13 pitfalls to avoid in your value proposition and market positioning
How to communicate benefits of your product that resonates with your target buyer
Businesses struggle to make inroads with their market - especially in sales - if their value proposition is not understood by their core target buyer. A company’s value proposition is the essential tool needed for selling anything, particularly within B2B sales and marketing. And it needs to have been test-driven before putting too much money and effort into promoting it.
Where a value proposition fails to land and connect with target buyers this shows a disconnect between the product, the market and the company. Before building comprehensive marketing plans and spending a load of budget on advertising and marketing, be sure of how your offer resonates with the market.
What is the value proposition?
This is the promise you make to your target buyer. It highlights the value your product will bring to them and their business. The solution to your customers’ problems, and the ‘why’ someone should do business with you.
Your value proposition should explain the benefits to be delivered, experienced and achieved through the use of your product or service. Value propositions are either representative of the entire organisation or for specific products, and are developed in the early stages of business and marketing strategy.
When it comes to a product, the value proposition should declare why it's best suited to a particular customer and be persuasive to turn a contact into a customer. The value proposition should be used throughout all marketing communications and understood by the entire company or product representatives.
A good value proposition allows you to stand differentiated from your competitors and explains all benefits in a quick and digestible way.
What is positioning?
As part of your value proposition, you also need to consider its context - how you will position it in the market. It’s important to use known and recognised cultural signifiers to connect with your audience and for prospects to immediately ‘get’ what you’re offering. Anything totally out of the box is likely to lose and baffle people. You need to make sure you enable your audience to understand your purpose and the problems you solve.
You may have heard examples like:
Using recognised cultural signifiers allows you to cut through the market fast, resonating with more people.
However there a numerous pitfalls companies fall into with their value proposition and positioning, especially fast-growth start-ups and those scaling their business:
1. Too close to your product
This is often the case for founders or people who have been leading a company for several years. What was the idea of the product in the early days may have changed, adapted and evolved, with the initial vision intact. This leaves your value proposition in conflict with real-world market behaviours.
The closer someone is to the product, the less aware they are of its perception and how it fits in the market. The pitfall here is not listening to the market or current customers, and ignoring sales prospects’ purchase barriers. Furthermore, the product or service may have a reduced shelf life if it doesn’t respond to changing market conditions.
2. Being too clever in your communication
Intelligence isn’t a bad thing, but how you communicate can be. The problem that most entrepreneurs and business people struggle with is tapping into those outside your inner circle. Using the KISS - Keep It Simple, Stupid - theory is key. It’s not about ‘dumbing down’ your product or service. It’s about delivering messages in a simple way, making your communication more effective.
Start (always!) with your customers: how well do they understand your product? Can they tell you why your product is special? Why does your product matter to them? If they can’t answer these basic questions then your value proposition is not working. They might answer them in a way totally unexpected to what you consider, in which case you may be too close to your product (see point 1 above).
The tale-tell signs of a ineffective proposition include: a long sales cycle, competition is growing and winning your prospects, few leads are entering top of the funnel, price is confusing - and perhaps most embarrassingly new leads have no clue what you’re selling (making life for your marketing and sales teams tough and uninspiring).
3. Unrealistic market view
As part of competitor and market scoping at the beginning of building your market and business strategy, you should have identified how your product compares and can be positioned. But perhaps you considered your product innovative and incomparable to existing solutions, so you marketed it anyway - however if you’re struggling to break through, you have to ask if you’re in the right market at all.
Products can be repositioned and remarketed, and it’s important to ditch what isn’t working and try something different. You never know, you may have a great solution but it’s better for a totally different industry.
4. Using templates
There are a number of great tools and guidance out there for developing a value proposition, but it’s important to use them as part of the process while ensuring the process fits around your business.
The templated examples of value building are often dry and vague, leaving little to creativity. It’s important to work with a mentor, coach or a marcomms agency, to guide you through this process, using a framework that you can work with.
5. Jack of no trades
Some companies master a very specific solution, others look to provide wider support. Part of this is about actually committing to a plan of action, investing in specific solutions and taking the business on a journey.
Unless you have significant investment (we mean millions of dollars) you’ll struggle to enter more than one sector. Try tackling three sectors and you’re spreading yourself way too thin for a growing business. Be conscious of when to introduce second or third products - this too will stretch your resources and potentially confuse customers.
At first, it’s important to be known for one thing then expand, for example Uber was known for taxis, now it does a range of deliveries; Airbnb was known for house shares and now it's all forms of holiday and temporary accommodation. And remember how much money they raised to build that market awareness.
“You cannot be everything to everyone. If you decide to go north, you cannot go south at the same time” - Jeroen de Flander
6. Starting with your product
You’ve designed your product with an idea in mind - maybe it was solving a personal problem, or one you came across through conversation. But whatever you do, do not build the positioning around the product. You’ll be heading down a rabbit hole that you may never escape.
Go back to your customers and the market: what are their problems? What are their challenges? What are they trying to achieve? How does my product answer these questions?
7. Failing to test the sales process
We know you want to get out there to sell, and sell fast - but with the wrong proposition you’ll just be postponing the inevitable. Spend the time and the money at the beginning to get your process right, lay the foundations and build up. Testing the sales process from the beginning is essential.
Understand what interests people in the first place, what the process was to build their confidence to purchase, what their purchase barriers were, and what feedback they would give you on the sales cycle. You can use all this evidence to support your value proposition and develop a robust sales funnel.
8. Missing customer perspective
The aspect often missing from most value propositions is the perspective of the current customer. This creates a disconnect as it’s important to really understand the product as your customers perceive it. This will be an ongoing task as the company matures, so it’s worth getting a process of customer feedback in place early.
The more feedback and understanding you have from your customers the easier it will be to respond to market changes, pivot and retain customers. Leaving the customer perspective out of any proposition review is like an ostrich burying its head in the sand. Ignorance may be bliss in some areas of your life, but if you’re ignorant of what your customers want, need and feel about your product, ignorance is the equivalent of business suicide. It’s essential when creating an effective value proposition to know your warts and all.
9. Failing to backup points
Evidence and proof are key in building credibility and confidence in the buying process. Decision makers will often ask for examples of success stories, use cases for specific functionality, and want to understand how your product works to the benefit of their business unit.
The value proposition can seem creative and airy-fairy but if you get it right, prospects and customers will see how you’ve focused on the characteristics of your product that drives benefits. Take the time to promote those features based on objective facts and provable examples.
10. Ignoring the procurement process
For B2B the decision making process can be long, incorporating many actors from different levels of an organisation, and an array of skills and experience which may often seem at odds with the product. However, this is a reality - and you need to make sure you’ve set up a value framework that answers the questions and addresses the criteria of all those key figures in the procurement process. The more you know about how internal decisions are made and the general approach to purchase, the more focused your value proposition can be.
It’s important to focus on the attributes customers care about when they’re evaluating a purchase decision - it’s what those features can do for them that they care about. What is the value they’ll experience? Keep your value framework simple and short by grouping attributes into digestible nuggets. Take the time to get to know the buyer influencers, and how your product will enable them to succeed professionally.
11. Ill-considered market opportunities
The wider you cast your net, the more difficult it can be to achieve the results you expect. Consider the best ways to increase your chances of sale - you may need to reduce the size of your target market or take it in stages.
We often see this in the hotel market where system providers target all hotels worldwide, ignoring the fact that an independent family-run 10-bed hotel in the middle of the countryside will have different needs to a 300-room all-inclusive popular beach holiday resort, or even a global hotel chain of 370 properties.
Companies that grow well are those that identify their best-fit customers and organisational profiles. This lets them tap into the very challenges buyers have - making it easier to sell to and retain customers.
12. Forgetting to include staff
It’s all well and good writing a value proposition and sharing it, but the bigger the business and the more employees you have, the more important it is to involve key stakeholders in the entire process of reevaluating and rewriting the value proposition.
You need company buy-in - from your marketing and sales teams to your account management and product development teams, and everyone in between. Just as you expect all your staff to act as ambassadors for your company, they will each have an understanding of what potential and existing customers like and don’t like about your products and services.
By having staff involved in creating (or updating) your value proposition, you are encouraging them to embrace the company mission. Without that buy-in, the product or service you sell will not evolve in the right way. Aligning all teams to your central proposition allows you to make gains quicker and faster.
13. Ignoring your story - the reason why
When you have decided on a value proposition and market position, turn it into a sales story through a value framework which resonates with different audiences. Your employees and customers should feel comfortable owning and being part of this story; the more that share it, the wider audience you reach.
With any proposition it's important that it influences your product roadmap and pricing so your value proposition can stand the test of time.
Haynes MarComs has been developing value propositions for businesses for over a decade. We guide our clients through and facilitate the process, including supporting teams through research, analysis and determining the new position.
We also recommend the book Obviously Awesome by April Dunford as a guide to doing it yourself.
Find out more by contacting us.