What Is a Value Proposition?

A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

The value proposition focuses marketing efforts on the unique benefit to customers. This helps focus the offering, but also guides organizations in determining which customers they should target and how best to describe their offerings to highlight the value.

A value proposition needs to answer the question: why should someone buy what you are offering?

If you look closely at this question it contains three components:

• Who? The value proposition does not name the target buyer, but it must show clear value to the target buyer.
• What? The offering needs to be clearly defined in the context of that buyer.
• Why? It must show that the offering that is uniquely valuable to the buyer.

What Is An Effective Value Proposition?

A value proposition should be clear, compelling and different.

1. Clear – Short and direct, to immediately identify both the offering and the value or benefit
2. Compelling – Describing the benefit in a way that motivates the buyer to act
3. Different – Setting the offering apart, or differentiating it, from other offerings

The Value Proposition in Action

Let’s take a look at some real examples and evaluate them. Are they clear, compelling and direct? Keep in mind that you may not be the target market for all of these examples. Your role as a marketer is evaluate them from the perspective of the target market.

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 Pinterest

This value proposition does not go into a lengthy description of what Pinterest is and how it works. It simply focuses on what benefit that offers its users.

Notice the use of the phrase “people like you.” The value proposition connects you to the sites other users.

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Skype

The value proposition first highlights Skype’s broad use, which is an important feature for its network-based approach. Next it describes the offering.

Again, notice the use of the word “you” in the value proposition.

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Salesforce.com

The value proposition for Salesforce.com includes the acronym CRM, which stands for customer relationship management software. Not everyone knows this acronym but Salesforce is confident that its target market knows what a CRM is, and is seeking such a system to improve its sales management processes and results.

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Uber

This value proposition is very simple, but it describes enough about the value that you may want to learn more about how it works.

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Netflix

Again, Netflix does not go into the detail of how its service works. It emphasizes why you should want the service, as well as the affordability.