By Natasha Teakle
Buzz words get thrown around in the innovation and commercialisation space all the time. Some are often overused – or incorrectly used – while others are not given the level of consideration required. Value Proposition is one of those, and learning to communicate yours is an important skill for all businesses.
In the agriculture and agtech sector, I’ve seen several startups fail to align their value proposition to the wants and desires of their customers. Being able to clearly articulate how you are creating value for a customer (or solving a major problem for them) is fundamental. You need to demonstrate that:
- 1. Your business is addressing a market gap, and
- 2. That a market actually exists within that gap. In other words, that there’s customers willing to pay for your product or service!
A Unique Value Proposition (UVP) should be a clear and compelling statement that highlights how you are creating value or solving a problem for a customer. Your UVP should demonstrate empathy – the ability to perceive the problem from the customer perspective – it should be solution driven, and it needs to highlight what is unique about your business.
Here are some questions you should ask when developing your Value Proposition:
- What problem are you solving, or how are you creating value, for a customer?
- How is your product or service different from what is in the market already?
- What is your competitive advantage? Why can your team deliver this successfully?
Remember to tap into why people will buy something. The textbook definition of a value proposition is that it’s the intersection between what’s currently in the market, your offering and what the customer needs.
In reality, customers do buy things they don’t need all the time (“No, I did not need that extra pair of shoes”). But you need to understand why customers will buy something and even more so, how to make them want to buy it.
Remember that while your customer and end user are sometimes the same person – they are often also different. The customer pays for the product/service, while the end user utilises and benefits from the product/service. For example, some agtech companies may be selling their product to rural retail providers but the end user for their product is farmers.
This means that your value proposition needs to be tailored for both the customer and the end user.
When working in the agtech sector, there are five key areas where your value proposition should be addressing pains/gains for the customer and end user, with a focus on creating value. These include:
- 1. Saving time – innovations that reduce manual labour and can redirect staff to higher value tasks.
- 2. Saving money – focus on gross margin improvements, not just yield increase! This could also include improving gross margins by innovations that value add to raw products.
- 3. Saving lives – farm safety is an area that needs more focus in agriculture.
- 4. Saving the environment – technology to support more sustainable farming practices, including waste reduction.
- 5. Saving our health – more people are now focused on where their food is coming from and what’s in it. Consumer driven innovations will be a big focus for agriculture moving forward.
Here’s an example of a Unique Value Proposition from Grubs Up Australia:
We are on a mission to change the world’s perception of protein, solving a forecast global protein shortage. We provide customers insight and knowledge through consultancy, public speaking events, school incursions and provision of introductory products for educational purposes in the form of cricket dukkha and cricket spice grinders. Our aim is to create a unique commodity product to complement traditional protein sources.
For businesses of any size in any sector, its critical to understand from your customer’s perspective why they are willing to buy something, and to tailor your value proposition to create value for them.
Natasha Teakle is a WA-based research and innovation specialist with a passion for sustainable primary industries, commercialisation of new technologies and regional development. At i4Connect, she supports Aussie businesses on their Commercialisation journey through the Australian Government’s Entrepreneurs’ Programme.