How to test and validate your value proposition fast
When I come across many agencies or consultants, they are stuck in this constant idea of “Do I niche down?”
If you are asking yourself that question, then chances are the answer is Yes.
But that doesn’t mean that it’s easy. Finding an offer and value proposition that resonates with the market can be a challenge.
Yet I have built a framework for building and testing value propositions at a rapid pace that I have used over and over for different clients and situations in the past.
In this article, I am going to share that framework with you and specific examples of value propositions that I have tested with this framework. We have also run similar tests for our clients at my Linkedin lead generation service. I have both examples of failures and successes so you can see what worked and what didn’t.
The Value Prop Testing Framework:
Define who you are targeting and what benefits you are bringing them
Build a simple landing page
Set up a cold email / LinkedIn outreach campaign
Launch outreach to them.
Evaluate if the offer resonates or fails
This sounds simple, and it is.
Basically, I am proposing that you create a hyper-niche offer for a target group of customers and then utilize cold outreach to validate that the market is interested in the offer.
It’s that simple. Now let’s dive into the nitty gritty.
Why cold outreach?
If you can succeed with cold outreach, then you have a killer value proposition.
Think about this, if your message is so strong that you can convert customers from reaching out to them completely cold, then you have just built a sales machine.
Once you have this machine built, you are unstoppable.
To double your sales, double the amount of outreach.
This sounds crazy, but it's not. In my first example, you will see how we literally built a scaleable sales machine using this exact approach.
The keys to a successful value proposition
Hyper-niche and focused
The first step in the process is to get clear about who you are targeting and what benefits you are bringing them.
The key here is to be hyper-niche.
For outbound campaigns to work, you cannot be a generalist. Every prospect is hit up by generalist providers all day long.
In order for your outbound campaign to work, your value proposition needs to be like a sniper rifle. Extremely targeted and unique in the market.
Fixes a pain point
The other key to a strong value proposition is that it must fix a pain point the customer has. As you will see in example #2 below, even if you get hyper-niched, your offer will fail if it doesn’t actually fix a real problem that the customer has.
Example #1: Failing as a generalist, succeeding in a hyper-niche
In addition to my consulting and work at Lead Cookie, I act as VP of Sales for The Negotiator Guru. When I joined the company, we were extremely vague and offered a pretty wide array of negotiation services to help companies reduce costs.
We kicked up our first outreach campaign with this value proposition, and we heard crickets…
Literally, ZERO leads or engagement in our offering.
As I learned the market more we found out that there were tons of other generalist providers like ourselves offering similar negotiation services, so we pivoted.
I used this Value Prop Testing Framework and put together SFNegotiator.com. I used Squarespace for the website so I was able to get a website up and running in just a couple of days.
This website is 100% focused on helping companies reduce their Salesforce.com expenses through contract negotiation.
Week 1 - We built and launched the website.
Week 2 - We launched a cold email campaign.
By the end of week 2, we booked our first phone call with an interested prospect.
Within 30 days we had booked 10 calls.
Within 90 days we had booked 30+ calls.
The value proposition was a knife that cut through the noise.
Lessons to learn from this:
We didn’t niche down the entire company, instead we just built a microsite for outreach.
We didn’t ponder about this for months on end, we had the idea and tested this within two weeks.
Once we validated the value proposition, we ramped up outbound to this and kept booking calls.
Our results also increased once we backed up our campaign with content about Negotiating with Salesforce.
Validating that value proposition meant we had built a sales machine
Think about this for a moment. We didn't just create a small quick win with this. We literally changed the course of the company forever.
We now know that we can drop leads into a cold email software, and we will book phone calls as a result.
We have now closed multiple of those phone calls into clients.
That means we have just built a sales machine.
We have an end to end funnel to grow our business just through cold outreach.
Over time, we will add inbound efforts to augment this, but we know that those efforts are well spent since we already validated our offer.
Validating through cold outreach is the fastest and best way to test out a new offer.
Example #2: A failed campaign due to a weak value proposition
About a year and a half ago I had an idea for a business that didn’t quite pan out. I used this exact same framework but failed to validate the value proposition.
The concept was simple: Sales teams need support researching their prospects.
ProspectScout was supposed to be a company of virtual assistants that put together detailed reports on the clients in a customers CRM. In theory, it sounded like a decent value proposition, so I built the landing page and started outreach.
What followed was a series of rejections and no response.
People simply weren’t interested.
They had other data providers that accomplished similar functions.
Or they weren’t willing to pay the rates we were planning on charging.
In a matter of weeks I went from idea, to landing page and to failing to validate the offer.
Within a month, I moved on from this business concept and called it quits on this one.
Friends will sugar coat their feedback, the market doesn’t:
At the time of starting Prospect Scout, I had several friends or colleagues who were interested in Prospect Scout and told me it was a great idea, but none of them saw enough value to buy from us directly.
People have a way of not wanting to tell you that your idea is crap. They will say “Oh this will be great for these kinds of people” instead of just saying “Dude, your idea sucks.”
At the early stages, you can’t trust your friends and colleagues to validate a business. They sugar coat it for you.
The market, on the other hand, does not lie. When you launch an outbound campaign, there is no denying the results you do or do not get.
Responses to your cold outreach campaign are cold hard facts that let you know if this business concept is real or a waste of time.
Example #3: Validating Lead Cookie
When I had the concept for Lead Cookie, I took this exact same approach. At the time I was focused on consulting for agencies as my primary market. So I first validated that Lead Cookie’s LinkedIn outreach tactics worked by using them for my own consultancy.
But then I needed to validate that the market would actually pay for this type of LinkedIn outreach service. To validate this offer I used the same framework.
First I built a website which was then called LinkedIn Panda. This was pre-Lead Cookie branding and it was a quick and dirty website just to validate the concept. It was horrible and dirty looking.
I was the only testimonial on the website… But I didn’t care. I got it up there and I started pitching it.
The methods of validation
1) I started converting calls I booked through my own LinkedIn outreach to Lead Cookie customers.
Since my consulting offer was “I help agencies and consultants win their dream clients” I was able to begin transitioning some of those conversations to “Try my LinkedIn Lead Gen Service”
Several people who I had never spoken to before not only showed interest, but they purchased. That was the first validation.
2) I launched a cold email campaign
I set up a PersistIQ account and started running cold email outreach to people who I thought were the ideal customers. At the time I was targeting the VP of Sales position which turned out to be a wrong avatar.
Regardless, I did get several of these people on the phone and quickly learned that owners or marketing departments were actually my ideal buyers.
Still, I started to see enough traction and interest in the offer and I learned enough through those early conversations that it was quickly validated.
3) I found other companies succeeding with a similar offer
Another piece that helped validate this need was market research. I went around and I found a handful of companies with a similar offer to what we were proposing.
The market wasn’t massively saturated, and to be honest the competition didn’t look too hot.
But one company, in particular, gave me hope. They had a very similar service and over 70 employees on their team!
I studied their company and saw faith in our offering. Their success validated what we were trying to do, yet I also saw areas that we could succeed in and do better than them.
4) I pitched my whole network (and they actually bought)
The next thing I did was scrape through my entire network. I dove through my CRM and looked at every prospect I had spoken to in the past few years which totaled over 330 conversations.
I took that terrible looking website and pitched the offer to about 30 of them who I thought were a perfect fit.
Within the first week we had over $5k MRR. A majority came from my network with one sale coming from LinkedIn outreach.
Within the first two months, we had $15k MRR.
So we buckled down and kept going.
Lessons learned from this test:
If you can convert customers from cold outreach, then you are on a great path.
Your personal network can be a great resource IF they buy. Don’t take nice feedback as a win. Let them vote with their dollars.
You might get your target buyer wrong at the start. That doesn’t mean your value proposition is wrong, it just means you targeted the wrong person. Adjust accordingly and validate with that new buyer persona.
Don’t try to start from scratch. If you can model after other companies who have done exactly what you are trying to do.
You can test across multiple channels at the same time. The more data the better.
Example #4: Test multiple channels fast with GovAssistant
A few months ago my wife was on the hunt for a remote job that would let her work from home. These jobs are few and far between and she was constantly frustrated by the options on the market that lined up with her skill set.
Since I am a bit of an entrepreneur, I thought it would be a good idea to help her create her own business :)
Here is the value proposition we came up with:
GovAssistant - Virtual Assistant for Government Relations Professionals.
It was a simple offer that tied exactly into her professional background. She had previously worked at Government Relations law offices as an executive admin, and knew that a large portion of her responsibilities did not require her to be physically present.
So, we went through the Value Prop Testing Framework.
First, we created a landing page and optimized her LinkedIn profile.
Second, we kicked off LinkedIn outreach toward Government Relations attorneys and professionals.
Within 48 hours of starting outreach, she had booked her first 2 calls!
She then started to get several other leads each day of people interested in her offering. People were writing on LinkedIn saying “I am very interested in your offer. Can you please call me tomorrow at ###.###.###”
Now the ironic part of the story is that she ended up finally landing a remote job the week we kicked this campaign off. So we ended up killing the website and the offer, but in a matter of two weeks, we were able to conceptualize and see early signs of validation.
My tools of choice for rapid testing:
Squarespace.com - Super easy to get a website up and running in a matter of days. You can also create a Google Apps email address from within Squarespace.
PersistIQ.com - My go-to cold email software tool. Although I often use Mailshake.com as a lower cost alternative during validation.
Another alternative approach is to use podcasting as a way to conduct market research interviews with your ideal customers. Check out our list of top podcast production companies if you are considering using a podcast as a way to interview and do market research with your ideal customers.
The Bottom Line
Don’t sit around and simmer on your niche or value proposition for months on end.
If you don’t want to pivot your entire businesses focus, then build a microsite and launch an outbound campaign. You can do this in a 2-3 week timeline and gain instant validation on if your offer is accepted or rejected by the market.
At Lead Cookie, we have helped many of our clients launch value proposition validation campaigns, so reach out to us if you need help.