Is Your Value Proposition Still Relevant?
Post-pandemic recovery offers a unique opportunity for discovery and reassessment. Chances are your organization was disrupted by the pandemic in a plethora of ways, as were your staff, members, subscribers and customers. At the most basic level, the pandemic forced people and organizations to work differently, and in that process, to re-evaluate what is important, both personally and professionally. Marketing General Inc.’s Membership Marketing Benchmark report reveals some sobering findings about the impact of the pandemic. “In addition to the news about meetings taking a hit, membership has suffered a blow as well: Nearly half (45 percent) of associations surveyed reported a decline in membership renewals, doubling the rate of the previous year. And associations say they’ve seen a decline in new member acquisition (37 percent) compared to those who’ve seen an increase (29 percent).” With inflation continuing to rise, our hunch is that even many publishers and subscription companies are or will begin to see similar declines in subscription retention and limited success in new customer acquisition.
We all know that change is constant. Staying a step ahead of the trends is critical to remaining relevant to your audience. The north star for providing value and meaning to stakeholders is your value proposition. And that promise needs to constantly evolve to reflect your stakeholder’s needs and market conditions.
Value on the Line
Your value proposition reflects your insight and understanding of what your members, subscribers and customers need from you. According to HubSpot, “your value proposition is the core of your competitive advantage. It clearly articulates why someone would want to buy from your company instead of a competitor. A great value proposition could be the difference between losing a sale — and closing it.”
Unfortunately, many executives assume that their value proposition always stays the same as a constant of sorts. And worse, they assume that value proposition is the same for all active and prospective members, customers, and subscribers.
The most common mistake is confusing the value of what you sell with what you think is valuable. For example, selling on price is a sign that you have not done your homework. If your primary reason for someone to buy a product or join your organization is a discount, you are missing the opportunity to sell your intrinsic value. The race to the bottom of discounted sales also tells the prospective member, subscriber, or customer that you don’t understand them. Professionals don’t look to an association for a bargain. They are searching for insights, education, and inspiration to do their jobs better. Individuals joining, buying, or subscribing from organizations for personal reasons may consider affordability, but generally they are looking to effectively fill a need or want with valuable solutions offering many benefits.
Yes, everyone wants to save money. But a low price is not what creates customer loyalty, a trusted relationship, and member engagement. Tadiran Group CEO Elad Peleg was quoted in Fast Company that “legacy companies have a hard time accessing their inner startup because they’re used to their tried-and-true processes.” He proposes, “looking beyond revenue growth and closely studying what products and services people actually use, and whether they sustain their engagement over time.”
Demonstrating that you can uniquely meet a need better than anyone else eclipses discounts as the reason for why someone will decide to join your community and/or make a purchase. According to the Benchmark research, “Associations reporting increases in their new members and overall membership in the past year are significantly more likely to say their association’s value proposition is very compelling or compelling.”
According to Marketingmo.com, “A customer retention strategy is about keeping the customers you’ve invested in to acquire. And if you’re in an industry where your customers make multiple purchases over the years, your entire team should be very focused on retaining those customers. How? By delivering service that’s consistent with your value proposition and brand.”
Defining Your Value Proposition
A value proposition is not a slogan, tagline, or market positioning. To be effective, a value proposition must answer three key questions to ensure success. By addressing these questions, you can craft a meaningful message about your value and keep your workforce aligned on the same page in understanding your core operating principles.
- How does your product or service solve problems for your members, subscribers, and customers?
- What specific benefits can members, customers, and subscribers, expect from you and how do these benefits address their needs?
- Why should members, customers and subscribers buy from you rather than your competitors?
To create a functional value proposition, you must understand the different segments of your customer base and how the value proposition needs to be fine-tuned for each segment. For example, for an association, career advancement needs vary by career stage. Thus, continuing education needs to be designed for a range of professional experience and job responsibilities.
For a publisher or subscription company, content and product need to evolve to be relevant to the life stage or career stage of a customer or subscriber. Needs and wants must speak directly for continuing value to be felt. Communication of the value proposition is key, and messaging needs to vary by segmented preferences and interests.
Don’t Guess — Test Your Assumptions
At 2040, when work with our clients we continually encounter assumptions about what members, customers and subscribers need to be made by staff, at all levels, including the board; and yet, these assumptions are rarely tested. Many of our clients have conducted some research on the customer and member needs, but this tends to be based on one-time studies with no follow-up. And out of cost and time restraints, there is often heavy reliance on descriptive data obtained through surveys. Rarely have we found organizations that take the time to conduct mixed-method and ongoing research to test assumptions, develop hypotheses, and identify changes and trends.
Your Value Proposition Is an Investment
Treat your value proposition as an investment, a critical asset that is the crux of your ongoing strategy. We have worked with a variety of clients to help them develop their value propositions. This is a cross-functional effort that takes critical thinking to challenge the status quo and identify questions that need further investigation. It also takes talking with current, former, and prospective members, customers, and subscribers. And it takes time to test, learn and refine.
It is not easy work. But it pays off handsomely. We have seen examples of double-digit, acquisition and retention rates for our clients as a result of value proposition deep dives. We have developed a proprietary value proposition development process that identifies needs, and then develops products with features that can be communicated as benefits to meet these needs. The further development of messaging drives action based on the benefits. We have also developed a process to help map various products, programs, services, and experiences offered to the individuals comprising the market based on their needs by segment. Please reach out to us to collaborate on developing a value proposition that will strengthen your business through the strength of your brand.
Get in touch with us!
2040 helps organizations navigate the sea changes of finding their new normal. We offer actionable expertise in the strategy and operations of digital growth and engagement, empowering an empathetic workplace culture, strengthening your value proposition and driving revenues. We’ve been in your shoes and we know what impedes transformation … and what unlocks it.
Onward and upward from the 2040 Team