From the course: Marketing Foundations: Value Proposition Development

Defining value proposition

From the course: Marketing Foundations: Value Proposition Development

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Defining value proposition

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- Every marketer has their own definition of value proposition. You probably have your own understanding of what it means, too. I like to think of it as an equation that goes on at a point in time in your prospect's mind when they're interacting with your experiences. The equation is a balance between the perceived costs and the perceived benefits of taking action. Let's say your shopper's arrived on your product detail page for a product they're looking for. They're absorbing all the information and making an evaluation of whether they'll proceed to the next step. If their perceived benefits outweigh the perceived costs of taking action, they'll see a positive value proposition and will have motivation to act then your job is simply to facilitate the transaction. If the costs outweigh the benefits though, they'll balance no matter what you do. Notice I said perceived related to the costs and benefits. It's important to recognize that costs and benefits include both tangible and intangible aspects. Your shoppers consider more than just the hard features of your products and service when making a buying decision. All decisions include emotional components as well as logical. In fact, the emotional part of a decision is often the most important part. To improve your marketing experiences, you need to clearly communicate your benefits and you need to counteract or minimize your perceived costs for your leads or customers. To do that, you should consider both sides. The benefits side includes the tangible features of your offering, as well as the intangible benefits specific to your buyer. The costs side includes both the tangibles and intangible costs of your offering and how it affects your buyer. So often, marketers focus a lot of attention on their tangibles, focusing on product feature lists, price discount offers and incentives, while overlooking the intangibles that are affecting their shoppers' emotions. You need to evaluate your experiences from your visitors' perspectives and consider how all components of it contribute to their perception and motivation.

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