When was the last time you took a hard look at your value propositions? Does the way that you communicate the value you bring to customers, regardless of whether it is a statement on your website, a new product such as an app or a new service like free shipping, resonate with new and existing customers?
In the business of digital transformation, it’s easy to miss the experience that your customers receive on the other end of an initiative. However, it might be the fuel your customer experience program needs to drive long-lasting returns with minimal effort and complexity.
Experimenting with value propositions opens a new world of opportunity to learn about why your customers purchase your product, sign up, subscribe and act. What’s great about experimenting with value propositions is that you can determine causality between what works and what doesn’t.
At The Lumery, we’ve seen many diverse ways in which companies experiment with value propositions. One striking example was a test we did for a subscription business that displayed access to partner product offerings. Interestingly, the test bombed; it turned out that their customers didn’t care about their partner products at all. So, what did we do? We helped our client communicate this insight to the marketing and product teams. We then had a starting point to figure out which value propositions didn’t work, so we could focus energy on the ones that did work.
This short guide will take you through a process to effectively stand up a stream of testing that is geared to continuously refine your value propositions.
Step 1 — Get real about what drives value.
Before running an experiment on anything, the best practice is to step back and think about what role a value proposition plays in your product or brand context. At its core, a value proposition is fundamentally the way in which you convey a reason for taking action to get a product. It’s the business-critical messages that reach the customer and are interpreted into an action, such as subscribing, learning more or telling a friend. “Made in Australia” is a value proposition, a loyalty program is another, an app that allows customers to access content on their mobile can too be a value proposition.
Understanding that at the centre of it all, companies develop products and services to meet human needs, so the arbiter of what’s worthwhile sits squarely with the customer and how they feel about it. A launching point for testing is understanding your business context and the value propositions that are currently in your market.
Step 2 — Listen to the customer’s voice.
Now you have addressed how your customers perceive your brand value, it’s time to pull together preliminary ideas for your value propositions. Here are three broad categories to think about:
Promise — How customers perceive your brand.
- Why does your company exist?
- What makes your brand experience different from competitors?
- If this company did not exist tomorrow what would your customers miss?
- What do customers say they enjoy and dislike about dealing with your company?
Product or service — How customers perceive your offering.
- What unique benefits make it stand out in the market?
- How is the product used? What do people do with it?
- Are there incidentals that enable customers to use it? (e.g., great customer service, excellent digital experience, self-service, automated billing)
- Is your price point clear and comparable to other products or services?
Experience — What customers get out of interacting with your brand.
- What do customers feel when they order, wait for, receive, use or dispose of your product?
- What do they tell their friends when they talk about your brand?
- What are things that customers do not care about when interacting with or using your product?
Step 3 — Do your data analysis homework.
Once you have a general direction and a solid understanding of your business context, it’s time to start understanding what data you need from your customers. A great place to start is by reviewing your quantitative data. Quantitative data sets, such as digital analytics or CRM data, help you prescribe the proportional aspects of your questions and show you where to dig deeper.
Conversely, qualitative data helps you describe the experience, whether that be survey data, click heatmaps, session recordings, polls or interviews. It’s a deeper experience layer to help you explore the stories your customers are telling about your brand. This will help you start crafting the value messaging you want to tell them.
The aim of this research is to refine what your value propositions should be and deprioritize the messages that are not validated through your research.
Step 4 — Test and learn.
Now you should have a solid business context, customer research, and the first draft of your brand and experience value propositions confirmed by your research. We have almost all the necessary elements to start testing!
The last step is to map your value propositions to your customers’ experience. I like to think of it through the lens of customer, channel and context. You know your customer’s journey best, but a few guiding principles can be helpful when coming closer to building your hypothesis and defining the treatment.
Who’s your customer?
Defining your target audience across demographic, geolocation, interest categories or eRFM profiles is a great start. You can then start building out an understanding of the customer segments that are driving traffic to your site or app. Your value proposition may not change at all; for example, “no lock-in contract” can be applied to any segment or audience group, but the way you position and execute the creative may change slightly.
What’s your context?
Is your value proposition best served on the landing page, throughout the quote, check out phase, or in a triggered email? Mapping where value propositions can capitalize on an inflection point (like a funnel drop-off step) can help craft the message and the placement of your value propositions. Taking the “no lock in contract” example again; you may decide this value proposition is better placed right before a customer purchases, as this is where customers hesitate the most. Or you might find that your competitors don’t offer anything like a “no lock in contract”, so you may use it for awareness campaigns to differentiate against the competition.
What’s your channel?
Customers react to messages differently across various channels. Filtering your value propositions based on how recognisable and easy to understand they are is a good start. “No lock-in contract” is easily recognisable for telco brands, so placing it further up a subscription funnel, where customers are focusing less, may be a better solution. When launching your tests, think about ensuring that the proposition is the test itself; this means no other changes to the UI, design or any other variables in the test. The goal of testing value propositions is to find the outcome that the messaging had on the customer in the context of their current experience.
Step 5 — Teach others and spread the word.
Testing is one of the most effective ways to draw out causality from your value proposition to determine what is appealing to customers throughout their experience with your brand. When analysing tests, you want to get to the heart of how your customers reacted.
Aside from analysing the win / loss rate, a great way to survey the effectiveness of your value proposition is by analysing behavioural metrics such as dwell time, exit rate and navigational reactions.
Going back to our learnings about partner products at the beginning of this article, it would be interesting to understand if customers navigated to partner pages when exposed to a test. This type of research allows us to understand that, although the test did fail, customers are clearly interested in learning more. By asking behavioural questions about your test results, you can explore opportunities for iteration and focus on what your customers want to know about your brand or product.
Socialising results and learnings are crucial to unlocking opportunities in the wider business. Shining a light on these insights can be fuel for your content and marketing teams, as optimisation results can take the guesswork out of your value propositions.
The final word — get experimenting.
Hopefully, this short guide helps you on your experimentation journey or at least sparks a conversation about testing your value propositions. The aim is to add fuel to the fire of your existing experimentation program.
Lastly, don’t hesitate to reach out if you have any questions along your journey. Learn more about The Lumery at www.thelumery.com
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