If you were asked what distinguishes your company, are you clear about what your answer would be?

If you answered yes, congratulations! You know the value proposition of your business. If not, don't worry. In this article we will explain how to identify what makes your company unique and what distinguishes it from your competitors, and we will guide you through the process of developing your value proposition.

Let's start by answering, what is a value proposition?

To put it simply, the value proposition is the "heart" of the company, it is what differentiates it from the competition and, therefore, it is the reason why a customer prefers you over other companies.

Take Apple for example, what would you say makes it different from other technology companies? It could be its simple functionality, its design and aesthetics, or the user experience that gives the brand a sense of exclusivity and recognition. 

As you can see, having a clear idea of your value proposition is important because it allows you to establish an effective and trustworthy link with your customers.

How to identify your value proposition?

Since the value proposition is what distinguishes a company from the rest and makes a customer prefer it, the first thing to do is to identify that added value that your company has and that makes it stand out.

Now, to identify your company's differentiator, you must know what are the benefits for the buyer and the physical or evident characteristics of your product or service. The sum of these elements will give you the added value of your product or service.

Among the benefits may be quality, competitive price, punctuality of delivery, safety or reliability. While some physical characteristics can be an attractive design, ease of use or type of materials.

Continuing with the Apple example, we can identify its added value in the following aspects:

• Imnovation: it has created a concept around its products, as they are unique and with very specific characteristics.
• Quality and design: it plays with going out of the conventional but without leaving quality aside.
• Customer service: through its stores it offers a personalized service to its customers and, by having control over its internal system, it turns that service into something exclusive.

Can you identify the differentiating elements of your product or service in these aspects? For example, is your raw material biodegradable, is your price more competitive, do you distinguish yourself by the punctuality of your deliveries?

Keep in mind that both the benefits and the features of your product or service have to be aligned with the needs, tastes and preferences of the buyers. Also consider that a product or service has value to the extent that it manages to solve a problem or satisfy a need in the best way.

How do you know if you already have a value proposition? 

It is possible that your business already has a value proposition but you have not identified it. To find out, answer these questions:

• If your company disappeared tomorrow, would there be a gap in the market?
• What do you offer that is different from other companies or that adds or adds value to the supply chain of another company?
• Why should a customer buy from you (quality, price, service)?

If you are unable to identify what makes your product or service stand out, don't worry. Below we will guide you in building and executing a value proposition.

We have taken this information from the Supplier Development Program available in the ConnectAmericas Academy. If you are interested in expanding the content, we suggest you review Module 1.

To help you define your value proposition, we propose a series of questions. You will see that each one is intended to help you recognize certain elements in the product or service you offer.

You can download this form to help you. This material is also available as part of the Supplier Development Program.

1. What do you offer your buyers? List the attributes of the product or service you offer to solve their need.
2. Why is what you offer different? Think about what advantages your product or service has that your competitors do not.
3. How do you do it? Identify how you organize the company and its internal processes to generate what your buyer really wants, as well as adjustments or changes you have made to increase productivity.
4. To whom do you offer your products or services? Identify the type of buyer you are targeting.
5. How do you distribute the product or service? Think about how you deliver the products according to the type of buyer it should reach (parcel, direct delivery, etc.).
6. How do you measure whether the buyer is perceiving your value proposition? This question refers to the analysis schemes you implement to know if the buyer is recognizing the benefits of the product or service.

You can build your value proposition using a tool called the value proposition canvas, which helps you visually identify how your business delivers benefits to the marketplace.

The value canvas consists of two parts: 

• Customer profile: allows you to clarify your understanding of your buyers.
• Value map: describes how you intend to create value for your buyers.

To complete the value proposition canvas, follow these steps:

1. Choose a buyer segment, which may be one you already know or one you want to reach.

2. Complete the customer profile, which consists of the following parts: 

• Customer needs and problems: what they want to solve or what needs they are looking to satisfy (making payments, communicating achievements, placing orders).
• Pains: discomforts or annoyances of the customer that prevent them from getting the results they would like (a product does not work well, a service failed and they have to contact technical support).
• Joys: results and benefits that customers want to obtain (receiving a package in a shorter time than expected, knowing in advance how much they will pay for a service).

3. Now let's move on to the value map. In this part you will describe what you offer to your customers and how you are going to apply what you have learned from their pains and problems.

• List the product and service features of everything you offer.
• Pain relievers: answer how your product or service relieves buyers' pain. 
• Joy creators: answer how your product or service generates joy for your customers (e.g. with talent management, logistics, package assembly, automatic billing service).

4. Place the customer profile next to the value map and assess whether the pain relieving and joy creating products or services align with the pains and joys you identified. If so, you can now refine your value proposition; if not, if any of the elements don't fit, it means they don't create value. Repeat the above steps until you identify a customer need that your product or service can solve.

To clarify how the value proposition canvas works, let's use an example.

Imagine that your business is a vegan organic food store. Your customers are people concerned about their health care and environmental conservation, and they believe that by consuming these foods they can help address both. That is their need.

But they face the problem that they don't know how to prepare many of these foods, or the preparations they know have already bored them. That is their pain. They would like to know how to get more out of the products they consume (joy).

In your store you have a wide variety of products and you know the benefits and nutritional possibilities of all of them. A pain reliever would be for you to guide them on how to combine the products in new ways. And you would create joy with products such as a recipe book or baskets designed by you that contain a variety of foods that can be combined to create new and different dishes. You could also offer cooking workshops to show them how to prepare the foods they eat in your store.

The purpose of the value proposition canvas is for you to test ideas quickly and learn how to analyze your buyer and you can implement improvements and adjustments to your value proposition.

Here you can download the matrix to create your company's value proposition canvas. Remember to polish your proposal to make it unique and differentiate it from your competition, but align it with the needs and preferences of your customers.

As you will see, generating a value proposition involves a process of constant learning and improvement. 

Don't get discouraged if you identify mismatches between the product or service you offer and what your customers need. Take the time to evaluate the pains you plan to alleviate and the joys or gains you can bring to your customers and make the necessary adjustments. This is the only way to find what makes your business stand out and explain why your offer is unique.