Climate Tech Product Show Ep2: How to test a value proposition? - with Will Chan

Are you finding that customers don't understand what you offer?

If so, there might be a problem with your Value Proposition and its underlying messages.

People tend to think about conversion in the UX, creative or copywriting sense; but not in terms of MESSAGING.

What do we mean by messaging? It's the higher-order substance behind the UX, creative or copy.

Last week, we spoke with Adrian J. Stewart who gave us awesome tips on how to tackle the creation of the key messages that make a compelling value proposition.

This week, we spoke with his Co-Founder, Will Chan, who gave us a practical approach to taking these messages and testing them in order to drive improvements in conversion.

The importance of messaging

Communicating your product without being clear about the MESSAGING, is like giving a presentation without knowing the point you are trying to make. What's more, it's like giving the presentation without knowing your audience or what's important to them.

Communicating value

• The first step is to unpack the difference between true value (what you have) and perceived value (what they think you have). Value is not one-way, it has to be perceived. If your customers don't perceive the value in a feature, it doesn't matter how good you think the feature is.
• List out all the reasons why someone should buy from you and then rank them based on:
  1) importance to the customer
  2) unique points of difference and exclusivit
• Picture a Venn diagram where these two criteria overlap. That's your sweet spot.

Crafting Messages

• Craft messages from these priorities - the one-two words that sum up the essence.
• Play around with different expressions of the messages. This is how these messages come to life in more detail through words. This is what you would actually say in the copy.
• Your customer's problem awareness is another thing to consider as it will influence how you communicate.
• Get your customers to help and provide qualitative input before you move to digital. Have a conversation, share the expressions of the messages and let them tell you how they would articulate them.
• Avoid saying things directly, and instead, give your customers the breadcrumbs to conclude themselves. Imagine you are the best at something. Instead of saying "I'm the best", you would hint at it with claims of superiority.

Validating your message through ads

• Use an ad to validate through metrics what customers tell you through qualitative conversations.
• Ads are a good way to test as they force you to squeeze out the essence of your message. Facebook ads are easy to use and super powerful
• Limit your testing to two to three messages (MAX), with two expressions of each message. That means you will have up to six things to test.
• Especially, in the beginning, aim to test "Black and white" options with enough difference between them, not "shades of grey"
• Aim for about a $1k budget and four to five, one-week tests.
  
  

Interpreting results from ads

• Don't expect to nail it the first time around. If you don't get amazing results, maybe it's because you are not expressing the value in the right way. Or perhaps, you expressed it well, but you had the wrong message to begin with.
• You want to get consistent results from several experiments before drawing conclusions.
• Don't give up and keep testing.

Regardless of how you measure conversion, the overall framework and Scale Messaging's approach is relevant:

• Conversion on Physical Channels:

  • Outbound meetings requested to meetings completed
  • First meetings to proposal written
  • Referrals from past customers to new prospects

• Conversion on Digital Channels:

  • Visitors taking an action on your site
  • Audiences clicking on the CTA of your ad
  • Registrations to an event or newsletter

If you're not sure about how you can measure conversion, Pirate Metrics (AARRR) are a good starting point:

Source: Product Frameworks

Granted - testing on digital channels is fast and easy given advertising platforms like Facebook, but testing any of these conversions is doable if you approach it with some discipline and creativity.

Discipline:

Strategyzer's test card provides a useful framework to think through an experiment and its objectives before launching into it

1. Hypothesis

   • What is the belief behind the test? What do you believe to be true? This is just a starting point for further investigation. For example:
   • We believe that Climate Tech founders want to learn from experts and from case studies that can help them validate a product before building it.

2. Test

   • What is the experiment you will conduct to test the hypothesis? How much will it cost? How reliable is the data? For example:
   • To verify that, we will create a landing page where people can register for a webinar on the topic

3. Metric

   • What is the measure you will collect from the experiment? How long will you need to collect the data? For example:
   • And measure how many of the visitors to the landing page convert into webinar registrations over the course of a week.

4. Success Criteria:

   • How will you know if your hypothesis is right? What are the minimum success criteria? For example:
   • We are right if at least 30% of visitors to the landing page convert into registration

Creativity:

You need to believe that there is a way in which you can test your hypothesis. Take some time to think through the channel and approach that makes the most sense to your customer's journey. It's less relevant to test conversion on a landing page if most of your buyers are coming from foot traffic. Be creative here.

Building on the examples above, here are some ideas on how you could test conversion:

• Conversion on Physical Channels:

  • Outbound meetings requested to meetings completed
    • Send emails, inMails or any other one-to-one message with different key messages and measure how many respond.
  • First meetings completed to proposals presented
    • Use different versions of pitch decks with different key messages and value propositions targeting different customer segments and measure close rates
  • Referrals from past customers to new prospects
    • Offer different referral deals (X% off your next purchase, etc) to your existing customers to encourage referrals

• Conversion on Digital Channels:

  • Visitors taking an action on your site
    • Add a new button, registration, product, etc to your site and measure whether they take the new action. You can pair this with a new source to drive incremental traffic
  • Audiences clicking on the CTA of your ad
    • Run ads with different key messages, different creatives or different calls to action.
  • Registrations to an event or newsletter
    • Create landing pages with different topics and measure which one has the best conversion

This is where a bit of hustle can go a long way. It's easy to hide behind experiments on digital channels, but a conversion metric will give you no clue about the reason behind the user's behaviour. WHY didn't the experiment achieve the success criteria?

I always combine some data-rich quantitative tests with some feedback-heavy qualitative ones. What's more, it'll be really hard to have a decent starting hypothesis unless you've had qualitative customer conversations to give you insights to start your testing. So make sure you're including customer conversations in your approach.

David Bland is an authority on designing experiments and has a great book on the topic. Here is an extract from the book with even more experiment examples:

Source: Strategyzer