Archdiocese of Tuguegarao

LYCEUM OF APARRI
3515 Aparri, Cagayan North
COLLEGE OF ENGINEERING
Module in Techno (Technopreneurship)
Week 3 - 4
Customers
Value Proposition
What Is a Customer?
A customer is an individual or business that purchases another company's goods or services. Customers
are important because they drive revenues; without them, businesses have nothing to offer. Most public-
facing businesses compete with other companies to attract customers, either by aggressively advertising
their products or by lowering prices to expand their customer bases.

KEY TAKEAWAYS

 Customers are the individuals and businesses that purchase goods and services from another business.
 To understand how to better meet the needs of its customers, some businesses closely monitor their
customer relationships to identify ways to improve service and products.
 The way businesses treat their customers can give them a competitive edge.
 Although consumers can be customers, consumers are defined as those who consume or use market
goods and services.

Understanding Customers
Businesses often honor the adage "the customer is always right" because happy customers are more likely
to award repeat business to companies who meet or exceed their needs. As a result, many companies
closely monitor their customer relationships to solicit feedback on methods to improve product lines.
Customers are categorized in many ways. Most commonly, customers are classified as external or
internal.

External customers are dissociated from business operations and are often the parties interested in
purchasing the final goods and services produced by a company. Internal customers are individuals or
businesses integrated into business operations, often existing as employees or other functional groups
within the company.

Studying Customers
Businesses frequently study their customers' profiles to fine-tune their marketing approaches and tailor
their inventory to attract the most customers. Customers are often grouped according to their
demographics, such as age, race, gender, ethnicity, income level, and geographic location, which all may
help businesses cultivate a snapshot of the "ideal customer" or "customer persona." This information
helps companies deepen existing customer relationships and reach untapped consumer populations to
increase traffic.

Customers are so important that colleges and universities offer consumer behavior courses dedicated to
studying their behavioral patterns, choices, and idiosyncrasies. They focus on why people buy and use
goods and services and how it impacts companies and economies. Understanding customers enables
businesses to create effective marketing and advertising campaigns, deliver products and services that
address needs and wants, and retain customers for repeat business.
Customer Service
Customer service, which strives to ensure positive experiences, is key to a successful seller/customer
dynamic. Loyalty in the form of favorable online reviews, referrals, and future business can be lost or won
based on a good or bad customer service experience. In recent years, customer service has evolved to
include real-time interactions via instant message chats, texting, and other means of communication. The
market is saturated with businesses offering the same or similar products and services. What distinguishes
one from another is customer service, which has become the basis of competition for most businesses.

Customers vs. Consumers

The terms customer and consumer are nearly synonymous and are often used interchangeably. However,
there exists a slight difference. Consumers are defined as individuals or businesses that consume or use
goods and services. Customers are the purchasers within the economy that buy goods and services, and
they can exist as consumers or alone as customers.

What is value proposition mean?

Value Proposition. Definition - What does Value Proposition mean? A value proposition is a statement
that convinces customers to buy a product or service. It highlights the most important aspects of the
product or service that will make a positive difference in the lives of the potential customers and to the
success of the business.
A value proposition is a declarative statement that explains why a customer should purchase your product
or service. It clearly explains what differentiates you, or makes your offering “unique,” and why you are
the best choice on the market.

Value is a word that has nearly lost its meaning. This five-letter word has been overused and abused by
brands across every messaging statement, across every website page, across every sales email. The way
we “do business” has changed and our messaging must change as well.

Brands that truly offer value to their customers — and communicate that value in a meaningful way — are
the ones that will weather economic storms. Brands that demonstrate how they are uniquely positioned
to meet buyer needs are the ones that will be noticed while their competitors are overlooked.

Most organizations have established value propositions, like 69 percent of B2B firms. Yet, 54 percent of
brands do nothing to optimize their value propositions.

Now is the time to do something about your unique value proposition. That starts by understanding the
definition of a value proposition statement, the necessary elements, and how other experts and brands
are executing value propositions in a meaningful way.

What is a value proposition?

A value proposition is the value you promise to deliver to your customer’s post-purchase. It’s ultimately
what makes your product attractive to your ideal customer. A compelling value proposition meets three
criteria:

1. It’s specific: What are the specific benefits your target customer will receive?
2. It’s pain-focused: How will your product fix the customer’s problem or improve her life?
 3. It’s exclusive: How is it both desirable and exclusive? How well does it highlight your competitive
advantage and set you apart from competitors?
Don’t confuse brand slogans, catchphrases, or even a positioning statement with a value proposition
as they are different things.

Here’s a visualization that will help you avoid that trap

Your value proposition should focus on the superpowers that potential customers get, not the product.
Rarely is your value proposition the product itself or its features. Instead, it’s the way the brand or
product fixes a meaningful pain point, improves the lives of your target audience, and the way it makes
them feel (like they have superpowers, for example).

A value proposition should be front and center when a visitor arrives on your site. Although it’s often
found above the fold on the homepage, you should be aware of other common entrance points (e.g. a
landing page, category pages, blog posts, and product pages).

Even if you manage to create an effective value proposition, it won’t drive sales if it’s tucked away in a
dusty corner of your website or absent on high purchase intent pages.

How to write a unique value proposition

So, what goes into a good value proposition, and where should you begin?

1. Gather voice of customer copy

The best value propositions use voice of customer copy. That is, they use the exact words of your current
customers to hook your future customers.
For example, if they were interviewed for a case study, how would your target customers describe your
product? How does it improve their lives? How do they describe your company? Why do they choose to
associate with your brand?
Interview your customers or send out a survey to better understand how they speak about you, both to
other people and to themselves. Pay attention to common words and phrases they use. Your visitors
should see themselves in your value proposition. The language you use plays a big role in shaping their
perspective.

2. Emphasize clarity before creativity

Above all, you must ensure your value proposition is clear. Sounds obvious, right? Your value proposition
needs to serve many purposes, so achieving crystalline clarity can be quite difficult.

When evaluating your draft, ensure it answers the following questions:

1. What product are you selling?
2. Who should buy your product?
3. How will buying your product improve the visitor or her life?
4. Why should the visitor buy from you and not your competitors?
5. When will the value be delivered?
Your value proposition should be relatively short, 2-3 short sentences maximum. Every word should
improve clarity or make your main selling point more compelling; otherwise it needs to be cut.
 3. Focus on benefits, not hype
How many “World’s Best Coffee” signs would you see in store windows walking down just one
busy New York City street? Dozens. Each sign would make it a little more difficult to believe the
previous.
Hype, which can come in the form of superlatives (“best”) and exaggerations (“world’s best”), can
be dangerous that way. Instead, focus on distinct benefits and the concrete value your product
delivers.
If you need to use hype to sell your products, it’s a sign that your value proposition is not well-
defined. Or, perhaps, even that your product is not as valuable as you think.

Examples of strong value propositions

The best way to get a feel for how value propositions work and how to get them right is to look at some
strong examples.

1. BustedTees
BustedTees uses “brings you the highest quality graphic tees on the net” as their homepage value
proposition.
In this case, they’re betting on the quality of their production materials and designs. The value proposition
is small, but centered at the top of the page.
The site appears to only display the value proposition to first-time visitors, who are more likely to be
unfamiliar.
Note how the value proposition is followed quickly by a relevant call to action. “Hey, we have high quality
graphic tees. Want to shop our bestselling graphic tees?” If your value proposition does its job, it
motivates and inspires action, so make it easy for visitors to take that action.

2. NOVO Watch
NOVO Watch promises to deliver “timepieces handmade in Alberta from repurposed pieces of history”
Instantly, you know the difference between a watch from NOVO Watch and their competitors. The value
is unique and undeniably different.
When you arrive on the site, the value proposition fills the entire page, but you’ll also find the value
proposition reiterated on the product pages.
The continuity from the homepage to the product page is immediately evident. Phrases like “manually
wound timepiece” and “132-year-old train track” reinforce the value proposition, creating a clear message
match.

3. Studio Neat
Studio Neat creates simple products that solve common, everyday problems. That value proposition and
brand ethos is communicated throughout, even though it’s not explicitly stated on the homepage.
Simple products that deliver simple, but desirable value. “Tripod mount for smartphones”, “wood docks
for Apple stuff”, “wide-grip stylus”, “make and store simple syrup”, etc.
The same theme is continued on product pages.
No exaggerations, no complex product details. “On your nightstand or at your desk, it’s nice to have a
designated spot to charge your devices.” Tell me that sentence doesn’t read like a customer wrote it
himself

.
4 important types of value propositions

In ecommerce, your value proposition is more than just the big, bold heading on your homepage. There
are four distinct types of value propositions you should know about when optimizing your store.

1. Your company value proposition

Did you know there’s a difference between the value proposition of your company and products?
Take Studio Neat for example. The value proposition for their company would be something like this:
simple products that solve simple problems. The value proposition for their Material Dock is: it’s nice to
have a designated spot to charge your devices. Now, you can see and feel the company value proposition
in the product value proposition, but it’s important to see the distinction.
Further, in this article, we’re talking about your external value propositions. It all starts with a strong
brand ethos, which is the way you talk about and think about your brand, both internally and externally.
For example, Studio Neat’s brand ethos might be something like this: “subtract until it’s perfect”. You can
see how that ethos trickles down through everything, including the company value proposition and the
product value propositions.

2. Your homepage value proposition

This is the type of value proposition you’re most familiar with. It’s the big, bold heading on your
homepage. Just think back to the NOVO Watch value proposition example above.
Your homepage value proposition will depend on the type of store you run. For example, if you have a
small number of products, your homepage value proposition might be more product-focused. If you have
a wide range of products, your homepage value proposition might be more company- or brand-focused.

NOVO Watch’s homepage value proposition is product-focused, for example.

Timepieces handmade in Alberta from repurposed pieces of history.

They have a relatively small number of products and are specifically focused on watches. If they were to
introduce a line of handcrafted pens made from pieces of history and a line of handcrafted wallets made
from pieces of history, how might their homepage value proposition need to change?

3. Your category value propositions

Don’t overlook the need for a value proposition on your category pages. Why? Just look at the search
engine results page (SERP) for “women’s jeans”.
High rise, low rise, a variety of washes, “fit for your story”. All of these triggers help reinforce the value
proposition. As you can see, though, it’s still quite uncommon to find a clear and succinct value
proposition on a category page.
With so much competition among category pages, especially on SERPs, that’s a huge missed opportunity
that you can step up and capitalize on. Ask yourself what each category of products on your site promises
that’s specific, pain-focused and exclusive.

4. Your product value propositions

A product value proposition goes, you guessed it, on your product page. Each product within each
category needs a specific value proposition. Think back to the Neat Studio Material Dock example above.
Here’s another great product value proposition example from Studio Neat.
 A two-step template for creating a value proposition

Now it’s a matter of combining everything you’ve learned about value propositions to craft one of your
own. There’s no reason to complicate the matter; the process can be broken down into just two steps:

1. Identifying your value proposition.

2. Communicating your value proposition.
The question becomes, how do you get both steps right?

Step 1: Identifying your value proposition

Before you dig into identifying your value proposition, it’s important to frame your thinking properly.
All great value propositions start with one question:

1. What do I do better than anyone else?

Maybe it’s your customer service, maybe it’s your product design, maybe its material quality, maybe it’s
your pricing strategies. It can be anything customers find valuable.

A word of caution, though: your company and products are more comparable than you think. Your visitors
will certainly be comparing you to your competitors, so beat them to the punch. See how your value
proposition stacks up against the promises of your top competitors. What will set you apart in the minds
of your visitors?

Note that small values like free shipping, money-back guarantees and same-day delivery can be useful
conversion tools, but are secondary to your unique selling proposition.
If your answer to, “What do I do better than anyone else?” is “free shipping”, you’re not digging deep
enough. That’s something any store can copy-and-paste, meaning it’s not a defensible value proposition.
Often, identifying your value proposition requires quite a bit of thought and research (customer
interviews, for example).
Please, promote those free post-purchase gifts and shipping guarantees alongside your value proposition.
You will likely capture people on the fence. But that’s just a band-aid if the core value proposition isn’t
unique or compelling.
 Step 2: Communicating your value proposition

Distill what you do better than anyone else into a single sentence and display it prominently. You want to
ensure this is what grabs attention first.

Just like an article headline, many people will read the single sentence value proposition and move on. If
they like it, they might read a brief elaboration or just continue on to the next step. If they don’t like it,
they’ll often just go ahead and leave.

That’s a lot of pressure on just one sentence, so you want to make sure you’re getting it right. That is, you
want to make sure it’s clear and relevant.

It’s a useful exercise to spend the time coming up with 10-15 variations of your initial value proposition.

Now, you want to know which one is the most unquestionably clear. A simple 5 Second Test can help you
with that. In a 5 Second Test, people see your site (with your value proposition) for five seconds and then
answer questions about what they saw. What do they remember? What do they think your site does?
What do they think?

Examples
How to Write a Value Proposition
Now that you’ve seen some examples, here are some tips for writing your value proposition.
The first thing you’ll need to get started with writing your value proposition is a value proposition canvas.
A value proposition canvas is very similar to a business plan canvas: it’s a simple, visual framework for
brainstorming your value proposition.
When filling out your value proposition canvas, you’ll want to answer some questions about your product
and your customer. Here’s an example
 Some questions you’ll want to ask yourself include:
Product
 What does your product do?
 What does it feel like to use your product?
 How does your product work?
 What features does it have?

Customer
 What are the emotional drivers of purchasing?
 What are the hidden needs?
 What are the rational drivers of purchasing?
 What are the risks of switching to your product?
 What do people currently do instead

Exercises/Learning Activities
1. What is a value proposition?
2. What Is a customer?
3. A customer has come to speak to a member of staff to make a complaint. They are threatening to
get you to shut down. Your objective is to resolve the issue with minimum reputation and financial
damage to the company. What do you do?
4. Someone wants a refund but it’s unwarranted. They’re trying to bully you into giving them their
money back for no real cause. What do you say to him/her?
5. Two employees are having a disagreement. There are customers all around and curse words are
being said. As the manager, how do you resolve the issue without scaring off customers?
6. Begrudged former employee is bad-mouthing your company online with all kinds of negative fake
reviews and untrue stories. How do you get him or her to stop without elevating the issue further?

Prepared by:

Engr. Joel C. Canonizado

Dean, College of Engineering