What is a Value Proposition and How Can It Help Your Strategy?
Before we dive in let’s define some terms:
A value proposition is the argument for why your service or product is the service/product the customer or stakeholder should choose to purchase or support.
Segmenting is looking at the whole community/marketplace you’re trying to reach, and creating mini groups within that space that you can more easily focus on. Most often, these groups are created based on aspects of their demographics (age, gender, location) or known shared affinities (likes dogs, goes hiking, horror movie devotee).
We’ll look more at segmentation in a second, but first, let’s discuss how you identify your core value proposition.
Defining a Value Proposition
Often people in a company or organization think their value proposition is the end result or product.
For instance, a nonprofit working on making education more equitable would (understandably) think that their value proposition is: by supporting our work education will become more equitable.
But that’s the intended end result, not necessarily the value proposition.
Likewise, a company that sells boutique floral arrangements using locally sourced flowers might think their value proposition is: buy from us and you’ll get a beautiful bouquet made with local flora and foliage.
That’s the product, not the value proposition.
So what is the value proposition? Or rather, what is an effective value proposition? It’s keying into the emotional impetus behind why a customer/stakeholder is willing to buy what you are selling them.
With that in mind, for a nonprofit working towards equity in education the value proposition might be more like: remove barriers to high school graduation for youth.
Or, for the floral boutique their value proposition might be: support family farms that grow native flowers for local polinators.
These are not the only value proposition possible however, which brings us to why it’s important to understand that whatever you do, you will be segmenting your value proposition.
Why Segmenting Your Value Proposition Matters
Now, I’m not saying you should fragment your value proposition. Regardless of which proposition you’re using at a given time to speak to a given group of people, it should still remain consistent with the core values of your organization/company.
But segmenting your core value proposition into several adjustable value propositions means that you’re able to adapt the message to the interests of a wider audience.
So how do you do that? You need to know your audience, or at least be able to make reasonable assumptions about them.
Let’s look at the examples from before. In the nonprofit’s adjusted value proposition I was making two main assumptions: that the audience cared about kids and youth, and that they believe education is important. Can you see where I made those assumptions?
For the boutique florist, I made the assumptions that the audience cared about local farms and pollinator species.
Before you start to object, yes, you’re right. Not everyone will care about local farms and/or pollinator species. Not everyone will even care about kids and youth, or see view educational attainment as important.
But you’re not trying to speak to everyone. You’re trying to speak to the audience who already hold beliefs that overlap with your company/organization’s core values. That way, you don’t waste time, energy, and financial resources trying to have a conversation with someone who was never going to listen.
How to Segment Your Value Proposition
First, start by defining your organizational/company values. These are the bedrock of whatever value proposition you’re using to communicate and convince.
A nonprofit focused on education equity might define those as: compassion, adaptability, innovation, and accessibility. Values can be single words, or whole sentences, so long as they establish an expectation and boundary of the behavior of everyone who works for and represents that organization/company.
Next, consider your audience.
If you’re trying to appeal to educators to partner with your organization you might choose to focus on accessibility and innovation to help provide support for underfunded districts and provide necessary classroom supports.
For parents it might be compassion and adaptability that begins with acknowledging that many parents are already stretched thin with work and family demands, and want to support their kids but might not have the tools.
Or, maybe you’re trying to convince a local tech company to partner with you to provide laptops for an afterschool robotics and coding club. There you’d be focused on innovation and adaptability in terms of providing a type of learning and the resources that might not be traditionally available, while also providing a space for workforce training that a local tech company could benefit from in the future.
The values stay stable, helping to guide the work you do. Meanwhile, you’re able to zero in on what matters to each separate audience from every community you’re focusing on.
Know the Limits of Segmentation
Keep in mind that just because you can segment your value proposition and messaging, that doesn’t mean you should take it to the extreme.
Segmentation works best when you’re not getting too granular with it. A group of a hundred donors or customers could be fine, but creating a value proposition you’re only going to communicate to ten disparate people is generally a waste of time.
Segmentation works best at the community, not a hyper-individualized, level.
And if you’re feeling overwhelmed, just remember that all you have to do is embody those values. Else Communications can help you can craft a set of value propositions designed to reach your key stakeholders and customers, and design your outreach and marketing to match.
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