Most of us are too polite to say it, but it’s the question we’re weighing up when we’re made an offer or making a decision—‘what’s in it for me?’
Too often brands make this decision harder than it should be for consumers by failing to understand or clearly articulate their value proposition.
What is value?
It’s a pretty basic equation:
Value = What I get — What I give
Test… Put simply, the greater the difference between What I get and What I give, the greater the value.
Following this logic, given a choice, the option with the greatest value is the right choice. Simple huh?
This basic equation makes sense for commodities—ie comparing apples vs apples. All things being equal, I’ll take the cheapest option every time. I’m sure you do too.
But things are rarely equal, and decision making isn’t always logical. There are emotional and rational factors at play, and personal values and experiences influence decision making.
What are they? Glad you asked. Gather round and indulge me in a nostalgic anecdote…
Tomato / Tomato: A value based decision
As kids growing up in Shepparton, country Victoria, every summer our Mum and many other mothers in the region would work the night shift at the ‘cannery’ otherwise known as the Shepparton Preserving Company (SPC).
For over 100 years, the SPC had been a vital part of the town and region’s economy, and represented an opportunity for families to financially catch up or get ahead.
Some of the things I remember most of this time is going to our Nan’s house after school and the taste of the frozen cheese sandwiches she made for us; the little box mum kept her earplugs and hairnet in for working on the line, and the funky smell of the cannery on a hot summer day.
Fast forward to today and I find myself in my local supermarket standing in front of the canned tomatoes. In one hand I’m holding a can of generic supermarket brand tomatoes, and in the other a can of SPC tinned tomatoes.
There’s a value based decision to be made.
The generic brand tomatoes are all the way from Italy and cost 80c, while the SPC tomatoes are from only two hours north of the supermarket I’m standing in, but inexplicably cost twice as much. Putting aside the fact that this makes absolutely no sense, the choice is a simple one for me to make.
I choose the SPC tomatoes at twice the price.
How values influence value
Why would I pay twice as much for a can of tomatoes? What’s in it for me?
What I get from from buying the local option is much greater than the difference between what I give. Supporting the local industry that supports local families is matters to me. Equally, voting with my wallet against international imports with a high carbon footprint is more important to me than saving a few cents.
These are my own personal values influencing value decisions. But it’s not just me, every time we purchase we make value based decisions based on more factors than just cost.
These are the factors that we need to understand when we’re when we’re trying to influence decision making—when we’re trying to get someone’s attention, start a dialogue with them, tell them why what we’ve got is what they need.
Drivers of choice: Rational vs Emotional benefits
Every product has a mixture of rational and emotional benefits. These can be grouped into Works Good, Look Good and Feel Good factors:
This is a product’s functional benefit. Does it do the job I need it to do?
In the tomato example there’s no reason to believe that what is inside one can is better than the other—they’ll both do a good job of making a pasta sauce, so there is no point of differentiation here.
This is what the product says about me to others—how it makes me look, the message I want to send to the world about my status, my identity, my personality, and my cultural or ‘tribal’ affiliations (in the words of marketing guru Seth Godin “People like us do things like this”)
In the tomato example there’s not a significant reason for me to choose the more expensive tomato brand because they’re going to go straight from the shelf to the grocery bag to the pantry. It’s not going to make me look richer, cooler, smarter or more attractive by buying one over the other. In fact, no one is ever going to know about my choice unless I tell them about it, because why would I ever tell people about what canned tomatoes I buy? Oh wait…
This is how the product makes me feel emotionally. It might make me feel good about myself for personal, ethical or charitable reasons; for treating myself; for becoming a part of something that makes me feel a sense of belonging; or make me feel safe, secure reassured.
In the tomato example the Feel Good factor—the personal knowledge that I am supporting my community—outweighs all other factors including the financial cost difference.
Feel good for the win!
Now, you don’t need to grow up in sniffing distance of the SPC to know it’s story and that of the families and communities it supports—that story is now literally wrapped around the product, giving the consumer a greater reason to pay the extra financial cost of their product.
By articulating their value proposition and telling a relatable, memorable story, SPC has made it about more than a simple can of tomatoes. It’s the additional value it represents:
This is about more than a can of tomatoes.
This is about our past and our future.
If you care about Australian farmers;
If you value Australian families and communities,
support them and buy Australian tinned fruit and veg.
Did you ever think a can of tinned fruit could say so much?
Had they not told their story and articulated their value proposition, we’d all probably just be reaching for the ‘best value’ low cost option.
What matters to you? What do you value? What is in it for you?
When we make choices we’re weighing up which of these factors are most important to us, and represent the most value to us. The drivers of choice are constantly changing for the individual, depending on the product, sometimes cost will matter most, other times it will be status, other times it will be a moral or ethical choice. Often it will be a combination of all.
Think about why you wear the clothes you do, drive the car you drive, or give to the cause you support. How do they work for you? How do they make you look to others? How do they make you feel? What is really going on here?
The tale of the two tomato cans is a relatively simple one. The choice is tangible, immediate, and low cost. It’s a low risk decision.
But, our clients aren’t selling cans of tomatoes. Where it gets tricky is when value becomes less tangible, less immediate and higher cost. Higher risk.
For example, how do you judge and compare the value of education options who are often selling a dream for the future?
Or when you are launching something completely new and innovative to a market that needs what you’ve got but don’t know they need it?
The value of a value proposition.
If it’s time to launch, refresh or reposition a brand you need to be able to answer the question ‘what’s in it for me?’ for the people you’re asking to consider what you have to offer. To do this you need to know:
- Who are they?
- What do they care about?
- How do we make their lives easier or better?
- How do we satisfy their wants and needs?
- How or why are we different?
These insights form the essential elements of your value proposition, and your value proposition becomes the foundation of your brand and marketing strategy.
By having a laser-sharp value proposition you will be able to build more targeted marketing and communications strategies, and start having more meaningful conversations with your market, increasing your chance of success.