While competing in The Amazing Race, Blake Mycoskie took an eye-opening trip to Argentina.
Four years later, Mycoskie revisited Argentina on vacation. There he met a woman who was volunteering to deliver shoes to shoeless children. The experience fueled his desire to start a footwear company to help more children in need. His goal was to donate one pair of shoes for every pair someone bought.
You may have heard of this famous footwear company - TOMS.
With nothing more than 200 pairs of shoes and a strong value proposition, Mycoskie began to pitch journalists.
Finally, the Los Angeles Times picked up his story. To his surprise, Mycoskie generated $88,000 in orders over the weekend (source). Eight years later in 2014, TOMS valuation was $625 million (source).
Dozens of copycats have since used the one-for-one model. Companies like Warby Parker, Patagonia, and The Company Store all use this model. According to Wikipedia, it’s now classified as a business model (source).
For TOMS, this story ends on a happy note. Mycoskie leveraged his value proposition and withstood the onslaught of copycats and competitors.
But for other founders, their products and company stories often end tragically.
Some don’t know how to clearly communicate their unique value. While they might get a wave of traffic from Product Hunt, none of it sticks.
Or perhaps a better-funded competitor takes their idea. They use a similar value proposition and outsmart the competition.
How do you keep your lesser-known company out of the startup graveyard?
One key element is by crafting a unique value proposition that sells.
“A value proposition is the value you promise to deliver to your customers.”
Therefore it makes sense that the better you communicate the value you promise (your value prop), the more sales you’ll make.
Here’s the thing.
If you’re relentlessly testing marketing tactics with a lame value prop, you’re just polishing turds.
If this sounds all-too-familiar, read on...
Peep Laja, the founder of the renowned conversion optimization agency Conversion XL, went so far to say:
“...if I could give you only one piece of conversion optimization advice, ‘test your value proposition’ would be it.” (Source)
A strong value proposition will be:
Here’s the problem:
Your competitors can easily copy most value propositions. I’ve found over 30 companies using the one-for-one model (source, source, source). And that doesn’t count dozens of other companies who tried and failed using this business model.
In fact, your competitors will often offer a similar value prop as you. Perhaps they will phrase it a bit differently. But it’s almost an exact copy in the eyes of your customers.
So how do you write a powerful value prop that makes sales, and is nigh impossible for your competition to steal?
Main article: Voice of the customer (VOC)
Ask them why they bought your product rather than a competitor’s product. Find out what they wish were better about your competitor’s offer. And also ask what is the main reason they bought from you. Talking to your customers is key when accurately mapping your Gap Analysis™.
Customer interviews will point you in the right direction. But market research is valuable to understand how big the problem is in your target market.
You can survey the market using a survey tool like Pollfish. How many people should you survey? To get a 99% confidence level, with a 5% margin of error, and with any population size, you will want to survey 664 people.
Main article: Competitive intelligence
Look up the names of every competitor in your niche. This includes looking up:
Next, you’ll want to find out how your competitors are positioning themselves. To 80-20 this process, I recommend you look at their title tag in Google. Then look at their messaging on their homepage. This is where customers look to first learn about a company’s value prop.
If you’re looking for a product’s value prop, you’ll want to visit the product page and use this same process.
Put this all in one document so you can easily compare and contrast what you’re doing.
Main article: Positioning strategy
With your research in hand, it’s now time to pick which market you want to be in and the position you will take to dominate the market.
Each of these steps makes it harder for someone to steal your idea.
But the final step is what will cause your brand to rise above the noise.
Main article: Unique selling proposition
From my observation, there are three approaches companies take to creating a strong value prop which creates sales:
Let’s take a look at each strategy to a strong value prop, and why I recommend you create a USP.
1. The company riffs on a common value prop.
Walmart took this approach to create a strong value prop. And from my observation, it’s the hardest approach to defend. Especially if you’re not a big-name company.
Why is it so challenging to defend? Because it’s too easy for someone else to take the same approach. As a result, you often need to constantly outwit the competition to become and keep up with the Joneses your competition.
Think about how many bargains and discount companies are out there competing with Wally World:
Wikipedia also lists over 90 defunct discount stores (source). If I were in your shoes, I would avoid taking this approach to creating a value prop at all costs.
2. The company creates an original value prop.
Using this approach gives you a similar temporary advantage as being first-to-market.
As a result of creating an original value prop, it’s easier to be first-to-mind because, for a season, you are the only option.
If you want to remain first-to-mind, the trick is to not let your foot off the marketing gas pedal to keep your lead. Otherwise, a smarter and better-funded team may become number one in your market. Consider how Facebook overtook MySpace as the social network to connect with friends.
TOMS took this approach to create an original value prop.
3. The company creates a USP, supported with a concrete promise.
If I were to ask you, “Who promises to deliver pizza in 30 minutes or less?” you’d likely answer Domino’s.
Domino’s customers still remember this promise years later. Here’s a Reddit post from 2017 with pizza delivery guys and gals still hearing this complaint. And here’s another post from 2019 referencing the 30-minute delivery requirement.
That’s the branding power of a USP. It sticks in your customers’ mind years later.
Sure, Pizza Hut or Little Caesar’s could claim they deliver pizza fast. Domino’s put their money where their mouth is and stated they’d get it to you in 30 minutes.
To create your USP, you’ll want to dig into your data.
Let’s say you want to offer fast customer service. How fast does your support ticket software say you solve each issue?
Or maybe you sell the world’s boldest coffee drink as Death Wish Coffee does. Can you measure coffee strength by how much caffeine is in every cup of coffee?
All you need to do is figure out what you already do right now to solve your customer’s problems. Then promise you’ll solve it with concrete information.
The single biggest driver of growth I’ve seen for new products is a strong value proposition. And if you can back it up with specifics and a rock-solid guarantee, even better.
If you have not done so, I’d recommend you start by creating your voice of the customer program. This will give you qualitative data on how to create your value prop.
Once you have that information, I recommend creating a market research survey. This will allow you to see how big the issue is in your market.
Then check out what the competition is doing. How are they positioning themselves?
Next, consider what your position should be in the market. Can you be significantly better than what your competition is offering? If not, can you do it better?
Finally, drill down into specifics to more precisely communicate your USP.
For more articles like this, click here to check out our articles on positioning.