Values based marketing: what it is and how to use it?
You’ve probably heard of two main approaches to marketing your product: Product-driven and Customer-driven.
A product-driven environment involves the business developing a product first, then searching for a market for it. Essentially, it operates under the assumption that with awesome products come great customers which, in turn, bring in the income and revenue.
Whereas a customer-driven approach implies that first, a business goes out and gets data on its consumers, and subsequently creates a product based on the information gathered.
In a product-driven approach, the development of visions start from the internal process in the company; in the customer-driven approach, visions start from outside the company, particularly in the marketplace where the consumers are.
Customer-driven organizations already presume that customers do exist, and they have a fixed behavioral pattern, particularly in terms of what they want and need. These customers do not change. The only thing left to do for the company is to identify what those wants or needs are, and understand them.
Then you will have to find ways to meet these wants and needs.
On the other hand, a product-driven company does not assume that there are consumers for the product. However, they will utilize business strategies to attract customers and make them realize that they want and need the product. In this approach, the consumers do not have stable patterns of behavior, and it is up to the business to change or alter their behavior or attitude in a way that will be beneficial (and profitable) to the company.
Values based marketing is somewhat similar to a customer-based one.
This means focusing on the customer gains you’ll be offering and the customer pains you’ll be taking away to make their jobs much easier. Value propositions are the basis for your company’s success and an essential part of a systematic business and marketing strategy.
The term was introduced by Alexander Osterwalder in his book ‘Value Proposition Design: How to Create Products and Services Customers Want’.
Value proposition canvas
Value Proposition Canvas (VPC, Value Offer Template) can significantly facilitate the search for an innovative offer for the market. It is like an add-on component to Business Model Canvas (BMC, Business Model Template), created for an in-depth description of product value to the customer. VPC lets you design, test and builds your company’s value proposition in a very clear, structured and purposeful way. Similar to a business model template, it helps in the process of developing your company’s business model.
The template business model, that includes 9 blocks, provides a panoramic view of the whole business. The value proposition canvas focuses on two of them, with which everything starts. These are blocks Offered Value and Client Segment. Thus, in the new Canvas, you can paint these blocks in much more detail, as well as describe their correspondence with each other. A business needs to ensure this “corresponding” if they want to develop their business, but the business model is also vital. In other words, these are two complementary mechanisms, not exclusive ones. They are created to work together, and as such, they produce the best results.
Value proposition canvas example
Here is an example of a Value proposition canvas for Tesla.
You see that the right side and the left sides match. Tesla understood very well the potential target audience for an electric car. You can see that the job-to-be-done is to commute to work. But it is not just about that. Being different from others and convey an image of success is an important social aspect of the job-to-be-done for this customer segment. Besides that, the person wants to be comfy while traveling long distances. The pain when it comes to electric cars is that there is an absence of charging stations. You have to search for a parking spot that has a charging point. On top of that, pains are that you frequently have to charge your car, and while driving, you can be afraid that you never reach your destination. Design, being recognized for good taste and getting praise from friends are some gains in this particular example. Other gains are safe travels and premium battery technology.
If we look at the left side of products & services, we see that Tesla has understood their target audience extremely well. Stunning design including a 17-inch screen no vehicle has ever had such a large screen. Just a few options, which radiates exclusivity. Aside from that, Tesla has 8 years of battery guarantee. We can say there is a fit between the left side and right side of this Value Proposition Canvas.
Benefits of values based marketing
A strong and impactful Value Proposition is vital for any company to effectively engage and communicate with customers, partners, stakeholders, and critically internal employees, by clearly communicating how it is different, better and worth buying from. The Value Proposition is central to the overall business model (it’s no accident that it’s at the heart of Alex Osterwalder’s Business Model Canvas) and should form the anchor for all decision-making, operations, and customer engagement. It is more than a set of words; more than a set of marketing messages; it is the framework for how the business aligns its activities and output with its target market’s requirements, to deliver a compelling experience that can ultimately be monetized through an exchange of value. In this respect, the Value Proposition is key to validating your business idea; both as you start up and as you expand. Here are the benefits and advantages that should be considered as you go through the process of finding, articulating and recognizing your Value Proposition:
Whether you’re a start-up or an established business enterprise launching a new product or service, you’re unquestionably excited about your concept. Yet this enthusiasm can often blind you if you’re not careful. If you’re not clear about your Value Proposition at the outset you risk developing something that may satisfy your needs, but not those of your desired customers. A Value Proposition gives you direction by specifying your ideal target audience right up-front and then determining and understanding a core need that you look to satisfy with your planned solution. A clear Value Proposition thus helps you prevent wasting time, budget, and effort by offering products or services that aren’t appropriate or attractive to your target consumers; and then trying to marketing and sell to customers who won’t purchase from you anyway.
Whether you’re a start-up or a well-established business enterprise releasing a new product or service, you’re unquestionably excited about your concept. Yet this enthusiasm can often blind you if you’re not cautious. If you’re not clear about your Value Proposition at the outset you risk creating something that may satisfy your needs, but not those of your desired customers. A Value Proposition gives you direction by defining your ideal target audience right up-front and then identifying and understanding a core need that you look to satisfy with your planned solution. A clear Value Proposition thus helps you avoid losing time, money, and effort by offering products or services that aren’t relevant or attractive to your target customers; and then trying to marketing and sell to customers who won’t buy from you anyway.
Improves customer understanding and engagement
The Value Proposition gives you the basis to engage with clients compellingly and powerfully by understanding how they view you, and your products or services. Without this alignment, you may be talking to prospects and customers in ways that bread misunderstanding or even alienation– and people who feel misunderstood don’t purchase! The Value Proposition identifies the factors that not only make a difference to your audience but do so in aspects or ways that are meaningful to them, as opposed to superfluous ‘gimmicks’ or peripheral features. By grounding your solution in an understanding of your audience and their specific need, you can engage with them in a far more compelling and effective manner.
Provides clarity of messaging
Especially as a start-up with no brand recognition, you’re going to have to paint a very clear picture as to why you’re worth people’s time. Often though, many business’ marketing messages end up being unclear and indistinct, thereby losing their impact and persuasiveness. The Value Proposition frames not only how you’re creating value for your audience by addressing a core demand, but critically why your solution is better than what they are currently doing or using, or versus whatever else is potentially out there that could do so. It also asks the question “how are you remarkable?”– what is it that, in your customers’ minds, makes you worthy of their attention and interest? By thinking in this way right up front, and creating these facets directly into your product or service, you have the basis to define a clear, consistent and engaging message that will resonate with your audience. At an execution level, a refined Value Proposition will specify the right wording and phrasing for your marketing messages by taking them directly from the articulation of your Value Proposition statement; these can then be tested across keyword targeting and ad copy, etc. This, in turn, is a method for verifying your Value Proposition directly with customers as you move forward.
Increases effectiveness of marketing
The values based marketing directs your marketing efforts to concentrate on those tasks that will generate the greatest results. By really understanding your desired customers and their core need that you’re resolving for, you’re able to focus on the channels and vehicles that are most relevant and will effectively communicate the advantages and perks of your solution.
An effective Value Proposition works on many levels; inspiring and directing the team internally, as well as offering clarity, confidence, and assurance to leads and customers. It is the shape of your brand and your business. A powerful Value Proposition is THE most important asset that you will create, whether you’re starting up, pivoting, or launching a new initiative from within an established business.
Summary of values based marketing
Values based marketing offering value is a free way to understand your client and offer him something that is really important to make a breakthrough in your business. Its uniqueness lies in the fact that all other ways to find the right fit for your client’s needs (analogs, overshoot, surveys, etc.) involve expensive and often inefficient solutions.
If you learn this method and apply it to your team, you will better understand your clients’ needs and offer them what best meets them, otherwise, you may miss the unique opportunity to make a breakthrough and timely strategy reversal.
A clean template of a value proposition canvas, print it out and make sure you create a valuable product!