We recently held a webinar on How to Build Your Best Value Proposition. One thing we did first in that webinar was to take a step back and examine what value is when used in this context.
I think this is important for a couple of reasons. First, value can mean many different things depending on what you are talking about. The second reason is that building a good value proposition is extremely challenging for most of us and can help us gain more clarity on what the word ‘value’ means.
I looked up the word ‘value’ on the internet, and this definition best aligns with what ‘value’ means when talking about value propositions.
regard that something is held to deserve; the importance, worth, or usefulness of something
And I think the keyword in that definition is the word “worth.” Your value proposition is your worth in terms of what you have to offer your customers.
One way that I try to explain this in the webinar is to consider a 100-dollar bill. We all know what that’s worth because we know what we can buy with it. The physical value of a dollar bill is worthless because it is just a small piece of paper with almost no functional purpose. But it definitely has value because it can be exchanged for a certain amount of goods or services.
The amount of goods that you can exchange the bill for is its value. And its value proposition is that it can help you obtain that amount of goods or services.
And that is easily understood by us that we almost miss the point. So let’s change it up so we are an alien who just arrived on Earth and is seeing a 100-dollar bill for the first time. We do not immediately know its value and value proposition. If you were to explain to me what a 100-dollar bill can do for me, you would be sharing its value proposition.
And that hypothetical scenario can help us when we think about our own products. We talk about the products we sell so much that it is like the 100-dollar bill to us – we know exactly what our product can help our customers to do. But our customers are aliens, and they see your product the same way that an alien would see a 100-dollar bill.
You need to explain the value of your product to your customers in the same way you would explain the value of a $100 bill. When you figure out what you need to say for that, you may have found your value proposition.
