Use these 3 points to create an awesome value proposition

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Your value proposition determines your potential conversion rate.

It is why people buy from you.

It is your offering.

There’s a reason we placed it at the center of the LIFT Model. The stronger you can make your value proposition, the greater your potential conversion rate.

In the past, I’ve showed how even minor details in your users’ experience can harm your value proposition.

Today, I’m going to show you how to create your kick-ass, knock-em-dead, no-holds-barred, kill-the-competition value proposition.

But first…

What is a value proposition?

Here’s how I think about it:
Your value proposition is a cost vs. benefits equation that shows your prospect’s motivation.

Motivation = Perceived Benefits - Perceived Costs

If your perceived benefits outweigh the perceived costs, your prospects will be motivated to act.

It’s all about perception.

Your benefits hold different weight to different people. You need to find out which of your benefits are perceived to be most important to your prospects.

For example, to some, it’s very important that WiderFunnel offers full service design and technical implementation for the tests we plan. Other companies that have lots of talented resources, the strategy and test plans are the most important feature we offer. For the companies that value all of it, well, they perceive the most value in what we do. (Incidentally, this is also why we customize our service to best fit our clients so they get only the most valuable service, but that’s a topic for another day.)

You need to discover your best value proposition to have the best chance to close the most sales. Emphasizing the most important parts of your value proposition will maximize your conversion rate.

How do you find your best value proposition?

At a simplistic level, think about the WIIFM (What’s In It For Me?).

Every marketer understands the WIIFM concept. You already know how to speak to your customers, understand their needs, and speak in their language.

That’s entry price to understanding marketing.

The WIIFM are all the features and benefits your prospects could get from your products and services. But, you can’t communicate them all at once. If you try to emphasize everything, you’ll say nothing.

So, how do you know which features are most important to your customers?

You Should Test That!

Traditionally, marketers have relied solely on their own thinking to come up with the right features to create and emphasize. Sure, they may get input from small groups of customers with surveys and focus groups. But, there are many reasons those focus groups aren’t as great as they seem.

Or, they may be a HiPPO and just follow their gut.

HiPPO = Highest Paid Person's Opinion
Watch out for un-tested HiPPOs

Today, there’s a better way.

By testing different value proposition approaches, you can find out what works best with statistical certainty before committing to one assumed positioning. At WiderFunnel, we’ve been promoting value proposition testing since 2007 and it’s now becoming a very popular business concept. Testing value proposition is one of the central concepts in Eric Ries’s Lean Startup (a book I recommend), for example.

The works in all types of businesses too—not just for startups.

For Electronic Arts, our testing of offer positioning for the Sims 3 player community revealed the most important benefits for members. This made a huge impact on their group and caused changes in their marketing approach and org structure. They learned which types of offers work best to inspire their gamers to act, and increased their game registration conversion rate by 128%!

But, how do you decide what could be valuable to test for your customers?

Your combination of prospects, products and competitive environments are unique.

To find out what works best, you need to create great value proposition hypotheses.

You need Advanced Value Proposition Optimization

The “POPs, PODs and POIs” framework is useful for identifying new positioning ideas to test.Kevin Keller discussed a similar concept of points of parity vs. points of difference in his Harvard Business Review article. He used it with respect to brand positioning, product development and brand extensions.

For existing products and brands, I believe it’s also a useful tool for thinking about the features to emphasize and hypotheses to test.

I’m a visual thinker and find diagrams helpful for learning. I created this Venn diagram to show how to think about your Points of Parity (POPs), Points of Difference (PODs) and Points of Irrelevance (POIs):

WiderFunnel PODs, POIs and POPs

  • Points of Parity (POPs)
    These are the features you offer that are important to your prospects that you also share with your competitors. Think of them as the basic entry requirements to the game. Your prospects need to know that you offer the POPs, but emphasizing them won’t impress anyone.
  • Points of Difference (PODs)
    Here’s where you can win the game. These are the features that are important to your prospects and not available from your competitors.
  • Points of Irrelevance (POIs)
    All the other features that you offer, but aren’t interesting to your prospects are Points of Irrelevance (POIs).

Your PODs are where you want to focus. These are the features you can emphasize that will move your prospects to action. They’re your differentiators.

You can use your PODs to destroy your competition.

But all PODs aren’t created equal. Some will be more important than others and some will only be important to certain customer segments.

No matter how much effort and research you’ve put into your value-proposition points, you should test that!

At WiderFunnel, we often run experiments where we create and test value-proposition alternatives. When combined with data from surveys of customer and market perceptions, these tests add quantitative validity to the qualitative insights. The learning from these value proposition tests often generates powerful marketing insights that impact the overall marketing strategy.

Landing Pages are your best Value Proposition test opportunities

Your best opportunities for testing your value proposition are with first impression visitors. These are usually new visitors to your high traffic landing pages or home page. When I refer to landing pages, I’m specifically talking about website entry pages. These are the first pages your visitors see when the arrive on your website.

By split testing your alternative value propositions with new visitors, you’ll reduce your exposure to existing customers or prospects who are already in the consideration phase. New prospects have a clear canvas for you to present your message variations and see what sticks.

Then, from the learning gained on landing pages, you can validate insights with other target audience groups and with your customers to leverage the learning company-wide.

Landing page testing can do more than just improve conversion rates on landing pages. When done strategically, it can deliver powerful, high-leverage marketing insights.

How do you optimize your value proposition? How do you know which features are most important to your prospects? How would you discern your POPs from your PODs? Add your comments below.

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  • Chris,

    Thanks for this post! I love the HIPPO acronym!

    I’m definitely going to focus on proving ideas instead of trying to predict the future with my crystal ball.

    Thanks again.

  • Here's a diagram of the concept of perceived benefits outweighing perceived costs:

  • What a great article, Chris!

    I love that part "If your perceived benefits outweigh the perceived costs, your prospects will be motivated to act." So true. It reminds me of what John Patterson said (Father of Modern Sales) "If the prospect understood the proposition, he would not have to be sold; he would come to buy."


  • Really kick-ass article and tips! Thanks Chris for sharing!

  • Your PODs/POPs/POIs discussion reminds me of the Kano model.

  • "Interesting information, thanks for making these contributions.

    Thank you very much!"

  • Zohaib Akhlaq

    thanks @Chris! A great post explaining Value Proposition in detail.
    I would recommend The Lean Start-up Book Written by Eric Ries to Every Start-up owner.
    Keep up the good work!

  • Home page as landing page is truly the best way to test your value proposition. And split testing will really tell what is working with customers and what does not. To do this kind of testing you will need a website that gets quality targeted traffic.