We recently held a webinar on How to Build Your Best Value Proposition and one thing we did first in that webinar is to take a step back and look at what exactly 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. And the second reason is that building a good value proposition is extremely challenging for most of us and can help to have more clarity on what the word value means.
I looked up the word value on the internet and this is the definition that I think aligns best 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 key word in that definition is the word “worth”. You 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 the value of that is because we all 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 that has just about zero functional purpose. But it definitely has a 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 can help you to 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 that we are an alien that came to Earth and are 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 be what a 100 dollar bill can allow me to do, you will 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 the alien and they see your product the same way that an alien would see a 100 dollar bill.
You need to find a way to explain the value of your product to your customers the same way that you would explain the value of a 100 dollar bill and when you figure out what you need to say for that, you may have found your value proposition.