Value Propositions: What They Are & How To Create Them (with Examples)

Summary

This video by Dan Demsky, co-founder of Unbound Merino, explores the concept of value propositions, which are promises made to customers post-purchase. It emphasizes the importance of understanding customer needs and desires beyond the product itself, using Unbound Merino's high-performance clothing and other examples to illustrate how value propositions can enhance customer connection and sales. The video also offers practical advice on identifying and articulating a business's value proposition through customer jobs, pains, and gains, and encourages direct customer engagement for valuable insights.

Takeaways

• 😀 A value proposition is a promise made to customers post-purchase, ensuring that the product will outperform expectations and solve a specific problem.
• 🏷 The value proposition extends beyond the product itself, offering a deeper understanding of the benefits and impact on the customer's life.
• 👕 Unbound Merino uses value propositions to communicate that their products offer more than just clothing; they provide simplicity, reduced laundry, and an easier life.
• 📱 Pela Case positions its product as the world's first compostable phone case, with the value proposition being sustainability and a reduced carbon footprint for consumers.
• 🛠 Intelligent Change sells products that aid personal development and growth, emphasizing the value of life improvement over the individual items offered.
• 🤔 Identifying a value proposition requires thinking from the consumer's perspective, focusing on their desires, needs, and wants rather than just product features.
• 🔍 The 'Jobs to be Done' (JTBD) framework helps to understand why customers buy products, by considering what job the product is being 'hired' to do.
• 🧳 Unbound Merino's products are hired to streamline and upgrade customers' wardrobes, providing high-performance clothing for various uses, including travel.
• 😖 Recognizing customer pains, such as the inconvenience of traveling with heavy luggage, is key to understanding how a product can offer a solution.
• 💰 Describing customer gains, such as time and money saved, helps to articulate the specific benefits of purchasing a product.
• 📊 Understanding the customer profile through jobs to be done, pains, and gains can help align value propositions with customer needs and desires.
• 📞 Engaging directly with customers through interviews or calls can provide valuable insights into their experiences and motivations for purchasing.
• 🛍 Shopify offers a free 14-day trial and robust tools to support business growth, as recommended by the co-founder of Unbound Merino.

Q & A

What is the main focus of the video script?

The main focus of the video script is to explain the concept of value propositions, how they are essential for businesses to stand out from competitors, and how to identify and communicate a business's value proposition to customers.

Who is the speaker in the video script?

The speaker in the video script is Dan Demsky, a co-founder of Unbound Merino, an e-commerce apparel brand.

What is the definition of a value proposition according to the script?

A value proposition is defined as a promise made to the customer post-purchase, essentially stating that the purchase will outperform their expectations and solve a specific problem.

How does Unbound Merino communicate its value proposition to customers?

Unbound Merino communicates its value proposition through its website, particularly in the header text and product page copy, emphasizing high-performance clothing and the benefits of 'wash less, wear longer, simplify your life' with their merino crew.

What is the value proposition of Pela Case as mentioned in the script?

The value proposition of Pela Case is that they offer the world's first compostable phone case, providing consumers with the ability to live more sustainably and reduce their carbon footprint.

What is the core value proposition of Intelligent Change according to the script?

The core value proposition of Intelligent Change is to provide tools that positively change one's life, focusing on personal development and growth beyond the individual products they sell.

What are the three key considerations for developing a value proposition as suggested by the book 'Value Proposition Design'?

The three key considerations are: 1) Customer jobs, understanding the job the product is hired to do. 2) Customer pains, identifying the problems or obstacles the product alleviates. 3) Customer gains, describing the specific benefits the customer will receive from the purchase.

How does the script suggest understanding the 'jobs to be done' framework?

The script suggests understanding the 'jobs to be done' framework by thinking of the product as being hired to do a specific job for the customer, which helps in focusing the value proposition around the problem the product solves.

What is the importance of customer pains in crafting a value proposition?

Customer pains are important in crafting a value proposition because they identify the problems, obstacles, or risks that the product helps to alleviate, directly addressing the customer's needs and making the value proposition more compelling.

How can businesses identify their value proposition more effectively?

Businesses can identify their value proposition more effectively by getting to know their customers well, using surveys, and engaging in direct conversations with customers to understand their desires, needs, and the benefits they seek.

What is the role of Shopify in the context of the video script?

In the context of the video script, Shopify is presented as a platform that supports businesses in building and scaling their operations, offering a free 14-day trial and robust tools to help businesses grow.

Outlines

00:00

🛍️ Value Propositions for Business Success

This paragraph introduces the concept of value propositions, explaining their importance in differentiating a business from competitors and enhancing customer connection. Dan Demsky, co-founder of Unbound Merino, uses his brand as an example to illustrate how value propositions go beyond the product, focusing on the benefits and solutions offered to customers. The paragraph emphasizes the need to communicate these benefits clearly, such as Unbound Merino's promise of high-performance clothing that simplifies customers' lives by requiring less washing and wear. It also provides examples from other brands like Pela Case and Intelligent Change, which highlight sustainability and personal development as their value propositions, respectively.

05:00

📈 Crafting Your Value Proposition: Strategy and Customer Insight

The second paragraph delves into the strategy behind creating a value proposition, discussing the importance of understanding customer jobs, pains, and gains. It outlines the 'jobs to be done' framework as a method to identify why customers purchase products and how to position products as solutions to specific problems. The paragraph provides examples of customer pain points that Unbound Merino addresses, such as reducing travel luggage and simplifying wardrobes. It also stresses the importance of customer gains, such as time saved, as part of the value proposition. The speaker suggests engaging directly with customers through interviews and surveys to gain insights into their experiences and motivations for purchasing. Finally, the paragraph promotes Shopify as a platform that supports business growth, offering a free trial and emphasizing its role in enabling businesses to realize their value propositions.

Keywords

💡Value Proposition

A value proposition is a promise made to customers about the benefits they will receive from a product or service, post-purchase. It is central to the video's theme, as it helps businesses stand out from competitors and connect with customers. In the script, the value proposition is exemplified by Unbound Merino's promise of 'ultimate everyday high performance clothing' and the idea that their products offer more than just clothing, but a solution to simplify customers' lives.

💡Customer Expectations

Customer expectations refer to the anticipated benefits or outcomes customers believe they will receive from a purchase. The video emphasizes that a value proposition should outperform these expectations. For instance, Unbound Merino's value proposition suggests that their clothing will not only meet but exceed the expectation of high performance, as indicated by the header text on their website.

💡E-Commerce

E-commerce is the buying and selling of goods or services using the internet, which is the platform Unbound Merino uses to sell their apparel. The video discusses how e-commerce businesses can use value propositions to attract and retain customers, as demonstrated by Unbound Merino's online presence and their strategy to communicate their value proposition through their website.

💡Product Differentiation

Product differentiation is the process of distinguishing a product or service from competitors in the market. The video's theme revolves around using value propositions as a tool for differentiation. Unbound Merino differentiates itself by emphasizing the high-performance aspect of their clothing, not just selling t-shirts but a lifestyle of simplicity and sustainability.

💡Customer Jobs

In the context of the video, 'customer jobs' refers to the tasks or needs that customers are trying to fulfill when they purchase a product. The script uses the framework 'jobs to be done' (JTBD) to illustrate how understanding these jobs can clarify a product's value proposition. For Unbound Merino, the 'job' their clothing is hired to do is to streamline and upgrade the customer's wardrobe with high-performance pieces.

💡Pain Points

Pain points are the problems, obstacles, or frustrations that customers experience and seek to alleviate through a product or service. The video discusses how identifying and addressing these pain points can strengthen a value proposition. Unbound Merino addresses the pain points of travelers by offering clothing that reduces the need for extensive luggage, simplifying their travel experience.

💡Customer Gains

Customer gains refer to the benefits or positive outcomes that customers receive from using a product or service. The video highlights the importance of articulating these gains in a value proposition. For Unbound Merino, customer gains include time saved from reduced laundry and easier travel due to lighter packing.

💡Sustainability

Sustainability, as discussed in the video, is the ability to exist or continue over time without depleting resources or causing harm to the environment. The Pela case example illustrates how sustainability can be a key part of a value proposition, offering customers the benefit of reducing their carbon footprint and living more sustainably.

💡Personal Development

Personal development refers to the process of improving one's skills, abilities, and knowledge for personal growth. The video uses Intelligent Change as an example where the value proposition is not just the products they sell, but the broader promise of aiding in personal development and growth, which is a significant motivator for customers.

💡Market Differentiation

Market differentiation is the strategy of making a product or service stand out in the market by offering unique features or benefits. The video's main message is about using value propositions for market differentiation. Unbound Merino achieves this by focusing on the high-performance aspect of their merino clothing, which sets them apart from standard apparel brands.

💡Customer Insights

Customer insights are the understanding and knowledge about customer needs, preferences, and behaviors. The video suggests that gaining customer insights, through methods like surveys and direct conversations, is crucial for crafting a compelling value proposition. Dan Demsky's example of conducting hour-long interviews with customers for insights is a testament to the importance of this approach.

Highlights

A value proposition is a promise made to customers post-purchase, ensuring the product will outperform expectations and solve a specific problem.

Value propositions are more than the product or service itself, offering a deeper understanding of the benefits customers will receive.

Unbound Merino's value proposition is communicated through the header text, promising high-performance everyday clothing.

The copy on Unbound Merino's product page emphasizes the value of simplifying life through less washing and more wearing of their merino clothing.

Pela Case's value proposition is sustainability, offering consumers the ability to reduce their carbon footprint with compostable phone cases.

Intelligent Change's value proposition focuses on personal development and growth, selling tools to positively change one's life.

Identifying the value proposition involves thinking from the consumer's perspective and focusing on their desires, needs, and wants.

The book 'Value Proposition Design' suggests breaking down the customer profile into jobs, pains, and gains to better understand their needs.

Jobs to be done (JTBD) framework helps in understanding why customers buy products and the specific job the product is hired to do.

Unbound Merino's clothing is hired to streamline and upgrade customers' wardrobes, solving the problem of needing less luggage while traveling.

Understanding customer pains, such as the inconvenience of traveling with heavy luggage, helps in crafting a compelling value proposition.

Describing customer gains, like time saved from reduced laundry or luggage waiting, is essential in articulating the value of a product.

Surveys and direct conversations with customers can provide valuable insights into refining a business's value proposition.

Engaging with customers through interviews can uncover the motivations behind their purchases and help in understanding the value they seek.

Shopify offers a free 14-day trial to support businesses in scaling and growing with a reliable and robust tool.

Learn With Shopify provides actionable tips for growing online businesses, encouraging viewers to subscribe for more insights.

Dan Demsky, co-founder of Unbound Merino, shares his experience and knowledge on crafting effective value propositions for businesses.

Transcripts

Why do customers really buy our products?

In this video we're going to talk about value propositions, what they are and

how to identify what your business's value proposition is, to help you stand

out from your competitors, connecting more deeply with your customers,

and ultimately help you sell more.

So let's dive into it.

Hey everybody.

My name is Dan Demsky and I am a co-founder of Unbound Merino,

an e-commerce apparel brand built right here on Shopify.

Let's start out by simply asking, what exactly is the value proposition?

At its core, a value proposition is a promise you make to

your customer post-purchase.

You're essentially saying,

this purchase will outperform your expectations and solve

the problem that needs solving.

A value proposition is bigger than the product or service itself.

On our website, we use value propositions to help our customers

better understand that what we're selling is more than just a t-shirt.

If you look at our website the first thing you'll notice is the

header text which says, the ultimate everyday high performance clothing.

So right out the gate, we're promising high-performance clothes.

But the promises have to run deeper than just a quality claim.

Our job is to help customers see the layers of value they'll

receive or the benefits they'll experience as a direct result of

making a purchase on our website.

So let's look a little further.

The copy on our t-shirt product page is there to explicitly communicate

our value proposition: wash less, wear longer, simplify your life with our

best-selling hundred percent merino crew.

As you can see right next to our product photography, we are

communicating three things about our products, but more importantly,

we're showing potential buyers

the holistic impact our product will have in their life.

We sell t-shirts and other high quality merino clothing.

But what people are actually buying is simplicity, less washing, more

wearing, and a less complicated life.

That's the value prop.

And it carries through other parts of our website, advertising

and marketing materials.

Now let's look at another website, pela case.

Pela case is a brand that makes phone cases.

That's the product.

But the value proposition is the promise they make to their customers.

Look at the main header on their homepage.

Front and center it says, meet Pela, the world's first compostable phone case.

This is the value proposition.

The product is a phone case.

The value is giving the consumer the ability to live more sustainably

and reduce their carbon footprint.

While you're selling a physical good, what the customer is really

buying is the sense of satisfaction of being a better global citizen.

Product, phone case.

Value proposition, sustainability and becoming a part of the solution.

Let's take a look at one more website that's built its business

on a rock solid value proposition.

Intelligent Change.

The value proposition is the first thing you read on their homepage.

Tools to positively change your life.

They provide a wide range of products like the five minute journal,

which is a gratitude journal, the productivity planner, which is a task

managing workbook and an hourglass timer for 30 minute work intervals.

These products are great, but the value isn't the relatively

common items that they sell.

You can get those just about anywhere.

The real reason people buy products from Intelligent Change is that they

sell the larger value proposition of personal development and growth.

And that's bigger than any individual product on the site.

The key to honing in on your value proposition is to think from the

perspective of the consumer focus on their desires, needs and wants

.That focus is far more important than any detail or features of

the products that you're selling.

The book titled Value Proposition Design from the Strategyzer series

breaks the customer profile into three sections.

Here are three important things to consider when coming up with your

value proposition for your customers.

Number one, customer jobs.

Think of your product from the perspective of being hired to do a job.

There's a framework called jobs to be done, JTBD, that will help

you focus your thinking around why customers buy our products.

In a nutshell, what job is my product being hired to do by the customer?

It sounds a little weird, but looking at purchasing like hiring can bring a lot

of clarity to your value proposition.

With our products, clothing, we asked the question, what jobs are

people hiring our clothing to do?

We're not a fashion brand,

so we know people don't hire our clothing for the job of gaining

social status or appearing trendy.

Our clothing is hired for the job of solving a specific problem.

Streamlining and upgrading their wardrobe with a few quality pieces of

gear that perform day in and day out.

Travelers, both business and pleasure, hire Unbound Merino to reduce the

amount of luggage they need to pack from a big suitcase to a small carry on.

Traveling gets easier and better when they invest in our value proposition.

By knowing the jobs to be done with clarity, we can equip

ourselves with the right messaging in our ads and on our website.

Number two, customer pains.

Think of your product as a solution to your customer's pain points.

What problems, obstacles or risks does your product help alleviate?

In our case, we've spoken before about the annoyance of traveling with lots

of luggage, waiting at the luggage carousel, the risk of your checked bag

or missing, or being stolen, the hassle of having to schlep a big bag through

a new city or up a flight of stairs.

Our value proposition directly solves this by allowing our customers

to pack less and travel more.

Our value proposition is all about providing a solution to

the customer's pain points.

Number three, customer gains.

Describe the specific benefits that your customer will gain

when they purchase your product.

Gains can include money saved, social gains, extra utility, etc.

For Unbound Merino, some of the gains could include time saved by not having to

wait for checked luggage or not having to do as much laundry at home or on the road.

If you break down your customer profile by listing the jobs to be done, customer

pains and customer gains, you can begin to pair value propositions with

specific needs and identifiable desires that will motivate your potential

clients to become loyal customers.

Get to know your customers as well as possible.

That's the best way to hone in on your value proposition.

Surveys can help but in my experience, talking to actual customers on

zoom or on a phone call is the best way to tap into the well of

insights that they could provide.

I emailed customers and asked them if they'd be willing to have a full

hour long phone call, where I could interview them about what led them

to make a purchase on our website in exchange for a hundred dollar gift card.

You'd be surprised at how willing customers are to spend some time

with you and share their experience.

There's a lot to learn here obviously, from the big thought provoking aha

moments to just picking up on the little nuances in the language customers

use when describing your products.

Both are extremely helpful in decoding and articulating value propositions.

Now that you've taken the time to consider the value proposition of your

business, you may need some helpful tools to turn it into a reality.

At Shopify

they believe that running a business should be a possibility for them.

Which is why they offer a totally free no risk 14 day trial.

If your business requires a reliable, robust tool that will allow you to

scale and grow your business, be sure to check out the link below to

access the full Shopify platform.

Shopify will fully support you in building the business of your dreams

just like they've done for me.

If you found this video to be helpful, make sure that you give it a thumbs up.

That actually helps the channel and community grow.

For more simple, actionable tips to grow your online business make sure

to subscribe to Learn With Shopify,

so you don't miss out on future releases.

As always, thank you so much for watching.

I'm Dan Dempsky.

I'll see you next time.