Value Proposition Definition

At face value a value proposition can seem relatively straightforward; yet I’d suggest that this is why in practice they’re often not paid the due attention they require. In reality, building an impactful and motivating value proposition entails structured analysis, focused thinking, and an ongoing commitment to testing, iterating, and honing. As a starting point, finding an effective value proposition definition is not easy - there are numerous formulas and methodologies available for developing a ‘value proposition’, yet most only focus on certain aspects and dimensions, failing to give a complete view of how the organisation derives and realises the value that it generates. This therefore limits the application and usefulness of the exercise.

To be clear upfront, a value proposition is not simply a description of your company or product; it's not a mission statement or elevator pitch; it's not a marketing message or advertising slogan - although it guides all of these, and much, much more. My value proposition definition is as follows:


The value proposition articulates the promise of the overall experience and resulting benefits that a specific customer audience can realise from the utilisation or consumption of a product, service or solution.

In this respect, it IS the business - without the value proposition there is nothing. If a company cannot create and deliver value to someone, either an individual, group or organisation, that provides sufficient advantage so that they're prepared to pay for it in time, energy, money, focus, then the business will not be viable.


“Everything we do is oriented towards making good on our value propositions. To the extent that we achieve this, we believe our target market will love our product and our business will work.”
Aaron Schildkrout - HowAboutWe.com CEO

The value proposition should encapsulate the overall value that the target audience will experience; this goes beyond merely the product or service that is being delivered - it is everything that the potential customer perceives to be of value. This could reflect tangible aspects such as functionality, quality, design, price or brand; or it could be derived from the emotions that the customer experiences: status, confidence, belonging, happiness, satisfaction, excitement, relief, etc. To create value it is imperative that the benefits delivered are grounded on what is actually relevant and compelling to the intended customer. It must first be based on a specific need present with the customer. A need is defined as: "a lack of something wanted or deemed necessary; a requirement, necessary duty, or obligation; an urgent want, as of something requisite" (Source: dictionary.com). A 'need' therefore contains an emotional component above-and-beyond merely a fulfilling a functional purpose - it is more than just solving a problem: the basis must be relevant and meaningful to the protagonist. This is the starting point in deriving value. The more the need, the more conscious the potential customer is of it, and the more frequently they experience it, the greater the value that can be realised.

Value Proposition Promise

The key word in the value proposition definition above is 'promise'. A value proposition reflects the promise of the experience that will be derived from the utilisation or consumption of a product, service or solution. Promises - when kept - lead to trust; and trust is the fuel of relationships which, in turn, are the basis for all businesses. The promise has to be believable though; if people don’t feel that you can deliver what you’re saying you're going to, they have no reason to pay any attention to you. You need to provide credentials and evidence upfront to earn the customer’s trust in order for them to make the effort, sacrifice or payment that you desire. People don't give their trust lightly.

Ultimately your value proposition also needs to be ‘remarkable’ – if you don’t offer anything that people can remark about, they have nothing: a) that will drive preference in the customers’ minds, and b) that they can - and will - talk about, and therefore they won’t share with others. Being remarkable has two components:

1. You need to be able to create an impact with your intended audience so that they notice you.
2. You need to have a uniqueness that gives them a reason to desire and choose you over your competition.

By delivering these two aspects you have the basis upon which people can remark. You must recognise that many companies will be competing for the general need that you're wanting to fulfil. To be remarkable don’t shy away from the similarities with your competitors, but find at least one aspect of value where you can excel; in this way you become the best choice for your optimum customer.

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