5 - Optimize Your Value Proposition
Your value proposition is central to your success as a business: it is the reason that customers do business with you - and the only reason they choose to do so. You offer them something that is more valuable to them than what they have to do in order to obtain that value. Specifically, it's "what they have to do" and not "what they give you" because the price is not their only consideration.
A customer who buys vacuum cleaner has to drive to a store and then drive home, take the item out of the box, dispose of the packaging, install a bag, plug it into the wall, turn it on, push it around, empty the dust cup, change the filter, and a myriad of other things in order to get the benefit of buying the vacuum. Some of these costs can be mitigated (buying online and getting free delivery), vendors may be willing to mitigate other costs (first year's supply of bags and filters free), but no vendor is willing to cover all the costs to the customer.
Likewise, the value your firm offers them in return is not limited to ownership of the product, but includes all of the functional and nonfunctional benefits they will derive from its ownership and use, for the duration of its lifespan.
You advertising, as well as every aspect of your interaction with a prospect, provides them with information that has the potential to influence their decision to buy from you or not to do so, and provides a customer with information that can motivate them to keep or stop giving you their business.
The Value-Proposition Equation
On the macro-level, if all the perceived benefits of your product or service outweigh the perceived costs, a prospect will be motivated to buy. On the micro-level, if the perceived benefits of taking a specific action (such as clicking a link) outweigh he perceived costs of taking it, he will be motivated to take the action.
Maximizing the appeal of any call to action therefore requires influencing the perception of the customer - to make the benefits to them seem high and the cost to them seem minimal by comparison.
Perception Filters
The author takes a lazy swipe at the subject of perception - in that it is an individual phenomenon and that different users will interpret the information you provide them in ways that will be inconsistent with your intent. He then babbles a bit and admits in the end that he has no practical advice to offer, just "keep the filters in mind."
Salvage
(EN: It gets much worse as the chapter progresses - and I have the sense that the author may not be authoritative on anything outside of optimization testing. He attempts to explain various concepts related to marketing and psychology in a way that makes it clear that he doesn't understand either subject particularly well. I expect that going forward I will skim the chapter and others, skipping anything that does not relate to his area of expertise.)
- Your product has a number of benefits and features. Test to determine which are most appealing to your customers
- Test to determine what the right number or combination of features is
- Test the wording with which features are described
- Test the appeal of incentives and offers (EN: In particular, test this over a longer period of time to ensure you are attracting people who will become regular customers rather than discount seekers who will be one-time customers, or who will need a price incentive to buy again)
- Do not overlook the emotional impact - people do not buy for purely logical reasons or a sterile evaluation of functional benefits. There is even a theory that suggests people make a purchase emotionally and defend the purchase rationally (EN: which is an exaggeration - but does hold that emotion drives whether or not they will give attention at all and will prime them to interpret information in a positive or negative way.)
- Emotional impact is still a factor in B2B selling. Businesses allegedly use a significant amount of process to weed out subjective assessment and make a rational choice, but it's been shown that there is still a great deal of emotional portent in selling to business, and fear is a significant factor because the person who authorizes the purchase puts their reputation and possibly their job at stake - and much of the business purchasing process is merely whitewash over an essentially superficial decision made by an executive.
- Credibility precedes content. If people do not trust in your brand, it doesn't matter what you have to say.
- Poor design and badly written copy generally detract from your credibility, but this does not mean that the quality of copy and design, above a level of basic competence, instill any additional credibility.
- Interesting perspective: when a site demands contact information to get information, it always gets a lot of garbage input. The author speculates that a company will higher credibility will get less of this.
- There are various sources and devices that allegedly lend credibility, and it's worth testing to see which of them have positive influence.
- Thus far, the price of the item has been downplayed because other factors are typically ignored - but it does remain significant. It's not only whether the benefits are worth the price, but their reaction to the price itself (the psychological and cultural prejudices and preferences for certain numbers)
- A common cause of dropout in the online channel is shipping costs, which are often disclosed at the very end of the process. There are various methods to disclose the shipping costs sooner, or even hide them by rolling shipping into the item price. Test to see what works best for your business.
- Assumptions about competition should be tested - both in terms of the points of parity you seek to establish by imitating competitors as well as the points of difference you seek to establish by being different to them. Testing can help make these decisions with greater precision.
- "Don't underestimate the power of a few words" - just changing a phrase can result in a double-digit increase in conversion.