"One of the common mistakes"— Shark Tank's Robert Herjavec talks about customer's value proposition

Robert Herjavec, a prominent entrepreneur and investor known for his role on Shark Tank—an American business reality television series that premiered in 2009 and showcases entrepreneurs making business presentations to a panel of investors—emphasizes a critical aspect of business success: a clear understanding of the value proposition to customers.

In a YouTube post dated December 6, 2024, Herjavec stated,

“One of the most common mistakes that in my experience people make when they start a business, they’re not clear what the value proposition to the customer is. They look at it through their light.”

He highlighted a frequent challenge faced by new businesses—failing to clearly define what value their product or service provides to the customer.

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Shark Tank's Robert Herjavec on the importance of defining a customer's value proposition

Herjavec explained that value proposition is essentially the promise a business makes to deliver value to its customers by addressing specific needs or solving a problem. Herjavec emphasizes that many business owners fail to realize that value is not perceived from the entrepreneur's perspective but from that of the customer.

This misunderstanding can create a disconnect between the business and its target audience, impeding growth and customer loyalty. Herjavec uses the example of "sell me this pen" to explain the importance of understanding the customer.

The Shark Tank investor clarifies that the correct answer is not about selling the pen itself but understanding who the customer is. Before focusing on the product, an entrepreneur should first ask who to sell the pen to. Herjavec also stated in his YouTube video,

"You heard the famous, sell me this pen. Do you know what the right answer to that is? It's not selling the pen. It's before I sell you the pen, tell me who I'm selling the business to."

Recognizing the customer’s needs, preferences, and pain points is vital before attempting to sell a product. Without this understanding, businesses risk offering products that may not align with what customers truly want.

The Shark Tank investor also shared that an effective value proposition articulates these benefits clearly, allowing customers to understand how the business’s offerings can make a positive impact on them. Stating on his YouTube video,

"Value is not through your eyes. Value is in through the eyes of the customers."

Furthermore, Herjavec highlights the need for testing and refining the value proposition over time. As businesses interact with customers and gather feedback, they can adjust their messaging to better meet customer expectations and improve engagement.

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Customer-centric focus

During his appearance at Venture Atlanta 2023 as a keynote speaker, Robert Herjavec discussed the importance of authenticity in business. He emphasized that standing out in a crowded market requires creating genuine connections with customers. He stated,

“You’ve got to stand out above the noise. And the one thing that seems to work over and over, the common thread, is authenticity with their consumer base.”

Shark Tank's Herjavec cited businesses like Tipsy Elves and Sand Cloud as examples where authenticity played a key role in fostering customer loyalty and driving business success. His examples illustrate how understanding the customer’s needs, creating authentic brand messages, and maintaining consistency can lead to long-term customer relationships.

“Before you sell me on your product or your incredible tech innovation... sell me on yourself. Sell me on you. Get my attention. If you can't engage, I'm not going to listen," he added.

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Don't miss out! New episodes of Shark Tank air on Fridays at 8/7c and are available to stream on Hulu.