The concept behind a value proposition is simple: figure out what you’re saying, why you’re saying it, and to whom you say it. But it requires nailing your messaging, and to do that, you have a ton of foundational questions to answer.
Take your product: what are its features? What about its benefits? How do those tie into your messaging and, crucially, which should you highlight when talking to your customers?
All of these questions come up on the product marketing side of running a startup, and the reality is that most people suck at that part of the game. I’ve been there.
Based on what we consistently see struggle and do well, here are six steps to create a value proposition that gets people to open their wallets.
Emily Kramer recently pointed out that only about 1% of venture capitalists (VCs) have any sort of marketing background. That means most VCs go into the marketing side of things blind, leading to bloated messaging that tries to hit every target available without really saying anything.
Let me give you an example: Airtable.
For a while, they had the following on their website:
“Connect everything, achieve anything.”
If I’m a potential customer, that statement tells me nothing about what Airtable is.
What does it connect? What will I achieve? There are no answers there.
Thankfully, Airtable’s value proposition is a lot clearer than it was – you’ll see if you visit their website. But this example shows that even successful companies don’t understand the key aspect of creating a value proposition: focusing.
Think of your messaging as the container that carries your product to the different market segments you sell to. That container needs to translate what your product is, what it does, and why it helps the market segment in a focused, easy-to-understand way.
In B2B, a persona could be a sales or customer success team within the business. It could be an IT department or even a specific individual, such as an IT engineer or director of sales. So, it’s either a team or an individual, and you must know your audience if you want to get your value proposition right.
In those cases, which persona do you target?
It comes down to how you want to slice your market. Are you going after SMBs, mid-market, or enterprise-level clients?
Or, you can slice based on use cases, such as searching for companies that are trying to do something your product allows them to do.
To start figuring out these groups, think about the context in which the potential client works.
What jobs do they need to do and what are they doing on a day-to-day basis right now?
Figure out what they’re achieving (or not achieving) with their current methods to lead you to the persona’s problems. That’s where the emotional side of your value proposition comes in. That reveals the problems they face – those problems create the opening for your product to enter the picture.
Think of a product category like the shelves in a grocery store: every item on those shelves is carefully arranged to help you find what you need. A grocery store wouldn’t put meat right next to fruit, for instance, because those items don’t fit in the same category.
In many cases, your product category will be a subcategory of an existing one. Sticking with my grocery store analogy, you may have a shelf that carries mustard, followed by another shelf with spicy mustard. The latter is a sub-category of the former, but it stands out and is differentiated from standard mustard.
Most startups are on the spicy mustard shelf – they’re creating subcategories of existing categories. Figure out what your subcategory is and slot your product onto the right shelf. Of course, some startups have products that don’t fit nicely into any category, which means you have to build a shelf and convince people to check it out.
Product capabilities unlock a door for your client. That door leads the client to something they can do now (with your product) that they couldn’t do before. It’s a zero-to-one concept.
As a basic example, a client who doesn’t have a car can’t travel long distances without public transport. If you’re selling them a car, you’re selling them a new capability to travel freely anywhere they like.
What does your product do that unlocks something for the client? When you answer that, you’ve found a capability to add to your value proposition.
Features are the pieces that power the capability. Using the car example above, the engine, steering wheel, braking system, and horsepower of the car are all features. They all play a part in the capability of that freedom of movement capability we defined in the previous step.
To use a real-world example, the notification you get from Venmo when somebody sends money to your account is a feature. It’s part of a collection of puzzle pieces that fit together to give the product its capabilities.
Features matter.
You may have heard otherwise from marketers telling you to focus on benefits ahead of features. But telling a client that they can get 10x their ROI (or something similar) won’t mean anything if you don’t share the features that drive the product’s capability to drive that ROI. Companies going after end users care about features. Make sure your value proposition contains them.
Benefits are the outcome of doing the zero-to-one action that your product’s capability allows.
Think about the big unlock here, as in the thing that changes for the client.
Does that unlock improve a metric inside the company? Perhaps it improves the end user’s emotional state by making them less stressed or frustrated compared to what they’re doing now.
Alternatively, a benefit could be the removal of an issue the client faced before. For instance, I worked with a company that guaranteed their client would get 100 more data points than they did before using the company’s ad platform.
That’s not a benefit, but a feature.
The benefit is that the 100 extra data points allow the company’s clients to run better ads. If they run better ads, they get more signups, which means they close more deals.
So, you can see how features link to benefits, with the features typically leading into something client gets that they didn’t have before.
Creating a compelling value proposition starts with a realization: you can’t be all the things to all people.
Once you understand that fact, it’s easier for you to zero in on specific market segments. Creating personas helps further by defining who you’re talking to, in what types of businesses they work, and what they need to hear from your startup.
Then, switch the focus to your product.
What category (or subcategory) does it fit into? Do you need to create an entirely new category, in which case your value proposition focuses on explaining the need for that category to exist?
Highlighting the product’s capability helps you do that by revealing what the product unlocks for the client.
Finally, your features show clients how your product unlocks the capability, with the benefits highlighting what they get when they walk through the unlocked door.
