Your company’s competitive edge hinges on its value proposition. If you can't clearly differentiate your product or service from your competitors — and then deliver on your brand promise — why should customers choose you?
The stakes are high, but crafting a compelling value proposition shouldn’t be daunting. (And if it feels that way — take a deep breath. We’re in this together.)
In this article, we’ll define what a value proposition is, and just as importantly, what it isn't. We’ll also break down examples from seven well-known brands.
What is a Value Proposition?
A value proposition is a concise statement that communicates why buyers should choose your products or services. It's more than just a product or service description — it's the specific solution that your business provides and the promise of value that a customer can expect you to deliver.
A value proposition, sometimes called a brand proposition or core proposition, might be the difference between losing a sale and closing it. In other words: A great value prop is an essential conversion factor.
For that reason, it‘s important to create one that accurately represents your products and services, distinguishes you from competitors, and makes it clear why you’re the best choice.
Your value proposition is yours — it distinguishes your business from your competitors, and it clearly communicates that to customers.
Without it, buyers won't have a reason to purchase what you sell. They may even choose a competitor simply because its marketing campaigns and sales processes have a clearer value proposition.
Key Components of a Value Proposition
Target Audience
Clearly define who your product or service is for. Understanding your target audience is crucial because it allows you to tailor your value proposition to meet their specific needs and desires.
Problem Statement
Identify the main problem or pain point that your target audience is experiencing. This helps in making your value proposition relevant and compelling.
Solution
Describe how your product or service solves the problem. This is where you highlight the features and benefits that make your offering unique and valuable.
Benefits
List the key benefits that your product or service provides. These should be specific and quantifiable, making it clear what the customer will gain.
Differentiation
Explain what sets your product or service apart from the competition. This could be a unique feature, superior quality, better customer service, or a more affordable price.
Proof
Provide evidence that supports your claims. This could be in the form of testimonials, case studies, awards, or data that demonstrates the effectiveness of your product or service.
Creating a Value Proposition Canvas
A value proposition canvas is a tool that helps you ensure that there is a fit between the product and market. It consists of two parts: the customer profile and the value map.
Customer Profile
Customer Jobs
These are the tasks your customers are trying to complete, the problems they are trying to solve, or the needs they are trying to satisfy. They can be functional, social, or emotional.
Customer Pains
These are the negative experiences, emotions, or risks that your customers experience before, during, or after trying to get a job done.
Customer Gains
These are the positive outcomes or benefits that your customers want. They can be required, expected, desired, or unexpected.
Value Map
Products and Services
List all the products and services your value proposition is built around.
Pain Relievers
Describe how your products and services alleviate specific customer pains.
Gain Creators
Explain how your products and services create customer gains.
Steps to Develop a Strong Value Proposition
Research Your Audience
Use surveys, interviews, and market research to understand your customers' needs, preferences, and pain points.
Analyze Competitors
Study your competitors to understand their value propositions and identify gaps or opportunities for differentiation.
Identify Key Benefits
Focus on the benefits that are most important to your target audience and that your product or service can deliver effectively.
Craft a Clear Message
Write a concise and compelling value proposition statement that communicates the unique value your product or service offers.
Test and Refine
Test your value proposition with real customers and gather feedback. Use this feedback to refine and improve your value proposition.
Examples of Effective Value Propositions
Slack
"Be more productive at work with less effort." Slack’s value proposition focuses on increasing productivity and reducing effort, which is a key pain point for many businesses.
Uber
"The smartest way to get around." Uber’s value proposition highlights convenience, efficiency, and smart technology, appealing to users who need reliable transportation.
Apple iPhone
"The experience is the product." Apple’s value proposition emphasizes the unique user experience, which sets it apart from other smartphones.
Conclusion
A well-crafted value proposition is essential for attracting and retaining customers. It should clearly communicate the unique value your product or service offers and why it is the best choice for your target audience. By understanding your customers' needs, analyzing your competitors, and focusing on your key benefits, you can create a compelling value proposition that drives sales and builds brand loyalty.
Remember, your value proposition is not static. It should evolve as your business grows and as market conditions change. Continuously gather feedback, test new ideas, and refine your value proposition to ensure it remains relevant and effective.
Value Proposition vs. Mission Statement
Your value proposition details what you offer customers and why they should choose you, while a mission statement details your objective as an organization. Although the two may share elements, a value prop is more product- and service-oriented, and a mission statement is more goal-oriented.
Here’s an example for HubSpot’s Smart CRM, the AI-powered system that connects all of HubSpot’s products within the customer platform:
Value Proposition: “Free CRM Software That Grows With Your Business.”
Mission Statement: “Helping millions of organizations grow better.”
Value Proposition vs. Slogan
A slogan is a short, catchy statement that brands use in marketing campaigns to sell a specific product. While your value proposition wouldn't necessarily go in an ad (at least, not usually), a slogan would. The most important thing to note is that a company can have different slogans for different campaigns or products.
Here are two examples from De Beers Group:
Value Proposition: “Exquisite diamonds, world-class designs, breathtaking jewelry.”
Slogan: “A diamond is forever.”
Value Proposition vs. Tagline
A tagline is a short statement that embodies a certain aspect of your brand or business. While a value proposition is more concrete, a tagline can represent a concept or idea that your business stands for. Most businesses have only one tagline that is instantly recognizable and connected to their brand.
Target’s value proposition centers its commitment to creating “an unparalleled product assortment that goes beyond the basics. That means providing guests with high-quality designs they’re proud to buy, at affordable prices they love.”
Tagline: “Expect more. Pay less.”
4 Methods to Build Great Value Propositions
Steve Blank Method
Instead of focusing on the features themselves, Blank saw the need to emphasize the benefits derived from the features in a simple sentence. By following this formula you'll connect the target market and their pain points to the solution:
“We help (X) do (Y) by doing (Z)”
Geoff Moore Method
Moore provides a template that's more specific in identifying the industry categories alongside the benefits customers value. This makes a more clear value proposition formula as follows:
“For [target customer] who [needs or wants X], our [product/service] is [category of industry] that [benefits]”
Harvard Business School Method
According to HBS, a value proposition is executed best when it answers the following questions:
- What is my brand offering?
- What job does the customer hire my brand to do?
- What companies and products compete with my brand to do this job for the customer?
- What sets my brand apart from competitors?
Slow Storytelling Method
A 2022 paper in the Journal of Business Research proposes a different approach the authors call slow storytelling. It has eight steps:
- Narrating the organization.
- Redefining the audience.
- Articulating the heritage.
- Mapping the journey.
- Enhancing sustainability.
- Engaging the ethical consumers.
- Involving the customer as an advocate.
- Enriching the customer experience.
The slow storytelling method was devised explicitly for a highly digitized, post-COVID world. It’s built on the belief that activating social, environmental, cultural, and economic values makes for stronger value props.
The authors consider the context of our digitized world “by producing and communicating evocative stories of the products, by explaining their meanings to users and consumers, by presenting each product’s unique set of values, and by explaining to their customers how they are making an impact on society.”
