improve the quality of life of your customers? This is an absolutely crucial question that every online store owner should ask themselves. Not having a deep understanding of customer value puts you at a disadvantage early on. Every element of your business is likely to suffer, from website design to SEO and marketing.
Definition of a Value Proposition
Moreover, if this is just the beginning of your e-commerce journey, the more important it is to display what you have to offer to potential customers. Creating and testing your definition of a value proposition is likely to result in significant improvements in the value of your metrics, from your total conversion rate to average order value.
Definition of a Value Proposition
We believe that testing your value proposition should be the most important part of any eCommerce optimization strategy. All the time we find that testing a value proposition is producing amazing results (like for example one of our clients, who got a profit increase of 23%!).
In this article, you’ll learn how to create and test a value proposition that speaks directly to your target audience.
We will also analyze practical examples from online stores that are the most successful online.
What is a Value Proposition?
A value proposition is simply identifying the ways in which your company delivers value to its customers. It is an answer to the question that every customer on the Internet asks: “Why should I buy from you and not from your competitors?”
It details how you solve the main problems your prospects are experiencing and how you improve the quality of their service. The value proposition may refer to specific benefits such as fast and free shipping, or to more general emotional experiences such as the ease and convenience of shopping.
On the practical side, your value proposition should be expressed as a simple message specifying which problems your store solves, what is its positioning in relation to the competition, and highlighting its key features.
eCommerce value proposition
How are the Value Proposition, USP, Slogan, and Mission Statement different?
There is a lot of confusion around the terminology of this topic. However, there are really no exact definitions. In fact, terms such as “mission”, “slogan”, “USP” and “value proposition” are related and complement each other.
Let’s take a look at some key concepts:
USP – Value Proposition is not the same as a Unique Selling Proposition (USP) that addresses a specific unique feature of your online store. But your USP will be included as part of your value proposition in terms of the unique value it provides. For example, one of Amazon’s USPs is a one-click purchase. Definition of a value proposition is the customer value of this feature is ease and convenience.
Mission – a mission statement is a description of the company’s goals and philosophy addressed to the client. It describes what you want to achieve in the industry and how you would like to do it. For example, Microsoft’s mission is “To help people around the world realize their full potential.” Slogan – This is a short slogan, often in one sentence, that summarizes your value proposition as concisely as possible.
Both the mission and the tagline are important. Both are derived from your definition of a value proposition but are not a value proposition in itself.
What makes a value proposition perfect?
So how do you create a “killer” value proposition? A specific process is outlined below. First, however, we would like you to familiarize yourself with a short checklist that will help you get closer to your dream-winning combination.
Answer the following questions:
Does it speak directly to your market? – A good value proposition is based on a solid understanding of the psychographic and demographic data of your target group.
For example, promotions and perks that add value to a millennial customer are likely not to be as attractive to baby boomers. Always start by collecting solid data about your target group.
Does it contain what customers already expect? – what do customers expect from online stores in your industry? Do you listen carefully to your customers’ voices? Your value proposition should include the most important benefits that consumers take for granted. Failure to include these elements is likely to put you at a competitive disadvantage. For example, fast shipping, and easy return policy, and a rewards program are common in all major online stores.
Does it include at least one explicit Unique Selling Proposition (USP)? – the benefit provided by the USP is one of the strongest parts of the overall value proposition. You should have at least one unique selling proposition that allows you to set yourself apart from the competition.
Is your “blend” of values unique? – while you may offer many of the same benefits as other retailers, your “blend” should be unique. What do you offer that other sellers are missing?
Is your value obvious to the customer? – The answer to this question should be obvious – when a prospect sees your value proposition, they should immediately think, “Yes, this is exactly what I want!” Don’t complicate it unnecessarily. Your value proposition should be simple, clear, and clear.
Where should the value proposition be communicated?
The value proposition should be obvious to customers, no matter which page they land on. We recommend that you place your value proposition in at least these three primary places:
In header – Including a value proposition in the header, for example in the form of a slogan or the display of key features such as free shipping and returns (as Zalando does) gives you good visibility of your value proposition throughout your store and ensures that most customers will see it.
On the home page, the home page is actually the place to showcase your value proposition.
Create a great value proposition in five easy steps
Creating a powerful value proposition that matters is not easy. However, it is not impossible. Therefore, it is important to cover all the necessary elements.
Here’s a five-step process that we recommend:
- Define problems and nice touches present in your segment – Pay attention to considering both problems (such as expensive delivery and limited product choice) and nicer touches. A good value proposition not only “soothes the pain” but also gives customers “something more.” Many companies choose to donate a portion of each sale to charity. This does not solve the key issues for your customers but is a nice touch when buying.
- Focus on as yet unsaturated markets – Including in your proposition the value of elements that meet the specific needs of a certain niche allows you to win “easy wins”, significantly expanding your potential customer base. For example, many online stores, including Amazon, offer special discounts for students.
- Include Unique Selling Proposals – What unique values do you have in your online store? Moreover, what specific value do they bring to the customer? Warby Parker, for example, sends customers five pairs of glasses to try on for free, providing a choice through hands-on experience that its competitors cannot offer.
- Make a declaration of your value proposition – it all comes down to your value proposition declaration. After detailing the problems you solve and the benefits you offer, considering the insatiable markets, and identifying your Unique Selling Proposals (USPs), it’s time to put it all in a few sentences.
The value proposition statement is also useful for adjusting the day-to-day operations of the entire company to ensure that your proposition is met.
Use the following template to build a value proposition:
a. A declaration of several sentences that summarize the entire value proposition. This is where you communicate the key points of your value proposition.
b. Bullet points to outline your unique selling propositions, support features, and smaller benefits.
c. Small “detonator functions” that will keep you attractive to specific market segments and customers with unique problems (e.g. ability to ship to remote destinations)
- Combine store design, marketing, and packaging – How will new customers find out about your unique proposition? Does your slogan, marketing strategy, mission, etc. reflect your commitment to your value proposition?
More specifically, you will communicate your value proposition in the following places:
a. On the page – on the home page, in the header, and on the product pages.
b. In promotional material – such as newsletter, online advertising, discount offers, etc.
c. Whenever you have physical interaction with a customer – such as a package delivery.
- Don’t forget to test your value proposition! – This is an important point, and yet many people ignore it! Once you have put all the elements of your value proposition together, be sure to test it.
Here are some simple ways to evaluate the effectiveness of your new value proposition:
Conduct A / B tests on the website – Performing split tests, thanks to which you target different offers and messages to the same segments, allows for the best adjustment of the offer to the customer’s needs, especially if you cannot decide on one of the two options.
Organize a focus group – Individual feedback is often the best way to validate an untested value proposition. Organize a focus group of your ideal clients and ask them if your value proposition solves their problems.
- Online stores with an attractive Value Proposition: It’s always good to learn from companies that have already created fantastic value propositions. The success of these established and fast-growing online stores are largely due to the fact that their value propositions are so unique.
The opportunity to try many products on a market that has so far been dominated by expensive, high-class retailers who do not give their customers the opportunity to try many models without visiting an offline store.
Offers products made of high-quality materials at medium prices, while most of the competitor’s products are either high-quality luxury goods or low-quality, low-cost models.
If you’re in an industry where there is little or no product differentiation, then you need to work even harder to differentiate yourself in the e-commerce industry through your unique value proposition.
It has never mattered more than today when Amazon intends to absorb even more e-commerce market share – even if it comes at the cost of their losses. You may have to offer more than one thing to stand out. We offer Free Fast Shipping, Free Gifts Included with Every Purchase, and Hassle-Free Warranty claims for Any Problems. We’ve tested it – if we don’t offer the above-mentioned features, our conversion rate drops sharply.
Summary
A value proposition is fundamental to your business. A unique proposition gives customers a reason to shop and return to your store, and moreover, to recommend it to their friends and leave positive reviews. It will affect the entire business – including marketing, sales, and customer service. It will also help you create promotional materials and build a loyalty program that will directly respond to customer needs.
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