Most startups quickly write their value proposition and settle for one that is just OK. Settling for a value proposition that is just OK is a missed opportunity to gain more customers and grow your company faster. You should spend time writing and refining your startup value proposition so that you can better hold the attention of the page viewer and convince him or her that your website, service, or product is worth their time (and money!).
What is a Startup Value Proposition?
A startup value proposition tells a person how your product or service is going to benefit him or her. It is a concise statement that clearly says what you do and makes people confident that you are better than your competitors.
Analytics company ChartBeat published a guide about this and wrote that you have just 5 to 30 seconds to hold the attention of a website viewer. That isn’t a very long amount of time to communicate with a potential customer, which is an added reason why you should spend a considerable amount of time refining your value proposition. Spend time making sure it’s short and powerful.
A company that has done a great job crafting a short and power value proposition is Airbnb. Airbnb is a highly analytical and data-driven company, so we know that they have spent time iterating on their homepage value proposition (and used data to guide them).
When somebody lands on the Airbnb homepage, they are greeted with the following statement:
By the page saying, “Welcome home. Rent unique places to stay from local hosts in 190+ countries,” Airbnb has packed quite a lot of information into just 13 words. Let’s break down what they’re telling the homepage viewer:
- Welcome home: conveys a sense of comfort and convenience.
- Rent: what you can do with Airbnb.
- Unique places: Airbnb makes your travel more memorable.
- Local hosts: experience a city like a local, not a tourist.
- 190+ countries: this is social validation and tells the reader that a lot of people already use and trust Airbnb.
With a lot of useful information packed into a succinct statement (like Airbnb has demonstrated), you have a much better chance of capturing the attention of a viewer.
Does It Really Matter if Your Value Proposition is Bad?
Yes, it really matters! Your value proposition is (or should be) the center of attention on your homepage. Your value proposition is subconsciously processed by readers as the biggest benefit you’re going to offer them. If the reader doesn’t immediately see a benefit of your product or service to them, they’re going to bounce.
We believe that a bad value proposition has the ability to make a business fail. That may seem somewhat extreme, but failure to articulate what you do is kind of a big deal!
Jill Konrath explained in a post on her blog that: “A strong value proposition is specific, often citing numbers or percentages. It may include a quick synopsis of your work with similar customers as a proof source and demonstration of your capability.”
Testing Your Value Proposition
It’s going to be hard to figure out what a strong value proposition is if you don’t test like crazy. Since most companies aren’t testing their value propositions, the act of you testing is potentially a simple leg up over your competition. Optimizing your proposition will help you acquire your target customers and make your current customers love you even more. This is the only way to figure out if your value proposition is powerful enough to capture the attention of a viewer in a compelling enough way to make them turn into a customer.
If you’ve tested your value proposition like crazy and think you have found one that works well for you, don’t be afraid to keep testing. There’s a point when you’re likely wasting your time testing, but it’s always a good idea to see if there’s a little tweak you can make that goes a long way. Don’t be content because you may find unexpected improvements.
To test your value proposition, you can use a tool like Optimizely. Optimizely, which naturally has a very good value proposition, is the easiest way to A/B test your own statement. We’ll use a screenshot of the Optimizely homepage to help you understand what their product does:
As you can see, Optimizely helps you easily optimize various elements on your website to increase your conversion rates. It’s super easy to implement, has a code-free visual editor, and delivers a powerful experience filled with tons of useful data. You’ll make smart decisions if you use Optimizely.
How to Begin Writing Your Value Proposition
Now that we’ve talking about what a value proposition is and how you can test yours, it’s time to write your own. The SumoMe blog offers some valuable tips on how to begin crafting your statement. Here is what SumoMe suggest’s doing:
- Research your audience.
- Create an ideal buyer persona.
- Research your competitors.
- Determine the primary benefit of your product.
- Test and iterate.
We really like these 5 steps that SumoMe suggests because they are a great way for you to obtain an even better understanding of your users while writing your value proposition.
Some Value Proposition Formulas to Help You Write One For Your Company
It’s pretty pointless for us to just go on about how you should write a brilliant value proposition without giving you some actionable ways to accomplishing that feat.
The best value propositions include the following:
- The benefit(s) to your customer.
- Important features.
- How you are better than competitors.
This formula is how you should be thinking about your value proposition:
You need to convince people that there is little to no risk involved in using/trying your product or service.
You can reduce the perception of risk by using one of the following value proposition formulas:
Geoff Moore’s Value Positioning Statement
In his legendary marketing book Cross the Chasm, Geoff Moore shared the following template for creating a value proposition.
For ___ (target customer) who __ (statement of the need or opportunity) our (product/service) is __ (product category) that (statement of benefit) ___.
For doctors who have trouble managing their time our product is an Apple Watch calendar app that makes it easy to manage multiple patients at once.
Steve Blank’s XYZ Value Proposition
This formula, created by Steve Blank, is very simple. It’s simple because Blank believes that if you can’t easily explain why your product or service exists, nothing about it matters.
“We help X do Y doing Z”.
We help doctors manage their time by syncing a calendar to an Apple Watch.
Venture Hacks’ High-Concept Pitch
High-concept pitches have consistently done things like convince movie executives to invest large amounts of money in projects they have only a little bit of information about. Nivi and Navel, the duo over at Venture Hacks, took this concept and applied it to startups.
[Proven industry example] for/of [new domain].
Facebook for artists.
We’d love to check out your product or service and read your value propositions. Share both with us in the comments!