Your value proposition may feel like it’s on target, but if it doesn’t solve the most important customer problem, you face an uphill battle. You’ll have trouble attracting new buyers, and more importantly, you may miss out on building a break-out business.
In one particular mentoring session, I realized how critical it is to make sure your business is focused on solving the right customer problem.
I met with Gergő Bakonyi, co-founder of cake and confectionary delivery service startup Sweet City, based in Budapest. He asked for help in differentiating his service from online food delivery businesses like Wolt and Netpincér, both of which had benefited from a surge in home ordering during the pandemic.
Gergő said Sweet City was having trouble gaining traction with its three target customer segments:
- young, urban women,
- mothers with children, and
- ‘Super Dads’, i.e. fathers who ‘do anything’ to please their kids.
Your customer problem may not be what you think
In advance of our discussion, Gergő shared marketing materials that presented Sweet City as a service of convenience. His target customers didn’t have time to go to the patisserie shop personally to choose and buy a cake. They were looking for a way to order quickly and have their sweet of choice delivered to their home without fear of it being damaged or melting in route.
To deliver on this promise, Sweet City uses premium wooden boxes to keep the cakes safe. Their website even includes a snappy video that highlights the customer journey with these high-quality boxes serving as the ‘star of the show’, as the cake is first revealed to the buyer.
When I saw ‘premium wooden boxes,’ I sensed that something wasn’t quite right with the messages I saw in Sweet City’s marketing materials.
Were high-end wooden boxes really necessary for a service built purely around convenience?
The right customer problem is your bullseye!
But are you targeting the right customer problem? Gergő went on to explain that Sweet City only sourced cakes from the finest, boutique patisseries in Budapest. They offered a range of one-of-kind cakes and desserts with a selection of specialist ingredients – all selected with the approval from the pastry chef of one of Budapest’s finest hotels.
The product photos on their website did not disappoint. One cake looked more mouth-watering than the next.
It didn’t take long for me to realize why Sweet City wasn’t appealing to their target customer segments. And it had nothing to do with those online food delivery services that were taking a bigger share of the home-delivery market.
Sweet City was solving the wrong customer problem!
Reframe your customer problem
I referred to The Launch Code worksheet called “Five Steps to Creating a Powerful Value Proposition,” and put my assumption to the test. We began the process with question one: what is the customer problem your business solves?’ I asked.
Gergő immediately began highlighting what I had read in the marketing materials he sent me: the ease of online ordering, the convenience of having the cake delivered to your door.
I stopped him before he could go any further, and asked a follow-up question.
“Why does a young, urban woman have to use your service?” I asked.
“She wants to have something cool she can bring to a house party, so she stands out from the crowd,” Gergő responded after a few seconds.
“What does she do with cake when it arrives?” I inquired.
“She takes it to the party and probably posts a picture of it on Instagram,” Gergő considered.
We were getting closer to identifying the relevant problem Sweet City was truly solving for its customer. We just hadn’t arrived there quite yet.
“What about mothers with children or ‘Super Dads’?’ I continued. “Why do they really need to use Sweet City?”
“They want to buy something unusual for their child’s birthday, something that everyone will remember,” Gergő answered almost immediately.
Experience matters more than convenience
I nodded in agreement and waited a few seconds hoping Gergő would jump in with his own conclusion. I finally broke the silence.
“I don’t think you’re selling the convenience of home delivery at all,” I stated as I prepared to share the idea that was just waiting to be revealed.
“Sweet City sells customers the chance to create unforgettable experiences for their friends and loved ones – experiences that just happen to come in the form of a high-quality cake, delivered in a premium wooden box, to their front door.”
“Sweet City does sell home-delivered cakes,” I continued. “It sells memorable experiences that people can share with each other and their friends.”
A few good questions go a long way
We had successfully reframed the customer problem thanks to a few well-pointed questions.
Suddenly, Gergő’s face lit up with excitement. “I’ve been selling the right product to the right customer, but positioning it to solve the wrong problem,” he concluded.
The follow-on impact was immediate.
We talked about the importance of filling the website with photos of happy customers delighted by the sight of a specialty cake delivered in a beautiful wooden box.
We agreed that the main headline on the website shouldn’t be “Order your favorite cake online, and we’ll deliver it safely to your home.”
It should read: “Make your loved one’s next birthday one they’ll never forget”
“I really liked this straightforward, solutions-focused approach,” Gergő later reflected on the process. “We arrived at the solution a lot more quickly thanks to focusing on the right questions.”
The right value proposition opens new possibilities
We continued brainstorming about the products and services Sweet City could add to its product offering: special champagnes and wines for a romantic evening, or unique birthday party favors to enhance a birthday celebration.
This would be an experience that a young, urban woman could post on Instagram, or one moms or Super Dads could brag about to their friends and co-workers.
We followed through by answering the remaining four questions of The Launch Code’s 5-step value proposition process. We confirmed the target customer, clarified the product/service description, identified the key benefit and finally, determined the competitive advantage.
In the end, we arrived at a value proposition statement that captured the real essence of Sweet City’s business.
It read: “Sweet City is a home delivery service that helps young urban women and parents create memorable experiences for their kids and loved ones by delivering one-of-a-kind cakes and premium beverages to their doorstep.”
Sweet lessons you can learn
What lessons can you learn from Sweet City’s value proposition discovery process?
Lesson 1: Understand your target customer from the inside out.
Don’t just define them by their demographic characteristics like age and income level, but also by what is important to them as individuals.
Lesson 2: Look for ways to solve emotional problems for your customer.
Feelings last much longer than rational results. Find opportunities to delight your buyers and they’ll remain more loyal to you than if you just “scratch a short-term itch.”
Lesson 3: Find someone who can challenge your basic assumptions.
Just because you’ve been doing something a certain way, doesn’t mean that’s the best way. Contact a trusted advisor who can ask the right questions and make you think through alternative paths that lead you to the same destination.
Gergő and Sweet City are now implementing a range of changes to their business that reflect this new value proposition.
“We’re creating a new user experience layer to the website based on our redefined target personas and adding new mood photos and product packaging,” Gergő explains. “We’re doing everything we can to emphasize the experience of buying from Sweet City.”
Stay tuned to find out if Sweet City manages to have its cake and eat it, too!
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