How do you improve the lives of your customers?
This question is an absolutely fundamental one for every online retailer.
If you don’t have a clear understanding of the value you provide, you’re putting yourself at an immediate and unnecessary disadvantage. It’s likely that everything from your site design to your positioning and marketing will suffer as a consequence.
Furthermore, if you’re just starting out, it’s even more essential to hone in on exactly what you offer to potential customers.
Creating and testing a strong value proposition will likely yield significant improvements across all of your key metrics, from your overall conversion rate to your average order value.
In fact, we believe that testing of value propositions should be a key part of any ecommerce conversion optimization strategy. At Growcode, we’ve consistently found that testing of value propositions leads to exceptional results (like +23% gain for one of our clients).At Growcode, we've consistently found that testing of #ValuePropositions leads to exceptional results (like +23% gain for one of our clients). #Ecommerce #EcommerceTips Click To Tweet
In this post, you’ll learn how to create and test a value proposition that speaks directly to your target market.
We’ll also delve into practical examples from some of the web’s most successful ecommerce stores.
Let’s dig in!
A value proposition is simply a statement of the different ways you provide value to your customers.What is a #ValueProposition? A value proposition is simply a statement of the different ways you provide value to your customers. #ecommerce #EcommerceTips Click To Tweet
It answers a crucial question that every ecommerce customer is asking: “Why should I buy from you instead of your competitors?”
It details how you solve major pain-points experienced by your potential customers and how you improve their customer experience by adding further value.
It can refer to specific benefits, like fast and free shipping, or more general emotional experiences, like ease and convenience.
Amazon, for example, solves the fundamental issues of poor product choice and slow shipping by providing a diverse selection of products available with expedited delivery.
But it also further improves the customer experience with a host of extra benefits, like one-click delivery, gift-wrapping, time-saving features like wish lists and saved items, and an enticing loyalty program (Amazon Prime).
On a practical level, your value proposition will be expressed as a simple statement describing which problems your store solves, positioning yourself against the competition and highlighting key features.
Etsy, for example, provides an opportunity for customers to buy handmade products. One of the major complaints in the ecommerce space is that mass-made products lack the personal touch and specialness of handmade products. By providing a marketplace that connects buyers with artisan sellers, it provides a neat solution to this problem.
Growcode also recommends this eBook:
Ecommerce Optimization Checklist of a 7+ Figure Online Store
There’s a lot of confusion around terminology when it comes to this topic. And the truth is there are no exact definitions. In fact, terms like “mission statements”, “slogan”, “USP”, and “value proposition” are all related and feed into each other.
Let’s take a quick look at some key terms:
USP – A value proposition is not a unique selling proposition (USP), which refers to a specific unique feature of your online store. But your USP will be included in your value proposition in terms of the unique value it provides. One of Amazon’s USPs, for example, is one-click purchasing. The value that this feature provides is ease and convenience.
Mission statement – A mission statement is a customer-facing description of the aims and philosophy of your company. It describes what you hope to achieve in the industry and how you hope to do it. E.g. Microsoft’s mission is: “To help people around the world realize their full potential.”
Slogan – A slogan is a short, often one-sentence phrase that summarizes your value proposition as quickly as possible.
Both mission statements and slogan are important. But they derive from your value proposition. They’re not the value proposition itself.
So how do you go about crafting a “killer” value proposition? We outline a specific process below. But first, here’s a short checklist to help you get closer to that winning mix:
When a client comes and asks for our help in increasing their website traffic, we always revert back to business basics.
We sit down and help them re-discover their unique selling proposition. They are often lost for words when you run them through the hypothetical of:
I’ve just landed on your website, it looks just like every other website. So why should I buy from you?
It’s our opinion, that unless you have a unique and compelling offer, there is little point in sending a user to a digital asset like your website.
Callum Mundine – Digital Marketing, OneEgg.com.au
Your value proposition should be evident to customers irrespective of where they land on your site. We recommend three key places to include information about your value proposition:
Creating a powerful value proposition that moves the needle isn’t easy.
But it’s not impossible. So it’s important to cover all the necessary bases.
Here’s the five-step process we recommend:
1. Define your market’s problems and delights – Note the inclusion of both problems (like expensive delivery and limited product choice) and delights. Along with alleviating pain, a good value proposition provides customers with greater and more “delightful” benefits. Many companies now donate a portion of each sale to charity, for example. This doesn’t solve a major pain-point but it is a nice added benefit.
2. Hone in on underserved markets – Including elements in your value proposition that cater specifically to underserved markets enables you to catch those “easy wins”, broadening your potential customer base significantly. Many ecommerce stores, like Amazon, offer special discounts to students, for example.
3. Include unique selling propositions – What features do you provide that are unique to your ecommerce store? Furthermore, what specific value do they provide? Warby Parker, for example, sends five pairs of glasses to customers to sample, providing a greater degree of hands-on choice than competitors.
4. Create a statement of your value proposition – Everything comes down to your value proposition statement. Once you’ve listed the problems you alleviate and the benefits you provide, accounted for underserved markets, and identified your USPs, it’s time to bring everything together into a few sentences. A statement of your VP is also useful for aligning your whole company, ensuring that day-to-day activities are geared towards fulfillment of your proposition.
Use the following template to build your VP:
a. A statement made up a few sentences that summarizes your overall VP. This is where you communicate the key value-points of your VP.
b. Bullet-points that outline USPs, supporting features, and smaller benefits.
c. Small “booster” features that you provide that will appeal to specific segments of your market and customers with unique problems (such as shipping to remote places).
5. Put together convincing design, marketing and packaging materials – How will new customers become aware of your unique proposition? Does your slogan, marketing strategy, mission statement etc. mirror your commitment to your VP?
Specifically you will communicate your value proposition in the following places:
a. On your website – On your homepage, in your header and on your product pages.
b. In your promotional materials – Such as in your newsletter, online advertising, discount offers etc.
c. Whenever you have a physical interaction with a client – Such as when a package is delivered.
Here’s a big one that many people overlook! Once you’ve put together all the pieces of your value proposition, it’s crucial that you test it.
Here are a few easy ways to gauge the effectiveness of your new value proposition:
It’s always good to learn from companies that have already created fantastic value propositions. The success of these established and fast-growing online retailers is in large part due to the fact that their value propositions are so unique.
Here are five examples of online retailers that we think have superb VPs:
If you’re in an industry, where products are identical, or very similar to the competition, you need to work even harder to differentiate your business through a unique value proposition.
This has never been more applicable since Amazon is looking to eat up even more of their share of the ecommerce landscape – and sometimes they’ll do it at a loss.
You may need to offer more than one thing to stand out too, we offer: free fast shipping, free gifts with each purchase and no hassle warranties for any issues.
We’ve tested it and our conversion rate drops off dramatically if we don’t offer the above.
Christian Sculthorp, Store Owner, Vaped.com
Your value proposition is fundamental to your business. A great proposition gives customers a reason to shop with, refer you their friends, and keep coming back. It will align your whole company – including your marketing, sales and customer service departments. It also will help you create high-converting promotional materials and build a loyalty program that deals directly with your customers’ needs and wants. It should also be considered when developing a website or even software through techniques such as ATDD and TDD.
Whether you’re an established company eager to gain a greater market share, or a startup thinking about positioning, there’s no substitute for a winning value proposition.Whether you're an established company eager to gain a greater market share, or a startup thinking about positioning, there's no substitute for a winning #Value#Proposition. #ecommerce #EcommerceTips Click To Tweet
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