Your value as an intermediary goes beyond price – it’s all about the customer experience you provide and the expertise you share on a daily basis. The way you do business is what makes you stand out from the crowd. But have you ever stopped to think what exactly that ‘something extra’ is that you provide? What makes you different from other intermediaries?
The answer to that question is called a value proposition. We’ll talk you through the steps to unearth the characteristics that best describe how you help your customers manage their risks more effectively. This ‘you-in-a-nutshell’ will ultimately help you grow your business beyond merely providing the cheapest quote.
What is a value proposition?
As legendary Harvard Business School marketing professor Theodore Levitt put it: “People don’t want to buy a quarter-inch drill – they want a quarter-inch hole!” That means that people buy outcomes. They are interested in benefits – not first and foremost a list of what you provide or what the product you sell does.
A value proposition is a one-sentence description of why your ideal customer should use your product or service. It needs to be relevant to different market segments – e.g. small businesses or game-farming – so you might have slightly different value propositions for each one. You want your target market to think “that’s exactly what I’m looking for!” It needs to show them the value of working with you instead of any other intermediary or business.
The ideal value proposition
- communicates specific results the customer will get,
- explains how it’s different and better, and
- should be clear, simple and easy to understand. No jargon.
How to craft a value proposition
Discovery phase: Firstly, decide who your ideal customers would be and gather as much information as possible about them. Next, get first-hand feedback by emailing people and asking questions like: What do you enjoy about working with us? What do you love/hate about insurance? What can we do better? You can also spend some time on social media (Facebook and Twitter) or the likes of Hellopeter to study what people complain about regarding insurance, or what they compliment about it. You could even set up a quick survey with something like SurveyMonkey.
Describe what you provide: Write down the products you sell, but also list the services you provide. Think about your strengths: You are a trusted advisor (often about things beyond insurance), you manage risk, you know every industry inside out, and so on.
Define the problem you are solving: Brainstorm the wants, needs and fears of each target market. What challenge can you solve for them as an intermediary? A small business owner fears going out of business when disaster strikes. A husband who travels often wants to know that his family is taken care of in any emergency.
Why should people want to work with you? Is it your 20+ years of experience that means you know the industry inside out? Is it the fact that you’re a small business owner yourself – so you know what they go through?
How to put it into words
There are many methods out there to express a value proposition, but one of the simplest is the XYZ method:
For: short description of who the customer is
Who: short description of the problem
Our: short description of the solution
A sample value proposition would therefore be:
For: large businesses
Who: can’t afford to suffer losses or have a production standstill
Our: tailor-made insurance products and in-depth expertise give them complete peace of mind so that they can focus on growing their enterprises.
In other words: We keep businesses in business.
What to do with your value proposition
Finding your uniqueness is not just a fun marketing exercise. It will streamline your business strategy. No business can compete and be equally successful in all areas but once you’ve highlighted your strengths, you might find that you should focus more on small businesses/farmers/corporates.
Secondly, relook your marketing messaging. Everything from your website and LinkedIn presence to your brochures and email signatures should be an extension of your value proposition. You can’t say everything in that one sentence, but you can expand on it on your email newsletters, web pages, social media posts, etc. Create a few proof points – 3-4 bullets that quantify the value you provide such as the big name clients that trust you, the qualifications you have, the risk products you specialise in, and that you deal with all clients personally. Write supporting stories that substantiate how your business adds value. How your business was started, why you do what you do, how you came to appreciate your products or services, or how you go about selecting them. Share testimonials of satisfied clients that confirm your unique selling points.
Finally, a value proposition also helps to sell your company to new staff (and motivate existing employees): It’s important that your staff buy into what you do and what you stand for. Use your value proposition as part of your induction or training.