Today few business concepts are as topical and ‘buzzwordy’ as that of an organizations’ value proposition. The subject of constant debate and conjecture, a value proposition can be defined as a “positioning statement that explains what benefit you provide for who and how you do it uniquely well”.

Here’s the thing: most people don’t care. That is, most people spend their days in a busy, if not hurried state, focused on their own problems and priorities. Adding to the marketers’ challenge is that the average American will see between 4,000 and 10,000 ads per day. While the traditional advertising approach is fighting for a potential customers’ attention, that customers’ subconscious mind is actively blocking out the noise so that they focus the finite amount of mental processing we have available to us. Because concentrated mental tasks deplete a major brain function known as executive function, our subconscious mind helps us to limit the number of stimuli we focus on to preserve our higher cognitive function for our more important decisions. We simply lack the time and mental capacity to actively pay attention to 4,000 – 10,000 inputs a day in addition to all of the other tasks our day demands of us.

Understanding the ‘sea of noise’ challenge, we have two choices as business leaders;

  1. Be mental distraction # 10,001 and try to compete for limited, waning attention; or
  2. Focus where your customers focus

If we choose the latter path (which this author recommends), there is a fluid, three-step process to crafting an effective positioning statement to highlight your value proposition. Before you start, get yourself some Post-it® Notes.

Step One: Identify your Ideal Customer Avatar

If your business is in the B2C space, you are reverse engineering a person. If you’re a B2B player, you are crafting an ideal business to sell to. The parameters change, though the process is identical.

Using one trait per Post-It® note, list off all of the demographic information you know (hypothesize when you don’t) about your ideal customer. Examples would be as follows;


B2C example

B2B example

Location Residential community Neighborhood, City, or State/ Province
Income Household income (example $75K – $99K) Annual revenue ($2M – $5M)
Industry Occupation (ie dentist) Industry, including any niche (example railway construction)
Age 35 – 65 years of age Business cycle (start up, scale up, etc)

Once you’ve brainstormed (or listed, if you have the available data) the key demographic typifiers of your ideal customer, it’s time to repeat the exercise for their psychographics. More important than where they live and work – is how they think; how and why they make their purchase decisions.

Important psychographic considerations for an individual might include their goals, their values, their career objectives, and even their relationship with their boss (and spouse). Psychographic considerations for a business might include when they need to submit a budget, whether or not a potential vendor aligns with their organizational values, and who they are competing against (and how that drives their competitive spirit and strategy).

You will know your work is complete through this first step when you have a crystal clear picture of the individual you are looking to sell to, or you can imagine yourself walking the halls (or through the warehouse as the case may be) of the business you’re trying to supply to or service.

Step Two: Understand their pain, goals, and needs

Once you have that clear picture in mind, the next Post-it® exercise is to brainstorm all of the perceived (or known) pain points your ideal customer faces. Start with their pain points, because according to research, 70% of all purchase decisions are to ease pain, only 30% to gain something or seek out pleasure. Keep in mind their pain is not just associated with your product or service. They also may be kept up at night by competition, dwindling profits (or losing money), imposter syndrome, leading a team, or their children’s hectic school and sports schedule. Focus on the likely pain points your ideal customer would be facing, tied to their position, industry, and any other information you know about them.

With their pain points listed, shift your focus to their goals, both personally and professionally; as well as individually and organizationally.

Finally, narrow the focus on your scope of services, and what your ideal customer needs you for. What does success in your transaction or working relationship look like to them? If you don’t know, this is where customer interviews or focus groups can be particularly effective.

By this point you’ll have an ideal customer avatar covering both demographics and psychographics; as well as goals and challenges (pain points). See an example here.

Step Three: Now it’s your turn

Once you’ve spent this much time in your customer’s shoes – you can finally craft your positioning statement. In order to do so, the third Post-it® exercise is to list off your skills, experience, and product and service features that are the perfect match to your customers’ pain points and goals. The goal here is not just to elevate your business in your customers’ eyes, it is to differentiate. After all, as marketing expert and bestselling author Sally Hogshead put it, “different is better than better”.

When businesses and leaders go through the process in this order, the findings are quite profound. Instead of innovating your product or service in a vacuum, the light bulbs go off when companies realize exactly how they provide value to their customers, or how a new innovation they were about to spend millions on might not.

Put simply, instead of going to market as “we make X, who needs that?” businesses can go to market as “we know this is who you are, and what you need/ struggle with, and so this is why we (make/sell) X.”. As one of my mentors, Dr. Marilyn Taylor, professor of leadership studies at Royal Roads University puts it, “don’t be an answer looking for a question”.

Once you’ve completed your brainstorming, a priority sequence is given to your product and service features, and company competitive attributes, according to the urgency and importance of the problems they solve for your ideal customers. For instance, an accountant would miss many an opportunity by leading with “providing timely and accurate financial statements” if they were also able to provide “insight into latent profit potential” for their customers.

In the above example, the positioning statement at the heart of their value proposition says nothing of the accountants’ experience, training, or credentials. Their value proposition speaks only to the value realized by their customers. If this was your accountant, would you really care what software they used, or where they went to school? As long as they help you stay tax-compliant in ethical ways, what you really care about is finding out where your business is leaving money on the table.

In closing, your value proposition is not about you. Value is in the eye of the beholder. The beholder is your ideal customer avatar. Since they’re the ones paying the bills, they get to determine what value means. Put your customers in charge of your marketing, and your sales team will be forever thankful!

Originally published here.