#21: Why You Need to Rethink Your Startup's Value Proposition with Lisa Dennis
Super excited to have Lisa Dennis, author of Value Propositions That Sell, join me this week. I’ve had so many conversations with founders of HIT startups that revolve around value propositions - what they are, why they’re important, and how to craft one that communicates well.
You simply can’t get away from it - for startups and big enterprise alike, good value propositions drive sales and convert leads. So join us as Lisa explains how to rock your market with solid value propositions.
Lisa shared a little of how she got into the business of crafting value propositions. Just like many other professionals who’ve joined me on the podcast, she worked in a variety of roles before settling into the job she currently loves.
Initially, she worked with software products, eventually transitioning into the role of creative product manager. In this position she basically created products out of a database. With years of experience in sales and marketing, she has firsthand knowledge of how value propositions can influence leads.
She also noted that during her time in sales she probably wrote some of the worst value propositions. At that time, training wasn’t available for creating value propositions that customers can relate to.
But she’s always been intrigued by value propositions - partly because they’re so difficult to craft and partly because there’s so much misinformation out there about them. That’s where Lisa comes in. She helps companies create value propositions that resonate with target audiences.
The key: Look beyond your product
In my experience with value propositions, I’ve observed that most startups miss the mark because they struggle to zoom out and look at their product from the customer’s perspective. And Lisa confirmed this observation.
Most startups are so in love with their own offerings that they miss what matters to the buyer. Value propositions are less about what your product DOES and more about what your customer NEEDS.
This mindset change is especially difficult in health tech because most startups are founded by engineers and product builders.
But value propositions must connect to the customer or else they’re useless. We need to set aside our product features and step into the customer’s shoes.
How you can step into the customer’s shoes
When Lisa helps startups rethink their value propositions, she takes four main steps to look at the big picture.
Scan competitors’ messaging
Organize and analyze data
Here’s the breakdown of how she does this. With internal interviews, she wants to get employees’ and founders’ perspectives, and she wants to give them a chance to get their opinions out of their system.
Then she interviews customers. She draws from three different kinds of customers - those who love you, those who are new customers, and those who have moved on or opted to not use your product.
In the final phase, she analyzes competitors’ messaging. These rivals are defined as such by your BUYERS, not by you. She takes the customer’s viewpoint because she wants to compare you with companies your buyers associate you with regardless of who you think your competition is.
What comparison can show you about your messaging
Comparison with competitors can show you three important things:
Where there’s overlap
Where there are gaps
Where there’s potential to differentiate
Many companies think they have unique messaging when, in reality, their wording is almost the same as their competitors. By collecting data on things such as taglines, descriptions, and content creation, Lisa can highlight any themes or repetitive ideas across companies.
Should trends affect your value proposition?
It’s easy to settle into trendy concepts that everyone is talking about. For instance, in HIT the hot topics are AI machine learning, consumerism, and patient engagement. While these concepts aren’t bad, people talk about them so much that no one seems to know what we’re talking about anymore.
Rather than using wording like “patient engagement,” Lisa says to actually think about what you mean when using that term. Then say what you mean WITHOUT using the term “patient engagement.”
Don’t settle for generic wording. Instead, say what you mean and mean what you say. And preferably say things that matter to your customer.
Is there a “one size fits most” formula?
You can definitely get quick, easy templates, but Lisa is a firm believer that “one size fits most” actually fits no one. As much as this applies to clothing, it applies even more for HIT startups. The reason for this is because most buyers in health IT are so diversified.
Especially in B2B, you’re dealing with multiple influencers and decision makers. You need a value proposition that will get down to the real issue and motivate response from the most important person on the deciding team.
Three kinds of value propositions
There are three main kinds of value propositions that companies create. First, there are feature function propositions. These, as we already hinted at, focus on all the cool things your product can do but sadly most customers don’t care about… at all.
(A little hint: if your value proposition starts with the name of your company, you’re probably crafting a feature function proposition.)
Then there are alternative value propositions. These focus on comparing your company to your competitors. Often it involves pitching yourself against a leader. Alternative propositions are difficult to do well. Plus, in this day and age there’s so much more competition out there.
The last kind of proposition is the kind Lisa firmly believes in - buyer focused propositions. While this can include good information about your offering, it primarily focuses on what matters most to the customer. Buyer focused value propositions will take the most effort but will also reach your target audience much better than any of the other options.
Is there ever a reason to create multiple value propositions?
According to Lisa, you can’t go wrong by creating a buyer focused proposition. However, there could be some cases where you might want to craft additional propositions using feature function or alternative propositions.
Most the time these propositions wouldn’t be used until your customers are further down your sales funnel or. In these instances, it could potentially be helpful for sales teams to use these other types of value propositions.
Practical advice for creating your own value proposition
You need to start by talking with stakeholders and potential buyers. Feel their pain points. Start to collect data about all their challenges drawing from customer language as much possible. Listen for any repetitive themes or ideas. These will be key in building your future value proposition.
Then do your competitor analysis and hone your messaging. Don’t clutter your value proposition with every strength of your product. There will be plenty of time in the future to emphasize your awesome tech specs to potential customers. Right now, you’re trying to help them see how you can answer their pain and provide a solution.
Lisa says to think of your value proposition like a mirror. You want to be careful about whose face customers see when they turn it around. Do they see your company’s face? Or do they see their own?
When should startups launch a value proposition
Immediately. Even if your product isn’t on the market yet or is still in beta testing, you desperately need a value proposition. According to Lisa, this language is vital to start conversations with potential investors and subject matter experts.
Lisa is currently working with several startups who haven’t launched products yet. Often they build their value propositions around an idea and then have to refine their direction. This is totally ok.
Your mindset in this needs to be that of a listener and a learner. Be willing to watch your idea morph and change. If you’re not willing to follow market demands, your product may never meet the real needs customers have.
To wrap this all up, there are three characteristics that you need when you’re creating a value proposition.
Be a learner.
Be a listener.
One of Lisa’s favorite business books is Discover Questions by Deb Calvert. It’ll teach you how to create really solid questions that help you do discovery in sales and marketing. According to her, it’s such a great approach for those who want a strategy for listening intentionally.
To Sell is Human is her other reading recommendation. The basic premise is that we sell whether we like it or not. If you’re human, you’re a salesman (in the positive sense). The negative connotations we have of sales comes from a misuse of our sales instincts.
Want to connect with Lisa? Find her here:
Twitter - @knowledgence
www.valuepropositions.expert - check out her value proposition course
Masterclass on BrightTalk
First session: Live value proposition makeovers
Second session: Buyer focused value propositions
Third session: Value proposition mechanics for sales and marketing
Like what you hear?
And, as always, if you need help with your marketing…
Let’s talk. You can book your free consulting session with me today.