What is a value proposition? Quite simply, it’s the core marketing message that your business puts out to explain why someone should buy your product or service. Having an effective one can make a huge difference to the number of customer enquiries you receive – so here’s how to achieve one.
The most famous value propositions are found in retail businesses, such as the food, sports and fashion industries. But they can be found anywhere that goods or services are traded. So how do you build a value proposition for an intangible long-term service such as financial planning?
Here are 10 tips for crafting and communicating a winning value proposition.
Some advisers focus on their expertise and experience as the 'value' of working with them, but that's really more about the adviser's traits than the actual value to the client. Other advisers may offer platitudes such as: ‘We provide you with peace of mind.’ But what does that mean in terms of evaluating value – and how can you measure it to substantiate a successful track record to sell on to other clients?
A good value proposition needs to be a clear and concise statement, communicating what you do in such a way that a prospect can instantly understand it.
As an adviser, you have a big advantage for developing a value proposition because you can go directly to existing clients and ask for feedback as part of your service. Ask them questions such as:
Not only will the answers provide insight into your business and how others perceive you, you can also take their responses and build your value proposition around them.
To build the right proposition that suits your talents and business objectives, think about how you'd like clients to see you. The Profession of Independent Financial Advisers president Daniel Brammall says advisers should think about: ‘What role do you want to occupy in your client's mind? Do you want to be a technician or a sage? There are pros and cons to each, so it's whichever one suits your personality. Some of us like to be very technically gifted; some of us like to give wisdom and counsel.’
This should help fine tune the words you use and the tone of voice that gives your value proposition a character and personality unique to you.
When it comes to defining your ideal client profile, are you going to make it generic, so you'll go for a wider appeal, or are you going to work out exactly who you want to target and build a value proposition that directly reaches out them?
Based on how your business operates, you should have a good idea of what works best for you. Whether that's charging a premium for a bespoke style arrangement or creating lower-cost options that are available to the masses, thinking about exactly who you're trying to reach will help you create a value proposition with the strongest appeal.
Think about the structure of your interactions with clients – do they mainly want you to deal with one aspect or provide more holistic advice across a bigger picture? You can then decide if you want to focus your value proposition on being a specialist advice provider or someone who takes a more general approach to help people and their overall situation.
Daniel Brammall highlights the importance of being clear about what exactly it is you're offering. For instance, do you go with something like 'Here are the tools we've got available to everyone – take your pick', or are you more along the lines of, 'You come to me and present your scenario, and I'm going to make sure we solve the problem'. It's essential that whatever you're offering comes across in your value proposition – and is pitched as a benefit.
The secret behind the best value propositions is differentiation – what is it that makes you stand out from the crowd and worth doing business with? Don't rely on well-worn phrases spouted by every adviser, such as 'tailored solutions' and 'best interests'. Instead, cultivate your value proposition to address what sets you apart. One of the best ways to do this is through your niche. Once you hone in on a particular target market, your unique value proposition will become clear. Remember that prospects are likely to be thinking: ‘Does this adviser understand me?’
If you specialise in a certain area, you understand it, and you'll know your clients – their wants, needs, situations, problems and challenges. When you structure your value proposition around your niche, you'll be pushing all the right buttons.
For example, suppose you frequently work with doctors. A prospect, who happens to be a doctor, asks you: ‘Why should I work with you?’ and you reply: ‘Well, many of my clients are doctors so I understand the specific financial issues you face.’ And you've nailed it. Your prospect figures out that if you work with people just like them, it immediately demonstrates a propensity to build and keep relationships with that particular type of person.
It's always good to think outside the box and be inspired by the business world's best value propositions. Here's a taster:
Stripe: ‘Web and mobile payments, built for developers’ – A set of tools that empower businesses to accept and manage online payments targeted at developers and business owners. Its proposition highlights Stripe's emphasis on simplicity.
Lyft: ‘Rides in Minutes’ – An on-demand car service for people who need a simple method for getting from A to B. This gets the message across clearly that Lyft provides local taxi services without any delays.
Evernote: ‘Remember Everything’ – An app for organising aimed at busy individuals and professionals. Two words that stand out as giving you the ability to organise your notes all in one place, so you never forget a great idea.
Once you've got the gist of it, see if you can come up with a simple, to the point positioning statement that explains what benefit you provide, for who, and how you do it well. It should describe your target buyer, the pain points you solve, and why you're distinctly better than the alternatives.
The foundation of your value proposition should communicate ROL effectively. Financial life planning pioneer Mitch Anthony boils it down to six key pointers:
Of course, you have to deliver on those things and not just say them. Yet Mitch Anthony's framework for a ROL value proposition provides a good description for clients, as well as a guideline for where advisers should focus their energy.
Help more clients to discover the value you provide – by discovering the value of an Unbiased plan.