The Marketing Power of a Strong Product Value Proposition
The modern business world is dynamic and fast changing, and today’s consumer is smart, informed, and savvy.
With an abundance of information available at the click of a button, they can see straight through flimsy marketing campaigns and overpriced duplicate products.
A strong product value proposition that instantly communicates the unique and authentic value of a product to the customer is more vital than ever before.
Managers face the dual task of increasing revenue and meeting sales objectives, while also ensuring the brand is constantly offering great perceived value for customers. A strong product value proposition can help.
Keywords in This Article
- Product value proposition. A concise statement that explains the value of a product.
- Value perception. The actual value of a product calculated by the customer.
- Value exploitation. The process of making profit for a business by producing value.
Common Mistakes Made by Businesses
- Having Poor Marketing Skills
Even if a product is a truly unique innovation, it will not achieve its full potential without the right marketing.
Scientists, engineers, and entrepreneurs might have the passion and ability to create excellent products, but they must also have the marketing knowledge to sell them. Producing an effective product value proposition is a great step in the right direction.
- Rebranding Without Providing Extra Value
Countless businesses attempt to revitalize dying products by re-releasing them as ‘new’, ‘improved’, or ‘ultra’. This strategy is often seen in the automobile and confectionary industries. But today’s knowledgeable consumers see these products for what they are - the same item repackaged in an attempt to justify a higher price point and sell more units.
Unfortunately, this often has the opposite effect; unimproved products that cost more money decrease perceived value. What’s more, put off by being sold the same thing for more money, customers are often driven to competitors they deem to be more honest and trustworthy.
How can a Product Value Proposition Help?
Truly innovative, valuable products are the ones that attract and build loyal customer bases - not unfounded rebrands or other gimmicks. A product value proposition helps businesses communicate the unique benefits of their product.
Product Value Proposition vs Value Perception
When a customer weighs up the value the company is promising in the product value proposition against the price, they calculate the product’s perceived value.
A product with high perceived value will be deemed to offer benefits that justify the price and are worth investing in. When a product value proposition successfully increases the customer’s value perception, businesses can sell more products at a higher price point, ultimately boosting profits by achieving greater value exploitation.
What Makes a Great Product Value Proposition?
The best product value propositions tell the customer what they will gain from using the product, or how it can solve a pertinent problem they have. It might also highlight the unique nature of the solution (e.g., how it differs from and outperforms competitors). A clear product value proposition will communicate the true, innovative value of a product.
The Best Product Value Propositions
- Explain how the product meets the customer’s need. The best products meet a need or solve a problem faced by the target customer. Clearly conveying this in your product value proposition is a great way to convince customers of its worth.
- Communicate benefits concisely. A product value proposition should be short and to the point. It must succinctly pinpoint and highlight the most impressive benefits, rather than simply listing everything good about the product.
- Explain why the product is better than similar competitor products. This will increase perceived value by portraying your product as useful in a unique way that has not been achieved by your competitors.
What is the Ideal Structure of a Product Value Proposition?
- Headline. A powerful and eye-catching headline should clearly communicate how the product will benefit the consumer. This part should be catchy, memorable, and short – it may even double up as a slogan.
- Subheading. The subheading expands on the headline and offers more context. It might explain why the product is better than competitors on the market, or highlight key features that lead to the benefits proposed in the headline. Despite including more detail than the headline, the subheading should still only be two to three sentences long to hold the reader’s attention.
Which Companies Have Great Product Value Propositions?
Tech companies like Microsoft, Sony, and Intel are constantly innovating, developing new products that provide distinct upgrades and new benefits. Each fresh product clearly outperforms its predecessor, and is therefore well-received by consumers.
As these companies continually innovate and elevate, they are constantly improving their product value propositions. This innovation keeps them fresh, cutting-edge, and trusted in the eyes of their customers. Ultimately, their consumer sees their products as having a high value.
Product value propositions are a powerful way to communicate the unique benefits of a product. They help businesses quickly show the customer why they should choose their product over a competitor’s, and help marketers avoid falling into gimmicks and lazy rebrands.
The best product value propositions boost the customer’s perceived value of a product, resulting in increased brand loyalty and better value exploitation for companies.
Sources
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