How a Strong Value Proposition Differentiates Your Business and Drives Your Profits
A value proposition is a deceptively simple but critically important part of every brand’s success because it communicates why your brand is attractive to your primary target audience and what makes it different to your competitors.
It explains in distilled terms the value your brand delivers, which is effectively the primary reason for a customer to choose to do business with you. If your brand proposition is weak or hasn’t yet been fully developed then now is the time to re-evaluate it fast because a strong value proposition is a concrete business tool that drives your brand’s sales and profits.
Here we’re sharing with you six reasons why a strong brand proposition matters together with commercial application examples explaining how, so you can achieve higher margin sales and increase your profitability.
1. All Effective Brand Communication is Built on a Compelling Value Proposition
A value proposition is your unique, compelling offering which differentiates you from your competitors. It sets you apart, so you stand out to attract your ideal potential buyers. In fact, it’s a central part of your brand strategy because it makes what you’re selling, product or service, more compelling to your target audience, and so increases customer attraction and conversion rates to grow your sales.
It is possible to have a brand strategy or brand communication without a value proposition. Indeed, a lot of brands do focus on the “how” of brand communication without having first got clarity on the “what” or “why” of what they are communicating.
However, a brand without a clearly conceived value proposition typically underperforms and never realises its true potential or commercial value. A strong value proposition helps you sharpen your focus because it’s integral to your brand strategy and consequently, all your brand communications. That makes it more effective and also more painless because it enables you to avoid costly mistakes.
Triodos Bank is a good B2B example because it has a very clear value proposition centred around environmental sustainability — one of the world’s most sustainable banks.
Truth be told, in the finance arena few banks really stand out with strong differentiation. The majority are dismal in spite of what they spend on trying to make themselves appealing. Triodos Bank, on the other hand states that because sustainability sits at their core they only finance companies that focus on people, the environment or culture. This value proposition then sits at the heart of all their communications and indeed, commercial decisions.
Related: How Branding Strategy is Different to Marketing
“I really appreciate Lorraine’s energy and passion. Although good branding includes so many facets, Lorraine is able to simplify the process and make it so much more tangible for any company to put into practice.”
Marketing Communication Specialist
We know that sometimes it’s a struggle to build a brand strategy that really engages your ideal customers effectively, particularly in adversity, so we’ve developed three different ways of working with us to help you build your brand, depending on your preferences, so if you’d like us to:
- Build your brand for you – find out more here or get in touch [email protected] or ring +353 1 8322724
- Empower you to build your brand – check out the Persona Leadership Branding Strategy Mastermind here. This is a live, interactive programme online where you work on your brand with us codifying and mapping out your brand strategy for business growth. Alternatively, join our online half-day Branding Accelerator Masterclass for a fast-injection of brand-building essentials. Ask about our Personal and Corporate Leadership Brand Alignment Masterclass
- Want a DIY solution? Check out our how to build a brand eprogramme here and our how to audit your brand yourself eprogramme here
2. Crafting Your Value Proposition Forces Clarity on Other Key Elements of Your Brand Strategy
Some brands are born with an inherent value proposition. But many other brands need to dig deeper to uncover the hidden gems. In either case, it is far better for a brand to have a well-considered, well-articulated value proposition rather than simply fudging along thinking “it’s clear enough on its own”.
Even if it is clear enough to you as an engaged brand owner, it will often not be clear to target customers for whom your brand is only one of many they encounter over the course of each day.
One valuable benefit of taking time to purposefully craft your value proposition is that it forces careful consideration for all the other elements of your brand strategy, from your target market to your reasons to believe. In short, articulating your value proposition not only underpins your ability to achieve higher revenue, it also brings a lot more clarity around all the other elements within your brand strategy too.
A B2B product case study is Ilika. Its value proposition is clearly focussed on solid state batteries for industrial and commercial uses. This makes its brand message crystal clear.
Related: Top 5 Ways to Build Profitable Brand Relevant Consumer Tech in a Storm of Massive Change
3. A Strong Value Proposition Improves Profitability
Effective branding is all about setting your offering apart from an undifferentiated competitive offering because that gives you the ability to attract your ideal customers. Most importantly, it gives you pricing power. The more relevantly differentiated your brand is, the stronger its pricing power and profit margin, relative to its peers. That enables a brand to achieve higher pricing and consequently higher profitability.
This varies by category. In luxury goods or high-tech medtech, for example, there may be more pricing elasticity than in lower engagement categories such as plastic pellets or fibre cables. But although the impact may vary, the principle holds: even in very low-engagement categories where pricing is the key driver for purchase decisions, a strong value proposition still underpins stronger profitability, albeit within bounds.
A B2B product case study on this point is Henry Colbeck. This food service wholesaler focusses on supplying fish and chip shops. This simple but compelling value proposition allows it to build credibility with the trade. In turn this critical mass allows it to develop more bespoke offerings for the trade, which is a virtuous circle further entrenching the brand with its target audience.
Related: Profitable Lessons from Luxury Brand Leaders, Brand Positioning for Premium Pricing
“We participated in the Persona Leadership Branding Strategy Mastermind Programme online. The 12-week program suited us as the weekly accountability spurred us on to get work done between sessions.
We found the flow of the course appropriate for the development of the brand through the various areas of the business. Already, we have developed our Customers Personas and our Brand Persona adding value to the business.
The course has helped us make more astute decisions in the business such as restructuring our product offerings, so we grow more profitable lines and remove those with lower margins.
Lorraine is very helpful and accessible as a tutor with follow-up after each live working session and the half-day masterclass. Most of all the clarity achieved has been most invaluable.
In the first two weeks of March 2020, before Covid-19 required us to close, we were 300% up in our online sales compared to the whole of March 2019 and after reopening April 2020 we were back to 108% by the end of May 2020 — results achieved from applying our brand strategy.”
Are you a business leader, manager, or entrepreneur who wants to re-evaluate or build your brand strategy, so you can effectively maximise your brand’s value proposition to increase your sales? Are you curious about how to build or scale a highly successful standout brand? Join one of our branding masterclasses because they empower you to build your brand, enhance customer experience, expand your market impact and create higher perceived value, so you can command a premium.
In fact, the Persona Leadership Branding Strategy Mastermind is all about fast-tracking you, your brand and your business through the brand building, agile branding strategy process using professional big-brand know-how with proven systems that get results, so you can grow your business faster and more effectively.
The programme enables you to make your brand highly visible, different, credible, trustworthy, memorable and much loved amongst your ideal customers, so you can become more profitable and leave your competitors way behind. Be The One — your ideal customers’ favourite brand of preferred choice commanding a premium.
If you want a tailor-made solution specifically for your brand then we also provide in-house bespoke Persona Brand Building Blueprint™ Intensives working with you and your team, so you can grow your business faster and more profitably. Contact us to discover more [email protected] or +353 1 8322724
4. A Strong Value Proposition Improves Your Sales Productivity
Effective marketing is supposed to generate awareness and drive demand, so the sales function can then convert it to highly profitable revenue. However, as many people have experienced first hand, the process doesn’t always work smoothly. In truth, depending on organisational culture and structure, it can be quite dysfunctional.
The fact is, with a weak or indistinct value proposition, it’s much harder for sales teams to open doors, let alone close the deal. When they do interact with potential buyers, they spend a lot of time and effort overcoming misunderstanding and explaining what sets their brand apart, when in practice very little does.
It’s like a person going for a job interview with nothing remarkable on their resume, while the next candidate offers relevant, unique skills to the hirer – it’s clear which one is more likely to get the job.
A well-constructed, relevant value proposition is not just a branding tool. It also underpins your sales script. Consequently, a strong value proposition improves your sales productivity, because the hard work of matching needs and wants to the brand is eliminated from the sales endeavour and delivered instead, with consistency, by the value proposition. The fact is, you could make a significant difference to your sales performance by starting with reevaluating your value proposition using a brand audit health check, so you can identify where and how to achieve higher revenue, build business resilience and mitigate risk.
A simple B2C product case study that illustrates this is Quattro window quadruple glazing. Customers intuitively understand that more glazing layers equals better insulation and weather protection. Quattro is the only brand whose value proposition answers this need, so sales professionals don’t need to spend much time explaining the benefit – it’s intuitive from the value proposition.
Related: The Impact of Company Brand Culture On Driving Performance and Increasing Sales
“Lorraine’s depth of knowledge in branding is immense. I have attended some of her courses and also see first hand the benefits Persona Branding & Design can bring to a business. I am always happy to recommend Lorraine.”
5. A Unique Value Proposition Leads to Stronger Sales Conversions
Categories have inherent value propositions which are shared by all or most brands. For example, the broad value proposition of cloud hosting or refrigerated warehousing is the same across all vendors. That is why brands need to create their own value proposition, which makes them stand out to their target customers within their category, versus their competitors.
Often that will get the brand into a “consideration set” or it may create brand preference. But other factors could still mitigate against this. For example, the pricing premium might overstate the distinctiveness of the value proposition, or lack of availability may lead a customer to opt for convenience or speed of purchase over their preferred value proposition. That is why some companies intentionally work hard to generate a unique value proposition which leads to them being not just the preferred brand, but indeed the only brand for some customers.
This can take many forms such as;
- A unique ingredient
- Defining an industry standard
- Matching known tendering requirements in a way other brands do not
- Applying patented technology unavailable to other brands
- Developing a unique system that gets great results for your customers more cost-effectively — and consequently becomes a valuable piece of intellectual property in your business
These things do not happen by accident. Instead, in crafting its value proposition, the brand’s owner has considered what unique elements they can bring to the mix versus competitive brands.
A case study from the construction industry is Marxman. This builder’s marking utensil answers a clear user need, and with patented technology it is the sort of product that if specified in a service level agreement, for example, cannot be substituted.
Related: Leading in Adversity – 10 Practical Steps to Make Your Brand Work Harder to Grow Your Sales
If you’d like to discover more about building and maintaining a thriving, high performing, highly profitable standout brand, then get in touch because we’d love to help you make your brand into a profit powerhouse.
- Schedule a chat — we can meet in person online
- Let’s consider a customised plan for you
- And perhaps implement the plan together
- Contact us [email protected] or ring +353 1 8322724 (GMT Dublin/London time 9:00 – 17:30 weekdays)
Lorraine Carter is a branding expert and international speaker delivering talks online and offline that inspire and motivate along with masterclasses and workshops that inform and support transformational outcomes fast, and consultancy expertise that solves problems — using agile branding strategy underpinned by professional big-brand know-how — so you can outshine, outperform and leave your competitors way behind.
She enables you to differentiate, achieve higher revenue, expand your market share, build IP brand asset value — make the complex easy as ABC so you can Transform Your Brand & Increase Your Sales — Be The One, the brand that’s most credible, trusted and commanding a premium so you’re highly profitable and leaving your competitors way behind.
Ask about the Persona Leadership Branding Strategy Mastermind — live, interactively, face-to-face online.
6. A Clear Value Proposition Helps Sales and Marketing Converge Not Compete
One challenge in many companies is the potential conflict between marketing and sales. Marketing often neglects to develop a strong brand strategy with an irresistible value proposition and instead, focusses on brand elements such as features and benefits. Those may be used as a starting point by sales teams, but sales often also move away into their own territory, especially around pricing. This can effectively lose sales, but even when it wins sales it often does so at the expense of strong margins and resilient profitability.
A value proposition is an effective tool to mitigate those inherent vulnerabilities and challenges. A strong value proposition, driven from your brand strategy, sits across both your sales and marketing functions. If your value proposition is compelling, sales will see less need to go off-script in offering special deals, reduced pricing and various other commercially undermining efforts long term.
Related: Increase Sales Using Buyer Personas, Your Guide to Understanding and Targeting Your Ideal Customers
A strong value proposition differentiates your brand from your competitors and gives your customers a compelling non-priced based reason to buy, so you can achieve higher-margin sales.
Regardless of how obvious it may be to you, as the brand owner, if your primary target customers can’t see clearly what sets you apart from your competitors then you haven’t done enough — you probably don’t have a strong value proposition. In short, if they can’t instantly understand what makes your brand compelling on their terms you’re on a slippery slope to nowhere.
You also want customers and prospects to differentiate you for the right reasons. That helps you build your unique brand and helps you achieve long-term pricing power. A value proposition doesn’t need to be complicated, but it does need to be well-considered and realistic.
Even if you haven’t considered it before, you can start today to reassess your value proposition as it currently appears and where it potentially needs improvement, from your customers’ perspective, using a brand audit. Once you’ve established that essential baseline then you’ll be in a far stronger position to achieve higher revenue, build brand asset value and become a more resilient business longer term.
“Having worked with Lorraine on a number of events and projects, I knew that taking part in the Persona Leadership Branding Strategy Mastermind programme was going to open my eyes to how my brand could be mapped out and developed to help the business grow.
I had no idea just how much of an impact the programme would have in helping me to shape my whole business strategy and lay the foundations for my future plans. By evaluating my brand, defining and putting a structure on what we do and why it enabled me to map out the direction for where the business and brand are headed.
All the worksheets, tools, and resources you receive are very thorough and Lorraine gets a great sense of what your business is and what you are trying to achieve, so her guidance is tailored to you.
I would highly recommend working with Persona Design to any entrepreneur/SME that is striving for success.”
Founder, Conference & Events Director
Zoom In & The Executive PA Forum
Questions to Consider
- How clearly defined is your value proposition currently?
- Does your brand strategy use your value proposition as an integral part?
- How does your value proposition drive your target profit margins?
- What does your value proposition offer which differentiates you from competitors?
- Does your sales process reflect your value proposition?
- Could you use a brand audit to help you work towards building a stronger value proposition, so you can identify where and how to achieve higher revenue, build business resilience and mitigate risk?
Your Persona Client Satisfaction Guarantee
- When you work with us we’ll create a customised brand-building plan and strategy with clear investment for you tailored to your specific requirements and preferences
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- You’ll have timelines, key milestones, and deliverables to evaluate and approve for each stage and part of your brand building process
- Because we know the unexpected sometimes happens we can make adjustments along the way if you need it and if something extra is requested we’ll ensure you’re fully appraised about what that entails before committing
- As we achieve pre-agreed objectives you’ll be able to evaluate your brand building work and strategy in progress, coupled with the outcomes to ensure return on investment
Get in touch today because we’d love to enable you to re-evaluate and build your standout, powerhouse brand, so you can Be The One — increase your profits and leave your competitors way behind.
Email us [email protected] or ring us +35318322724 (GMT 9:00-17:30) and ask about our VIP Brand Strategy Re-Evaluation.