How to Craft a Perfect Value Proposition with 10 Proven Templates (with Examples)

Opublikowano Kategorie Bez kategorii

When you pitch it is crucial to state clearly what is the value proposition. One sentence will do. One carefully crafted sentence that says it all. You can use the template. There are several good ones you will find circling internet. I have my personal favourites. They are Hack Ventures high pitch concept, Geoffrey’s Moore positioning statement Steve Blank’s XYZ. There are many more I will also revise briefly but I do think those three really work best. They are simple and easy to understand. Both for the person crafting them and for those who have to understand them.

Remember that getting your value proposition right is critical to your business model. Not only to sum up the intro but also to talk about the project in every business situation you need to. You can have the best features, the most perfectly executed presentation, the most stunning price, but no one will ever know of it if they don’t get past your high-level value proposition.

But how do you craft such a value proposition? Use the template. I know. Your first thought is, well… it’s a template meaning everyone else’s value proposition will be almost the same. Not necessarily. You fill the template with your words and your ideas. Plus according to science the brain does not want totally new. It wants the old done slightly differently. Meaning that the brain of the audience and the investors does not want a totally new pitch overtime they hear one. They want the one they know only done differently. To craft such new-old-value-proposition you need are applicable examples from entrepreneurs and investors who have successfully given and taken thousands of pitches.

Here are my favourite templates with examples. Plus few more.

Venture Hacks’ High-Concept Pitch

High concept pitch is not an entirely new concept. It also does not even refer to startup industry only.

In Made to Stick: Why Some Ideas Survive and Others Die, brothers Dan and Chip Heath explain how high-concept pitches such as ‚Jaws on a spaceship’ (Alien) and ‚Die Hard on a bus’ (Speed) convince movie executives to invest vast sums of money in a project on the basis of almost no information. The book continues the idea of „stickiness” popularised by Malcolm Gladwell in The Tipping Point, seeking to explain what makes an idea or concept memorable or interesting. The information served must be simple, based on the proven industry example and served as the fresh one. In their book Pitching Hacks Nivi and Navel from Venture Hacks explain and share examples of this technique applied to startups.

During her highly successful pitch Cindy Wu from Experiment (formerly known as Microryza) used this technique by saying that they are Kickstarter for research. And this is how this template works. It is [Proven industry example] for/of [new domain]. the samples are:

  • Kickstarter for research (Experiment formerly pitched as Microryza)
  • Flickr for video (Youtube)
  • LinkedIn for Scientists
  • Friendster for dogs (Dogster)
  • The Firefox of media players (Songbird)

A high concept pitch distills a startup’s vision into a single sentence. It’s the perfect tool for fans and investors who are spreading the word about your company. It is easy to remember and easy to understand. Providing of course the proven industry example is well recognised and mutually understood.

Geoffrey Moore’s Value Positioning Statement

This next example is probably the most popularised one. It is based upon Geoff Moore’s ideas presented in his seminal book Crossing the Chasm. This renown author suggests a specific template for outlining your value positioning. I like this template very much as it not only helps to outline your value proposition but it also introduces a second statement focused on competitive positioning. And that helps, too. The template goes as follows:

For  ____________ (target customer), who ____________  (statement of the need or opportunity), our (product/service name) is  ____________  (product category), that (statement of benefit) ____________ . Unlike ____ (primary competitive alternative), our product ____ (statement of primary differentiation).

When applying this template to your startup remember that it is extremely important to:

  • specify the target customer well, avoiding the statements that are too general, like ‘internet users’ or ‘working parents’. Of course it is not possible to put all the details in this one sentence but try to be as specific as it is possible.
  • be specific about the need or opportunity your clients are looking for.
  • remember that saying there is no primary competitive alternative will not get you far. Even if there is no direct competition there is always indirect one. Do not fool yourself. And do not fool the audience.

You can for example craft something along the lines.

For non-technical marketers who struggle to find return on investment in social media and use Facebook ads manager on the regular basis, FastTony is a web-based software that helps optimise campaigns and use the features available only to few agencies.Unlike Facebook Ads Manager it helps optimise the budgets and target the audiences even better.

Steve Blank’s XYZ

My other favourite value positioning statement is the one Steve Blank coined. He states that a Value Proposition is a ten-dollar phrase describing a company’s product or service. To be precise it’s the “what are you building and selling?”. To make that crystal clear to your audience he suggests using the following format.  To share a value proposition statement that other people understand simply say “We help X do Y doing Z” or “I help X do Y doing Z” depending on your narrative. The X stands for your target customer, Y stands for the need or opportunity they are looking for and Z states for how we do it. For example:

We help non-technical marketers optimise the budgets spend on their campaign in social media by turning engagement metrics into revenue metrics and offering better targeting options.

Good thing is you can mix that with the second part of the Geoffrey Moore’s Value Positioning Statement. With this mashup you basically cover all your audience needs to know about the project. This would go like:

We help non-technical marketers optimise the budgets spend on their campaign in social media by turning engagement metrics into revenue metrics and offering better targeting options. Unlike Facebook Ads Manager it helps optimise the budgets and target the audiences even better.

Vlaskovits & Cooper’s Customer-Problem-Solution Value Proposition

In their book The Entrepreneur’s Guide to Customer Development: A cheat sheet to The Four Steps to the Epiphany, authors Cooper and Vlaskovits introduce what they call a Customer-Problem-Solution presentation. It is simple to understand and navigate template that goes like this:

Customer: ____________ (who your customer is).

Problem: ____________(what problem you’re solving for the customer).

Solution: ____________ (what is your solution to this particular problem). 

Using this template results in slightly longer and maybe even more insightful value proposition statements. For example:

Customer: I believe my best customers are marketers working for small and medium-sized business (SMB) markets and companies.

Problem: Who cannot easily measure  and optimise campaigns on Facebook because existing solutions are too expensive, complicated to deploy and simply not available to those marketers.

Solution: Low cost, easy to deploy web-based ads tool system designed for non-technical marketers who need to optimise their budgets and target audiences better.

Dave McClure’s Elevator Ride

This next value proposition template is somehow similar to Venture Hacks concept. It is a a 3-step check list for creating positioning statements  that Dave McClure presents In his How to Pitch a VC presentation. Dave states it has to be short, simple, memorable and include the; what, how and why. It should be no longer that 3 keywords or phrases. You should really keep it simple and avoid expert jargon.

„Mint.com is the free, easy way to manage your money online.”

It’s a bit similar to the approach represented by Sequoia Capital. They strongly advice to summarise your company on the back of your business card. And I agree it’s a great exercise.

David Cowan’s Pitchcraft

This one is a lot more elaborative so I would not advice it in a 3 minute pitch. But the truth is you can also use this format at the beginning of your presentation. The template is quite universal and it uses fear as main attention grabbing tool. So I strongly recommend it i.e. health and medical startup presentation. In this template you first highlight the enormity of the problem you are tackling, then you directly tell the audience what your company sells or what your product is. With this template it is important to distill the differentiation down to one, easy-to-comprehend sentence. What is even more important is that to establish credibility you need to share the social proof or the pedigree of the entrepreneurs, customers, or the investors.

During this presentation 3 people will die because of wrongly administered or taken drugs. We offer a dr. Pocket app for iPhone that enables people to easily monitor their drug taking habits and avoid wrong doses. We have worked on this patented technology with the medical researchers and best technology engineers from the Technical University in Gdansk.

Eric Sink’s Value Positioning

To be honest I think that Eric Sink’s value positioning statement may seem easy to understand and easy to use but it can also be the least persuasive one. Eric writes that marketing is somewhat like an iceberg – the part sticking out of the water is highly visible. For this Eric suggests the following format for positioning. The format that is very much rooted in marketing and advertising narratives. It concludes of the following:

  • Superlative („why choose this product”).
  • Label („what is this product”).
  • Qualifiers („who should choose this product”).

Using this template you could say:

  • The easiest ads creating and targeting software for Facebook.
  • The most secure payment gateway for mobile e-commerce.
  • The easiest to navigate messenger for visually impaired people.

I highly recommend it a summary but not as the sole value positioning statement.

The VAD approach

Guy Kawasaki takes a verb-application-differentiator approach in describing the startups that he’s working with. It is again a great template to use when you want to summarise the intro part of your pitch. It is the most dynamic way of talking about your solution as it includes actionable verbs. It is what I call a Call-to-action kind of pitch template. It uses the simple scheme that consists of verb, application and differentiator. for example you can describe Slideshare as something that allows you to Share PowerPoint and Keynote slides including audio to collect leads and drive traffic to your website. When describing Postrenous you can say that you can Save time and create and write blogs via email.

Clay Christensen’s Jobs-to-be-done Value Positioning Statement

When you are preparing your pitch you absolutely must remember about the users perspective. You need to know what are the customers’ jobs. Harvard Business School Professor Clay Christensen states that there is no better way to designing an innovative customer value proposition than to begin with genuinely understanding the customer’s jobs-to-be-done (JTBD). He explains that JTBD is not a product, service, or a specific solution; it’s the higher purpose for which customers buy products, services, and solutions. It is based on the the conviction that I also share that people do not buy the things but they „hire” them to do a job. Using this template requires the action verb (what the target group representative can do), object of action and contextual identifier (the context in which the job can be done). So you could state:

  • Record you videos with just one click
  • Manage personal finances at home
  • Track your progress online

Simon Sinek’s WHY

Simon Sink is one of my favourite researchers and speakers out there. His theories helped me understand better our decision making processes and why I resonate with some brands and ideas while I totally forget the other. According to this renown author, “People don’t buy what you do; people buy why you do it.” Sinek’s Golden Circle framework shows you how to turn an idea into a social movement by leading a focus on WHY. It’s great to craft the message like that for your startup, too. The template consists of three simple questions: why, how and what. The most important thins in this step-by-step process is to clarify your Why, articulate your Hows, and then the importance of being consistent in What you do. In his TED talk he says that one company has done that pretty well over the years. Can you guess?

Why: In everything we do, we believe in challenging the status quo. We believe in thinking differently.

How: The way we challenge the status quo is by making our products beautifully designed, simple to use, and user friendly.

What: We just happen to make computers.

The Minto Pyramid aka SCQA

SCQA stands for Situation, Complication, Question, and Answer. It is also known as The Minto Pyramid Principle. It generally helps you organise ideas to write compelling business documents. It be memos, presentations, emails, blog posts or – key to all the former – value propositions. You can use it wherever you want it but first you have to master it step by step.

  • Situation – describe what is the current situation
  • Complication – describe the issue in the situation
  • Question – describe the question in response to the issue
  • Answer  – suggest answer to ease out or mitigate the issue

For example you can state that:

With the rise of smartphones and online video the use of data has exploded. Consequently, wireless networks become congested and slow. How can mobile operators increase their quality of service? Our patented routing algorithm helps mobile operators radically increase throughput.

That’s it. !0 proven templates to help you pitch better and communicate your value proposition whenever you need it.