Value Proposition (Concept, Features & Examples)

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value proposition

Know the Importance of Value Proposition in your Business

Are you giving your customers the most compelling reason to buy from you and not from your competitors? If yes, you are offering them your value proposition.

What is a value proposition? – The definition

Value Proposition is the promise of the value that will be delivered to your customers from your offering (i.e. your products/ services) after they buy the offering. It convinces your customer to choose your product/ service from among the available alternatives in your target market.

Points to be noted:

  • An effective value proposition does not promise to solve all the pain points of the customers or fulfill all their needs. It only solves those problems, provides benefits, or fulfills the needs that customers care the most or that truly matters to them.
  • Value is not measured in absolute terms but as relative importance for customers. The difference between perceived benefits and relative costs (that customers incur to get those benefits) is the value for customers and true motivation for them.
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What Value Proposition is and is not!

The value proposition is often confused with other things like a catch-phrase, slogans, or tagline. The following table clearly outlines what value proposition is and what it is not.

McDonald’s Value Proposition v/s Tagline

Features of an effective value proposition

  • Clarity is the most important feature of an effective value proposition. If it’s not conveyed to your customers clearly, they will not understand the value they get from your offering and thus your startup may fail even before getting its first taste of the market. It should be crafted so well that customers understand the offered value in seconds.
  • It is targeted for a specific persona or demography. Your offering is not meant for the entire population but only for a specific group of people who face similar problems or pains, expect similar benefits, or have similar needs. A user persona is mapped based on age, gender, profession, income, lifestyle, behavior, motivation, etc.
  • A well defined and ‘hard to copy’ competitive advantage should be intrinsic to an effective value proposition.
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  • It should convey your customers the reason to choose you over your competitors with clarity.
  • It should focus on very specific pain points, needs, and functional, emotional, or social benefits that your potential customers care about the most.
  • It indicates a product-market fit very clearly, through a value of the offering that matters most to the target customers (i.e. it solves important problems or fulfills real needs, alleviates extreme pain points, or provides essential benefits)


Points to remember

The following points will help you in writing a compelling value proposition:

1. Make it memorable

If you are a startup or SMB (small & medium business), you may have one or more competitors in your target segment. Your potential customers search for offerings in the market which may be similar to yours. Therefore your value proposition should be crafted in a way that your potential customers can easily remember.

2. Use the language of customer

Since your value proposition is designed for your customers; there can be no better means of designing your value proposition other than using the language they understand. Ask your current or potential customers to answer questions such as:

a) What benefits do they get?

b) What problems are solved?

c) What pains are relieved?

d) What needs are fulfilled?

e) Why they chose or would prefer to choose you over competitors?

The language they use to answer these questions will play an important role to attract your future customers. They can associate themselves more closely with your value proposition through the language they understand.

3. Keep it simple

Your value proposition should not confuse your potential customers. It can be detrimental to your startup if they understand something which is not intended. A very straightforward message encapsulating the value for customers is all that is needed.


Elements of the value proposition

Value Proposition consists of:

1. The main statement that describes the core value (in the form of benefit, solution to a problem or fulfillment of need) that customers receive from your offering

2. An optional description of additional benefits.

3. An optional visual image helps you to enhance the message you want to convey.


Examples of a strong value proposition

The following examples of compelling value propositions will help you get a feel of their actual working.

1. Shopify

Shopify’s value proposition says, “One platform with all the e-commerce and point of sale features you need to start, run, and grow your business”.

It provides everything to start, run, and grow business on a single platform. Here the needs of someone who is starting a new business are addressed clearly. It conveys the message to new or existing offline businesses that all their needs and problems in starting & running a business online will be taken care of by the Shopify platform.

2. Apple iPhone

Apple has multiple products in its basket. So we will take the most popular one among these products i.e. Apple’s flagship mobile device; ‘the’ iPhone. 

The value proposition of the iPhone says, “A phone should be more than a collection of features. That above all, a phone should be absolutely simple, beautiful and magical to use”.

To set the iPhone apart from the competitors, it offered a unique user experience that no other smartphone manufacturer could match. The ease of use, appealing design, and aspirational qualities are what it offers to its customers apart from some of the unique features related to user security, privacy, etc.

3. Uber

Its value proportion is on two sides. 

On one side is the customer or rider. The value proposition which is intended for customers says, “Uber is the smartest way to get around. One tap and the car comes directly to you. Your driver knows exactly where to go and payment is completely cashless.” Note the clarity with which the benefits and solutions to riders’ problems are conveyed. Riders’ pain in searching for a taxi is gone. Riders get the benefit of enjoying the ride even without cash.

On the other side are the drivers. The value proposition for them, “If you have a car and a smartphone and a little spare time, you can make some extra money”.


To Wrap Up

A strong value proposition is key to acquire potential customers. But it can only be effective if the value is not just created on paper but is crafted & also delivered to the customers for whom it matters the most.


Do you feel there is something more to be included? Kindly write to us. We will be more than happy to consider your valuable suggestions.