In today’s episode, I’m going to give you three really amazing strategies for increasing your value proposition.
Value proposition is something I get very passionate about. It’s such a critical concept and foundation to get right in your business, so today, we’re going to increase yours.
Let’s dive on in!
What is value proposition?
Your value proposition is the perceived value of the transformation you facilitate through the eyes of the potential buyer of that transformation.
In layman’s terms: What is the value to me of the gap between before working with you, and after working with you?
You have people who come in that have a certain skill level, outcome, result, experience and feeling. And then after working with you, they’ve gone through this beautiful journey, and now they’ve achieved this level of outcome/goal/feeling.
Your value proposition is: How valuable is that transformation to me as a potential buyer of it?
It’s really important that we’re clear here that it’s through the eyes of the potential buyer.
This is where a lot of people get stuck because they add things to their courses or their products and services that THEY think is going to be valuable. Or they just add extra things because they think that that will make it more valuable.
But it’s important for us to understand that your potential buyers will perceive value based on their priorities, what’s important to them, and what’s valuable to them.
Your job is to really understand what is valuable to them, and then dial up that value proposition.
This is the reason why you’ll see such contrasting answers when someone asks in a Facebook group how much the members of that group would pay for their workshop on how to simplify Facebook ads and get leads for under $3.
It’s because those people see the value proposition of that transformation very differently.
If I’m not doing Facebook ads right now and I’ve never done Facebook ads before, that workshop is completely useless to me.
If that is the exact problem I’m facing right now, that value proposition is quite high for me.
What we want to do when we’re looking at increasing the value proposition of your products and services is deeply understand what the transformation is.
You need to know what that transformation is so that you can increase the value proposition of it for your niche.
In this episode, I’m going to explain how you increase the value proposition of your products and services…
But first and foremost, I want to talk about what I do NOT recommend you do:
1. Two-point pricing
Two-point pricing is where you say it’s valued at $3,000, but you’re selling it for $37.
In some countries, two-point pricing is illegal.
I see it quite consistently online. Not as much in the circles that I’m in, but definitely out there in the wider online business world.
Someone will put on their sales page that they’re selling something for $795 that includes:
- Access to a Facebook community – valued at $1,000
- Twelve step-by-step video modules – valued at $2,400
- Five live calls – valued at $5,000
They’ll add it all up and say its regular value is $8,700, but the investment is just $795 right now.
You see that quite a lot.
Under Australian Consumer Law (I’m not a lawyer, this is not legal advice – this is my understanding of Australian Consumer Law), in order to say something is valued at a certain amount, you need to have had it available for a reasonable amount of time and made a reasonable amount of sales at that price.
If you have never offered access to your Facebook community for $1,000 before and you’ve never sold it at $1,000 before, you cannot say it’s valued at $1,000 under Australian Consumer Law.
It’s different in different parts of the world, and again, I’m not a legal adviser. But two things to note is that:
1. It’s gross
2. It could actually be in contravention of consumer law
You need to be mindful of that.
I don’t like that strategy. What you’re doing is you’re trying to increase the perceived value of something simply by telling people what its value is.
That number is completely plucked out of obscurity.
People are getting smarter these days. We learn to recognise two-point pricing. We learn to recognise those sales tactics and strategies anyway.
As far as I’m concerned, when I see something that’s offered at a 97% discount, I DON’T think about how it’s really valuable. Instead, I wonder why on earth it’s being offered at a 97% discount, and what must be wrong with the product/business.
I definitely do NOT recommend using two-point pricing to increase your value proposition.
2. Add more stuff
I also don’t recommend that you add more stuff to your things in order to increase the value proposition.
In most cases, more bonuses just look like more work.
Think about if you’re buying a program that’s going to get you from A to B. That program has six step-by-step modules and six live calls. There’s also a Facebook community where you can engage. But wait, there’s more!! You also get a bonus masterclass with another person, a bonus talk on a topic, and a bonus expert session with this person.
You’ve now just told me that in order to get the transformation and go from A to B, I don’t just need to do six modules and come to six calls, I also need to do these several extra things that you’ve thrown in in order to actually get the outcome.
In most cases, when it comes to adding more and more – adding bonuses as incentives to get people to join sooner and adding bonuses as a way to increase the value proposition – you need to be mindful: Are you telling people that it’s more work? Or is it actually more value?
In most cases, bonuses just create a sense of more work.
When it comes to increasing value proposition, one of my top three strategies is NOT to add more to it. It’s not to add bonuses and it’s not to make it more work for people, because for most people that’s not value.
Then the final thing I say not to jump into in order to increase the value proposition is…
3. Fake discounts
Very similar to two-point pricing, but a fake discount would be pretending that it was previously $3,000.
This is taught in some sales strategies as was, then, now. They use it as a double discount.
A double discount makes people think it’s doubly valuable compared to a single discount.
You might even notice this in your own behaviours and lifestyle.
This jumper that I’m wearing came from an outlet store. On the pricing, it had the full price, and then it had the discounted price. But because it was at an outlet store, there was an extra 30% off the discounted price.
That is actually that model of pricing. Was, then, now. There have been two discounts.
That strategy works to offload out of season clothing… BUT your product or service is not out of season clothing.
Value proposition – your transformation that you are facilitating – is not something that’s out of season. It’s not walking out the door.
It’s not a strategy I recommend for service-based businesses.
Those pricing strategies may work to get in the cheap and easy sales, but does it actually do its job in terms of your business overall and your strategy? I don’t think it does.
Fake discounts – was, there, now – I actually don’t think that they increase the value proposition when it comes to online businesses like ours.
They’re the things that I DON’T recommend in order to increase your value proposition… What DO I recommend in order to increase your value proposition?
1. Audience’s existing priorities
Understand your audiences existing priorities and attach your transformation to those priorities.
You cannot change people’s priorities.
If your ideal client puts their health and wellbeing at the bottom of the list, and you would love for them to buy your product but it needs them to prioritise their health and wellbeing, you could spend years trying to convince people to put their health and wellbeing at the top of the priority list.
Instead of trying to change people’s priorities, attach the work you do to their existing ones.
There will be a range of answers when I ask the question: What is it that they’re sacrificing their health and wellbeing for? What’s at the top of the list?
At the top of their list, some people will put their:
- Financial future
Your clue as to what they put at the top of the list is based on what they already buy. What do they prioritise in terms of what they do? How do they allocate their time?
If you want your audience to prioritise their health and wellbeing and invest in your program, but you can see that they will prioritise their business first and foremost every single time, then that is their number one priority. If you can link the work you do with them to that number one priority, then you’re going to increase the value proposition because it’s going to be aligned with their priorities.
There are lots of different ways that you can do this through:
- Your messaging
- The way that you launch your product and service
- The way that you build your product and service
First and foremost, you just want to pay attention to what it is that people prioritise.
A lot of people come to me and they want to know: How can I get my free content to get people to change their priorities? How do I get people to put this at the top of their list? How do I get people to change the way that they think about this work?
And yes, you can absolutely help people on that journey with your free content. That’s something that I cover in my messaging ecosystem. When you’re warming up your audience, help them to achieve that lightbulb moment of realising that what they actually need to focus on is X.
You can absolutely do that with some of your free content.
But a much more powerful thing that you can do first and foremost is to ensure that it’s aligned.
If people are going to consistently prioritise their business over their health and wellbeing, help them see the linkages between their health and well being, and the results in their business.
It seems really simple and straightforward.
It’s not just a matter of telling people that being healthier will make them better at business, because you can ram that down people’s throats till the cows come home, but they won’t necessarily believe it or agree with you immediately.
There are ways that you can attach the work that you are doing – the transformation you are facilitating – with what people’s existing priorities are.
That’s number one – attach it to their existing priorities. Don’t try and get people to change their priorities. You will be able to increase the value proposition of your product and service simply by attaching it to people’s priorities.
2. Better, faster or easier results
Help people to see how your product or service gets them better results, faster results or easier results (or a combination of the three!).
There is a caveat on this one: it needs to be believable.
If you say to people that you can take them from zero to six figures in six weeks with your magic formula, and there’s no insight into how your formula is different, or what specifically makes your formula so amazing, then people aren’t going to believe it. They’ll think it’s just a big empty promise.
You need to help people to believe that you can get them a better result, a faster result or an easier result. There are different ways for you to be able to create that believability.
One of the most powerful ways to do that is to explain to people why your particular process gets them there faster, gets them there easier or in a better way, or gets them a better result.
That can really help people to feel that confidence.
This is why (and you’ll see this marketing strategy and tactic everywhere now – especially if you’re watching advertorials in the weight loss space) they will explain to you why what you’ve done previously hasn’t worked before they’ll explain to you why their thing will work.
If you have a look at it, all of the ab things will talk about why the previous gizmo or gadget that was supposed to get you abs didn’t work for you, and why this one will.
That’s something that you can do in your messaging as well.
As part of explaining why you can get people there faster, easier or better, talk about what their previous experience has been, and why that may have not worked for them.
I’ll give you an example through the lens of my Take Off program.
A lot of programs that are built for people in startup are low-cost programs. This is because a lot of people selling in that space believe that people who are in startup don’t have a lot of money.
In order for a low-cost program to make sense, they will have very little mentoring involved in that program.
A lot of the startup programs that are out there are under $1,000, but they’re self-study.
My belief is that when you’re in startup, your number one need is not self-study… It’s actually mentoring.
You need someone to mentor you through the startup process because you are unique, your niche is unique, you don’t know what you don’t know, and there’s a lot of areas in your business where you’re going to need guidance to make decisions that work for you and that work for your audience. There are things about your market that you don’t know.
You need a mentor to help you through that process.
The Take Off program is more likely for people to get success as a startup, because it includes the mentoring.
I talk to that when I’m launching the Take Off program.
A lot of people who join the Take Off program have a bunch of startup programs that they’ve purchased before that didn’t get them the result.
Take Off is a very comprehensive startup program. It is not creating a carbon copy of my business, because you’re not the same as me. And it is not a self-study program, it is a step-by-step handheld group mentoring program because in startup, you need mentoring.
You can see how in that messaging, I’m increasing the value proposition of the Take Off program because I’m explaining to people how I can get them a better result, I can get them results faster, or I can get them results easier because of that mentoring – the differentiation from what else might be out there, or what they’ve tried before, versus what they’re going to do with me.
That difference is a believable difference because I’m talking about how I differentiate through the mentoring.
That’s the second way to improve the value proposition – be really clear on how you get people a better result, a faster result or an easier result, or a combination of the three. But it needs to be believable. I need to understand and believe that that is possible for me.
3. Niche more specifically
Your niche is who you are focused on when you are marketing your products and services.
By being very specific in your niche, you can then be very specific about how you link to existing priorities, and how you can get people the result better, faster or easier, in a very believable way because it’s niched when you’re speaking to that experience.
When you make your product or service specific to addressing my lived experiences, my specific struggles and my specific goals, then its value proposition is higher because I understand that you are an expert. You’re a specialist and I believe that you are going to be able to get me the outcome.
An example of where niching creates an improved value proposition would be if you’re a massage therapist. You could be a generic message therapist – all types of massage for all types of problems, aches, pains, sports injuries and relaxation. Or you could be a massage therapist who’s niched.
Let’s say you niche into sports injury.
I want you to think about someone who has a sports injury. There are two massage studios side by side: one says that they do all types of massages, and the other says that it’s a sports injury specialist. Which of those massage studios would you be most likely to walk into? Which of those massages would you be more likely to pay more for?
If you were someone who had experienced a sports injury and you saw that the massage studio with the sports injury charged $150 a massage, but the generic one was $100 for a massage, would the price point make a significant difference to your decision making?
If you’ve got your next game in a week’s time, are you willing to pay more knowing that you’re going to a specialist?
This is where niching is really powerful.
Not only does it increase your ability to create reach and traction online, but it also creates an opportunity for an increased value proposition.
The more specifically niched your products and services are, the higher the value proposition for your audience and your potential buyers. Therefore, the less resistance you have to people purchasing, the higher you can price, the easier your marketing becomes, and the more organic reach that you get on social media.
Niching is a really powerful part of that value proposition.
You may be reading along to this episode and thinking that you really need to nail that niche and get more specific and tangible with your niche. Perhaps you haven’t ever heard anyone teach you niching through the lens of your niche being who not what. Lots of people are taught that their niche is what they do (ie. feng shui). But that’s actually not a niche.
If you haven’t done niche training before where it’s specifically focused on who – who is it that you’re niching down to working with – then I’d love for you to come and check out my free Nail Your Niche training.
It is comprehensive and you’ll have a lot more clarity about how to improve your value proposition as well when you get that niching part right.
Niche is step one to value proposition.
If that’s something that you’re interested in, make sure you grab that FREE training here: CLICK ME
As always, please come on over to the Heart-Centred Soul-Driven Entrepreneurs Facebook group and share any lightbulb moments or questions you have as a result of this podcast episode. Just use #podcastaha and the episode number (288).
Until next time, I cannot WAIT to see you SHINE.