“How could you spend $200 on a tip calculator?!”
“It does other things!”
In a 1998 episode of “Seinfeld,” Jerry buys his father a Wizard electronic organizer. It’s a daily planner, it can receive email and faxes, and there’s a calculator. But Jerry’s dad latches on to a single function of just one of the features and calls the device a “tip calculator.”
A point of humor in the show, but also a keen insight on customer behavior.
We live in a noisy world. And many companies have the sophistication to offer a complex array of features and capabilities with their products and services.
Among all this complexity, people crave simplicity. They want a single, quick understanding of the value they will receive. That is what will cut through all the noise like a knife through butter.
Your product can have many elements of value, but how do you tap into the element that clearly and credibly reaches them and opens their mind? What should the value focus for your products be?
In other words, how do you find your product’s “in”?
First, Get All Possible Value Elements Out on the Table
To find the right value focus, you have to start with all of the possible value elements your company could focus on. One way to do that is a value proposition workshop. A successful workshop would include more than just your marketing team. You want to cast a broad net to determine the elements of value.
Attendees could include the CEO, line of business leaders, product development and design, customer service, sales, R&D, advertising agencies, channel partners, outsourced manufacturers, and internal or external service providers.
Begin by defining which customer(s) the value proposition workshop is focused on. Value, like beauty, is in the eye of the beholder.
Then determine what specifically you are creating a clear “in” for: the entire company, a line of business, a brand, a product line, a precise trim line for a single product. Every company has four essential levels of value proposition, and the most effective “in” can be very different for a specific product than it is for the entire company.
As a marketing leader, you can lead a wide-ranging discussion on what customers might value about your company. Or you might want to bring in an outside consultant. This type of conversation can unearth political squabbles and territorial claims.
Then, Rank the Value Claims
This activity should result in more value claims than you want to communicate through your marketing. So your next step is to rank them in some way. Certainly, they’re not all equal.
There are many ways to rank the claims. At MECLABS Institute, we found the most effective way is by ranking the appeal and exclusivity. (To make things a bit easier for you, we have a simple value proposition scoring sheet in the "Marketing Strategy & Value Proposition Reports Bundle").
Many marketers think of the importance of appeal but stop there. However, if you don’t consider exclusivity, you won’t be able to identify a true “in.” If you product appeal is something that many other companies offer, as well, your marketing is just creating more noise. A true “in” cuts through that noise with exclusivity.
Not only does this process help your brand discover its “in” with customers, it helps you bring alignment to your team and vendors.
“We came in as a very cohesive team, and we came out with a lot more clarity on the direction we were going,” says Scott Fletcher, President and CEO of LocatorX. “When we went through there and weighed [each element of value], everybody walked out with the same vision of ‘these are the key value components.’”
But Ultimately, the Customer Should Decide
At this point in the process, you will have gotten your fellow leaders, team, and vendors aligned on possible directions for your “in.” But it is still just internal opinion. And let’s admit it, we all have a blind spot about our own companies.
So take all of those “ins” your team created — essentially, theories — and expose them to the customer to learn which is really the most effective. There are many ways to do this — through surveys, online focus groups, in-person focus groups, online community monitoring, social media, analytics analysis, etc.
But one of the most effective is measuring actual customer behavior through A/B testing. Here are a few examples:
- Paid Search Advertising — For example, an experiment sought to identify the most effective expression of value for a small-business banking solution from one of the largest banks in North America. The bank worked with MECLABS to run pay-per-click (PPC) ad campaigns and then test on the landing page itself. They tested price, support, growth and many other value categories, and discovered their most effective “in” was simplifying small business banking. The most effective “in” generated a 10% higher conversion rate then the other points of value.
- Social Media Advertising — A local shoe repair shop generated a 60% higher post engagement rate by focusing on its 30 years of shoe repair experience as the “in” instead of the convenient location.
- Email Marketing — Sometimes, your product’s “in” isn’t a single element of value; but rather, the aggregate compilation of the different value points. While the “in” for Jerry’s dad was just the tip calculator feature, the “in” for Jerry was the holistic value provided by a multi-function device. When Consumer Reports conducted a value proposition test through email marketing, it experienced a 7% to 29% drop in clickthrough when focusing on a single element of value – honest and unbiased reporting, personal impact, quality of research, or consumer empowerment— compared to a mixed value proposition.
Daniel Burstein is the Senior Director, Content and Marketing at MECLABS Institute. Daniel oversees all content and marketing coming from the MarketingExperiments and MarketingSherpa brands while helping to shape the marketing direction for MECLABS — digging for actionable discoveries while serving as an advocate for the audience.