Communicating the Value Proposition

Learning Objective

  • Define and communicate an organization’s value proposition in a competitive marketplace

What Is a Value Proposition?

We have discussed the complexity of understanding customer perceptions of value. As the company seeks to understand and optimize the value of its offering, it also must communicate the core elements of value to potential customers. Marketers do this through a value proposition, defined as follows:

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.[1]

Photo of seven green apples surrounding one red apple.

It is difficult to create an effective value proposition because it requires the marketer to distill many different elements of value and differentiation into one simple statement that can be easily read and understood. Despite the challenge, it is very important to create an effective value proposition. The value proposition focuses marketing efforts on the unique benefit to customers. This helps focus the offering on the customer and, more specifically, on the unique value to the customer.

A value proposition needs to very simply 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 defined in the context of that buyer.
  • Why? It must show that the offering is uniquely valuable to the buyer.

How Do You Create an Effective Value Proposition?

When creating or evaluating a value proposition, it is helpful to step away from the long lists of features and benefits and deep competitive analysis. Stick to the simple, and strive for focus and clarity.

A value proposition should be clear, compelling, and differentiating.

  • Clear: short and direct; immediately identifies both the offering and the value or benefit
  • Compelling: conveys the benefit in a way that motivates the buyer to act
  • Differentiating: sets the offering apart or differentiates it from other offerings

Also, the value proposition is a message, and the audience is the target customer. You want your value proposition to communicate, very succinctly, the promise of unique value in your offering.

Click on the link below to read a nice description of the value proposition from a marketing consultant’s perspective:

Quick Sprout

Check Your Understanding

Answer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.

Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.