MarketingSherpa Blog

Confession time…one of my favorite movies is the Will Ferrell classic, Elf. I love the scene where Buddy (the elf) sees a sign outside of a coffee shop announcing that it has “The World’s Best Cup of Coffee.”

It’s quite a value proposition and thanks to Buddy’s innocence (or ignorance) he barges into the shop and congratulates the entire staff for a job well done. The reason it’s so funny is because we know better. Even the staff at the coffee shop knows better.  To believe such a claim is ridiculous.

Yet many companies still have trouble avoiding such preposterous value propositions in their marketing.

According to a recent incentivized survey done by MarketingExperiments (MarketingSherpa’s sister company), 120 out of the 275 (30%) total business plans we reviewed had no real value proposition. Another 60% were categorized as having only limited or substantial value. Only 10% were considered to have a strong, unique value proposition.

In all, on our scale of zero to five, 90% of those surveyed were at or under a two.

It’s an unnerving statistic given that a well-stated value proposition has (according to our research) been proven to get better response rates on everything from business plans to landing pages.

So how do we craft a value prop that isn’t going to induce a side-splitting laugh in your audience?

Well, I have yet another confession to make…

I’m probably not the right person to ask. I honestly don’t have a lot of background with value proposition. But I DID recently attend a workshop on Landing Page Optimization with the Managing Director (CEO) of MECLABS, Dr. Flint McGlaughlin.

In it, he devoted a whole section to getting your value proposition straight. So I’m going to share what I learned there and share a little of my own commentary as well.

A true value prop isn’t dictated in a board room

According to Flint, the basic key to determining a strong value proposition for your company is understanding that a value prop is not usually determined, it is discovered.

It’s a simple shift in thinking that makes a huge difference. Sitting at your desk and trying to manufacture a shiny new value proposition that you think will sound good is usually pretty fruitless.

Prepare yourself for some hard thinking and investigation into the bowels of your company, as we explore four steps to discovering your value proposition…

1. Answer the question: If I am your ideal customer, why buy from you rather than your competitors?
Assuming it was true, “The World’s Best Cup of Coffee” could be an excellent value proposition. The ideal customer in this case is your typical Manhattan coffee drinker and the reason they should buy coffee there is obvious – it’s the best in the world.

The problem is, it’s not true. The modern consumer simply does not believe your overindulgent hype. So the ideal customer is put off and ends up without a reason to buy coffee there instead of the better-looking shop across the street.

Admittedly, this is an extreme example. Yet marketers make this mistake every day. You likely come across this marketing jargon-filled hype every day. Does a two-person B2B tech start-up really offer a scalable solution for Fortune 500 companies, for example? Just because you say it in your marketing material doesn’t make it true. And your savvy audience is well aware of this fact.

When you’re answering this question for your own value prop, it’s important to note here that you are putting yourself into your customer’s mind by answering as if you were them. So spit out the Kool-Aid and be a little skeptical.

2. Compare your answer with the claims of your main competitors.

Of course we all know that just about anywhere you go, there’s a coffee shop claiming to have the world’s best cup of coffee. Again, that’s part of the comedy of this scene.

If any of your competitors can say the same thing about their products or business as you without completely lying, you don’t have a strong value proposition.

While your mother probably told you how special you were, a unique snowflake unlike all the other kindergarteners in the world, the same can’t automatically be said about your product offering and company. Is it really unique? Or do people only buy from you on a lark or because they haven’t stumbled across your competitors yet?

3. Refine your value proposition until you can articulate it in a single, instantly credible sentence.

The problem with the coffee shop’s value proposition was that it wasn’t instantly credible. No one believes their coffee is the best coffee in the world because there’s no way to prove that.

Your value proposition must be instantly believable. A great way to do this is to add numbers to your value proposition. If that coffee shop had said something along the lines of, “9 out of 10 people preferred our coffee to Starbucks”…you’d be more likely to believe it.

Another strategy is to be as specific as possible. Let’s say you’re not quite there yet with the imaginary value proposition above. What if it said, “9 out of 10 people preferred our coffee to Starbucks in a double-blind taste test?”

The double-blind taste test adds a dimension of specificity that increases the credibility of the sentence.

4. In the end, you must test your value proposition.

No matter what you do to come up with a value proposition, there’s no way to guess what resonates the best with your audience. You need to test it.

Your value prop should be visible in every step of your sales process. Wherever you display it, test different phrasing, angles, and ideas to get deeper inside the mind of your customers.

The better you know what they find valuable, the better you can serve them.

The next stop of the MarketingExperiments Landing Page Optimization Workshop tour is on June 1 in Atlanta. It will also be taught by Dr. Flint McGlaughlin. Then our MECLABS team will take the workshop on the road to New York, San Francisco…and more cities to be announced.

Related Resources

B2B Marketing: On Occam’s razor and value propositions

Optimizing Landing Pages: 3 Keys to Increasing Conversion Rates

Powerful Value Propositions

Value Proposition: Our research team answers your questions

Landing pages get a lot of love. Here at MarketingSherpa and MarketingExperiments we often write about landing page optimization, and offer case studies on how marketers are testing and improving landing page performance. And landing pages deserve all that attention because often those pages are the direct connection between a marketing campaign and a closed deal. We think so highly of landing pages at MarketingSherpa we just released a publication dedicated to LPs — the 2011 Landing Page Optimization Benchmark Report.

The homepage is a channel, not a destination

But because landing pages command so much real and virtual ink, the homepage can seem neglected. The first thing to consider is the homepage is unique to a website. For companies that only offer one product or service, the homepage may be no different than a landing page.

But companies with many products, services, divisions, etc., must look at homepages as a drastically different animal than a landing page. Unlike the landing page where you want to get website visitors to the LP, the homepage is channel where your goal is to get the visitor through the page.

The homepage is possibly the toughest page on a website to test because it “serves many masters” and typically has multiple objectives to achieve.

The usual elements in a homepage to test do overlap with landing pages:

• Eye path direction
• Strength of value proposition
• Color combination
• Image relevance

And testing a homepage involves five basic steps:

You may notice one word features prominently in each step — objectives. Homepage objectives should be broken into three categories:

1. Primary — these are long-term and should have high revenue potential
2. Major — short-term and are typically tied to a marketing campaign or other internal need
3. Minor — functionally necessary elements to the page such as navigation or legal copy

Taking a closer look at homepages, how they differ from landing pages and how tricky they are to actually test and optimize, caused one chart from the Landing Page Optimization Benchmark Report to really stand out.

Boris Grinkot, Associate Director of Product Development, MECLABS, is the author the Landing Page Optimization Benchmark Report and he took a few moments to share his thoughts on homepage optimization and metrics.

Before we get into the questions, here’s a quote from the report (I highlighted the final sentence):

A critical issue becomes the quality of the traffic that the homepage sends into the website. The quality of the traffic is broadly the degree of match between the visitor and the offer – in other words, the predisposition to convert. Reducing bounce rate may be a short-sighted key metric if more visitors get through, yet those are not the visitors that would ever be interested in becoming customers. Dedicating significant page real estate to a $10 gift card offer can explode the clickthrough rate (and conversely, minimize bounces), but it may turn away visitors exploring a multimillion dollar RFP.

In your LPO Benchmark Report, you mention the homepage is possibly the most difficult page for designing a test …

Boris Grinkot: Measurement on the homepage is complicated because so many things typically happen between it and the conversion step. The general point is that when looking at the funnel holistically, a test on the homepage can affect different metrics differently, and sometimes you can get contradictory results — bounce rate reduced = good, conversion rate reduced = bad.

The homepage as any entrance page acts as a filter, and changing it does not only linearly affect clickthroughs to the rest of the funnel, but can affect the quality of visitors that click through — in other words, the segments.

So, what metrics are most important when testing a homepage?

BG: It’s important that marketers monitor several different metrics to get a complete picture of what’s going on. Bounce rate or clickthrough rate measures what happens immediately on the homepage, or wherever it’s measured, but misses how this page affects the rest of the funnel. Overall conversion rate (CR) measures performance of the site as a whole, but ignores where the leaks might be.

More intricate measurement — such as using “active segments” or “goals” — can tell you what happens with visitors who viewed a particular page, meaning that a virtual segment is created based on what the visitor experienced. Segment-specific CR can be much more meaningful because it takes specific page(s) into account.

Boris Grinkot will be providing insights from his Landing Page Optimization Benchmark Report and moderating a panel on “Overcoming institutional barriers to optimization implementation” at the first MarketingSherpa Optimization Summit coming up June 1-3 in Atlanta.

Related Resources

Homepages Optimized web clinic

Homepage Optimization: How sharing ideas can lead to more diverse radical redesigns

Homepage Optimization: How a more logical eye-path led to 59% increase in conversions

Homepage Optimization: Radical redesign ideas for multivariable testing

B2C Testing: A discount airline looks to increase conversion

(Members library) — Office Depot Site Overhaul Lifts Conversions 10%: 7 Tactics to Target High-Impact Improvements

I recently ran across a somewhat informal, but interesting none-the-less, study on the power of “free” to drive a conversion. Behavioral economist, Dan Ariely, heard that a New York nightclub was promoting an event featuring “free tattoos,” so he sent a research assistant to see if this incentive led to a conversion in the form of a tattoo.

The power of “free”

The resulting research isn’t scientifically or statistically rigorous, but it does offer a little insight into the command that the simple incentive of “free” adds to an offer.

• The average age of “participants,” that is club-goers at that establishment on that night, was 26
• Of the people in line to get a free tattoo, 68 percent said they would not be getting the tattoo if it wasn’t free
• 90 percent of those in line were aware of the free tattoo promotion
• Only 15 percent made the decision to get a tattoo after arriving at the nightclub
• 85 percent arrived that night planning on getting the free ink

The results of this informal test:

The results indicate that the power of “free” is surprisingly influential.  When we face a decision about a tattoo, one would hope that the long term permanency of the decision, coupled with the risks of getting different types of infections would cause people to pay little attention to price, and certainly not to be swayed one way or another by the power of free.  But sadly, the reality (at list in the nightclub scene in New York) suggests that the power of free can get us to make many foolish decisions.

(From danariely.com)

The big incentivized picture

Okay, not scientific. And plenty of test subjects were likely fairly impaired by chemicals in the decision process, but the raw numbers show that 68 percent of the people made their conversion decision (getting a tattoo) based on the incentive alone.

Where does that fit in the larger world of marketing? In the Landing Page Optimization training course found at our sister company, MarketingExperiments, incentive is defined as an appealing element you introduce to stimulate a desired action. That action might be a clickthrough, or to fill out an online form, or even an actual sale.

And the incentive has a key objective – to “tip the balance” of emotional forces from negative friction elements to positive to achieve conversion.

Here’s a chart from the MarketingExperiments Landing Page Optimization course illustrating that concept:

Here’s the thing with incentives, even if they are free – some are better than others. Depending on the goal of the offer, the incentive might be a free webinar, or a free computer mouse, or $100 off of a training session. The possibilities are practically limitless, so the key is to test incentives. All too often companies will try one incentive offer then quit. For any offer, an “ideal incentive” probably exists – you just need to keep testing until you find it.

Related Resources

Become a Certified Professional in Landing Page Optimization

Dances with Science: Are you better off not A/B testing?

Landing Page Optimization: Clean air or a free backpack? (Which is the bigger incentive for Sierra Club members?)

Internet Marketing: Landing page optimization for beginners