Welcome to Module 2 which will cover the business value proposition! If you are just joining us, we recommend you start with Module 1: How to Write an Application 101.

Overview

A startup's success hinges on its ability to communicate an effective, concise answer to the three key questions: what do you offer? Who will benefit from it? How are your services distinct or advantageous compared with other potential solutions? In today’s fiercely competitive market of time-strapped audiences, startups must be able to clearly articulate why their product is a superior choice. The best way to address these questions is developing a strong value proposition.

What is a value proposition and why is it important? 

What is it about your business that sets it apart from competitors? Why do you think your product/service is relevant to your customers? Why should they pay for your product/service? A value proposition highlights all of the above. 

Your value proposition provides the opportunity for you to communicate the uniqueness of your business. It is important to highlight the solution you promise to deliver to any person who decides to buy either your product or service. Your value proposition:

• Clearly explains how your product/service fills a need for your customer

• Communicates the specific added benefit of your product/service 

• State the reason why your product/service is better than that of your competitors

The ideal value proposition is concise and appeals to a customer's emotions - it should be persuasive enough to turn a prospective customer into a paying customer (and make a paying customer return as a repeat customer!)

A short, clear value proposition can stick in the minds of investors, potential customers, friends, and relatives, ensuring your brand's value isn't lost in translation.

A compelling value proposition meets three criteria:

1. It’s specific: What are the specific benefits your customer gets from using your product/service?

2. It’s pain-focused: How will your product fix the customer’s problem or improve their life?

3. It’s exclusive: Does it clearly highlight your competitive advantage and set you apart from competitors?

Before crafting your business value proposition ask yourself these questions:

1. What is my business offering?

• The very first step in crafting your value proposition is to ask yourself what products and services your business offers? How does this benefit your customer, and what is the ultimate purpose of your business? Answering these questions will help you define what you are really offering to your customer and grasp the value of your business within your industry.

2. Identify your customer’s main problem

• Your value proposition is not written for you; it’s written for the people you want to do business with. Therefore, you need to first understand your customers. To understand how valuable your products/services are to your customer, you need to identify their challenges and pain points. (If you don’t know, talk to a potential customer and ask them!)

3. What other companies compete with my business to do this job for the customer?

• Who are your competitors and what are they offering? As a business owner, you should know the strengths and weaknesses of your own business and also that of your competitors. Competition always exists in business; you won’t find any business where there isn’t any competition. Knowing your competition will help you understand your uniqueness and help you better position yourself to serve your customer.

4. What sets my business apart from those competitors?

• Identify your unique values and attributes - if you want to stand out from the competition, you need to effectively communicate how these benefits you have already highlighted make you different. Your unique values could be based on quality, price, service, reliability, communication, etc.

5. Connect your values to your customer’s problem

• Once you have identified the unique pain points of your customers, you will be able to match your product/service benefits to them. With the list of your customer problems in hand, put them in order of importance. Then, go back to your key benefits (based from step 1 and 4) and circle every benefit that relates to your customer's most crucial problem. If you can clearly identify how your products/services resolve an issue or fill a hole in your customers’ lives, you are well on your way to crafting a strong value proposition.

6. Now craft your value proposition

• There isn’t one single format for writing a value proposition. It may contain two sentences or just a headline. It is, however, important that you communicate concisely but strongly enough to make an impact. For a value proposition to effectively turn a prospective customer into a paying customer, it should clearly identify who the customers are, what their main problems are, and how your product or service is the solution to their problem.

Finally, your value proposition should lie at the core of your business - it should ultimately define what you can offer to your customers. Without a value proposition, your business is likely to lack direction for further development. Crafting a compelling value proposition doesn’t need to be overwhelming, just do your research, highlight your benefits, and clearly articulate what makes you unique and puts you ahead of competition.

AWEC is an experiential, applied learning program, which means we promote business growth by having fellows immediately apply what they learn to their own business. We have created the following tools to help you apply the knowledge from this module to your business. We encourage you to download the tools below to strengthen your application AND your business!

Well done to you for completing your second module. You can now move on to Module 3: Customers.