Your value proposition is the core of your competitive advantage. Every business needs one to differentiate itself from competitors.
val·ue prop·o·si·tion
noun
(in marketing) an innovation, service, or feature intended to make a company or product attractive to customers.
Oxford Languages
A value proposition is a statement which clearly identifies the measurable and verifiable benefits the consumer receives when buying a particular product or service. It serves as both a marketing statement and a sales pitch, but it is more expansive than a slogan, catchphrase, or positioning statement. The statement should persuade your target consumer that your product (or service) will add more value, or better solve a problem for them.
When complete, your value proposition should succinctly and clearly convey three important points to reader:
- Relevancy. Communicate how your product solves customers’ problems or helps them overcome challenges.
- Quantified value. Communicate the specific benefits delivered.
- Differentiation. Communicate why your ideal customer should buy from you and not from the competition.
Consumers should be able to read or hear your value proposition and understand the delivered value, without needing further explanation.
The Benefits of Creating a Value Proposition
A well-articulated value proposition provides many benefits for you and your business. It helps you understand what the primary focus and goals are within your business and helps you to better understand the needs of your customer. More specifically, the benefits include:
- a strong differentiation between the company and its competitors.
- an increase in product/service quality.
- better operations efficiency.
- an increase in revenue.
Not only can businesses use this statement to target customers, they can also use it to entice new partners, employees, and suppliers.
A successful value proposition should be persuasive and help turn a prospect into a paying customer.
Investopedia
As the environment changes, and the customer’s desires change, the value they seek changes too. To address this, companies are investing more resources into marketing research; allowing them to gain deep customer insights and improve their value proposition.
How-to Build a Value Proposition
Developing a value proposition is based on a review and analysis of the benefits, costs, and value that an organization can deliver to its existing/prospective customers. Be careful not to confuse the benefits you provide with the features your product offers.
Although each company’s value proposition should be unique, value propositions generally share a few of the same key elements. Generally, they contain a bold and memorable headline, sub-headline, and one paragraph of text, with a visual (photo, hero image, graphics). The design of this text can vary, from a paragraph format to list form.
When creating your value proposition, it is recommended that you structure it using this formula:
Headline. In a single, short sentence, describe the end-benefit you offer and for whom.
We deliver a detailed go-to-market strategy for your startup.
Sub-headline. In a concise sentence, provide a specific explanation of what you offer and why it is useful.
Our go-to-market research clearly identifies opportunities to increase awareness, market share, and revenues.
3 bullet points. List the key benefits you provide to consumers.
- Increase awareness.
- Increase market share.
- Increase revenues.
Visual. Images convey information much faster than words. If you have the opportunity, show the product pic, the hero shot, or an image reinforcing your core message.
All effective value propositions are easy to understand, and communicate specific results for a customer using a product or service. If properly articulated, they differentiate a product or service from any competition and communicate value, using only as many words as necessary.