Imagine you’re deciding between two pairs of shoes: One is locally made with 100% vegan leather, and the other has an ergonomic, comfort-focused design.
Naturally, you’ll choose the pair of shoes that align with the value you’re looking for. This is communicated to you via the shoe’s value proposition (in this case, vegan or comfort).
A value proposition can help you stand out to customers and gain a competitive advantage.
In this article, we’ll break down exactly what is a value proposition and what makes a good one. Plus, we’ll provide 12 tips for creating a value proposition for your own business.
A value proposition is a product or brand’s offer that tells you the value that will be delivered. It’s a way to package and communicate why your target customer should choose your product.
Why do you need it? Value creation itself is one of the main pillars of sales. Once you know your key values, you can start creating your value proposition.
A value proposition is more than just a catchphrase or tagline on your homepage. It should be an integral part of your overall branding to ensure a consistent customer experience across their journey.
With that said, it has become a common practice among businesses to place their value proposition “above the fold” on their website (the first section you see before scrolling). This way, the customer will immediately get a glimpse of your brand’s offering and know that they’re in the right place.
Here’s an example of a good value proposition:
“Zero-waste groceries, delivered fast. Access 2,000+ quality goods plastic-free, at a discounted cost.”
This value proposition does an excellent job at overcoming sales objections and expected customer needs, such as:
“I need zero-waste groceries”
“I need them delivered quickly”
“I’d prefer a greater selection”
“Cost matters to me”
On some homepages, you’ll see these value proposition features laid out in bullet points.
Value proposition is also not to be confused with the concept of a USP (unique selling point or unique selling proposition). USP is often used in internal-facing strategies, and it helps define differences from close competitors.
On the other hand, a value proposition is an external-facing narrative outlining how customers benefit from their unique offerings.
A great value proposition gives a clear idea of why the customer should pick you.
While simplicity is key, you should put considerable effort into creating the right value prop, as it can actually impact your sales metrics. Here are four factors to consider.
What’s the main problem your product is solving? Start your brainstorming there. Ask yourself what your product’s differentiation point is and how you can simply communicate the value to the customer.
Use a template like this if you’re stuck:
Let’s say you sell organic T-shirts hand-made by locals.
Your problem/benefit statement could be:
Then, put yourself in your customer’s shoes. What does your target market want? This could be your customer’s thought process:
“I need comfortable, ethically-sourced T-shirts from a trusted company”.
Then the starting point of your value proposition could be: “We offer comfortable, locally-sourced T-shirts that will make you feel like you’re wearing _______”.
You can end that sentence with a descriptor that suits your brand offering.
Once you’ve got your value prop, turn it into a phrase you can use easily. For example, Econic Apparel uses a brief but descriptive statement in this value proposition example: “Sustainable. Ethical. Canadian.”
You likely have a handful or more competitors to keep you on your toes. How do you stand out from the crowd?
You’re in business because you have a secret recipe for a product that others don’t. It’s time to play up your unique offering in your copy.
Your unique value proposition isn’t just a statement about why consumers should buy a product like yours; it’s a statement that explains why they need to buy it from you instead of your competition.
How do you create a value proposition that sets you apart?
Before jumping into a rigorous copywriting exercise, take a step back and assess your brand positioning. Ideally, you’ll be able to articulate your brand’s identity and tone of voice.
Once you can do that, list the key things that set your product apart from the competition. Ideally, you should consider three things:
The experience you give customers
Your product’s features
The key benefits that set your product apart from others
Once you’ve listed these factors, draft as many value proposition marketing statements as you can. Compare these statements to your competition’s value propositions and ask if they truly set you apart.
If not, go back to the drawing board and rework your statements until you find one that’s unique. The perfect statement will feel authentic to your brand while setting you apart.
The language you use in your own value proposition gives your customers a clear picture of your brand and what you value.
For example, consider Kewe Collective’s value prop: “responsibly sourced, consciously created.”
While this value proposition is only four words long, each of those words tells us critical things about Kewe Collective. For example:
“Responsibly” conveys that Kewe Collective understands its power as a large retailer and is acting for the general good
“Sourced” conveys that Kewe Collective have researched its entire supply chain and sourced its materials accordingly
“Consciously” conveys that Kewe Collective designed its production process around its values
“Created” conveys that Kewe Collective takes a high degree of care during production
Imagine Kewe Collective swapped the words in its statement for synonyms and changed its value proposition to ”carefully resourced intentionally manufactured”.
See how this changes the brand perception, even though we’re using words that mean the same thing.
The lesson here is that the words you choose paint a picture of your brand, so choose them wisely.
Which of these two statements stick with you more: “the cheapest tools, every time” or “here at Mike’s Tool Store, we sell you the cheapest tools for the job every time”.
While these value props convey the same meaning, one uses only four words while the other uses sixteen words.
And as the first statement is snappier, people are more likely to remember it accurately. This is because our short-term memory can only hold five to nine items at once.
When designing your value prop, focus on short, snappy statements. This means limiting:
Adjectives (i.e. choose “cheap tools” over “low cost, affordable tools”)
Hyperbole (i.e. choose “cheap tools” over “the cheapest tools in the world”)
Double negatives (i.e. choose “we have the cheapest tools” over “there aren’t no other stores with deals better than ours” – this would likely be a brand voice decision, but clear is always better)
Ideally, your statement should use language clear enough for someone just starting high school to understand.
Brands with effective value propositions build them based on sales data, as it tells you what your customers are willing to buy. Here are a few ways to develop a value proposition from your sales data.
Your perception of your brand can be vastly different from your customers. Though you may think that customers value one thing, they may really value another.
That’s where sales trends come in.
Sales trends show you the preferences of your customer base, as customers will buy more of your company’s products with desirable attributes and fewer products with undesirable attributes.
To discover your brand’s key attributes, rank your products from best selling to worst selling.
Then, look for commonalities among these products. For example, you may notice that locally made products sell better or that products that come with free shipping sell faster.
Once you have a list of common attributes popular with your audience, track how products with that attribute perform over a long period. That will tell you if customers favor particular attributes cyclically or year-round.
For example, do your customers prefer products in gift boxes all year round or just in December?
After you have this data, use it to build a value proposition consistent with the attributes your customers value the most.
Pain points are specific problems that potential customers want to solve. Pain points range from minor inconveniences (e.g. “shipping was late”) to major disruptions (e.g. “the product was low quality”).
Considering your customers’ problems is a crucial step in creating your value statement, as pain points are problems that customers care enough about to try and solve. And naturally, the larger the pain point for the customer, the more they value it.
To determine what your customers value the most, sort through your customer complaints, customer return comments and negative reviews, and then identify common pain points in the feedback.
Unfortunately, you can’t solve all of your customer’s pain points, as many will simply be out of your control. Instead, focus on the pain points that you could feasibly fix and find a solution to resolve them.
Then, redesign your products’ value propositions to match.
A buyer persona is a fictional representation of a person who embodies the demographic characteristics of your target audience as well as their values, tastes and customer behavior.
Building a buyer persona will help you visualize what customers value and design your value proposition to match, as you can understand their drives and motivations better.
To create a buyer persona, collect any market research you have on your customers and divide your customers into groups based on key attributes like:
Family status (i.e., single, married, married with children, divorced, etc.)
Once you have collected your audience demographic data, look for trends between each category and what they value.
For example, you might notice that men aged 30–45 value child-safe products the most or that women aged 50–55 value products with fast shipping the most.
To use this information, compare it to your current value propositions and ask yourself: “Is the statement consistent with what our customers value?”
If we learned anything from the fidget spinner phase of 2017 or Beanie Babies in the late ‘90s, it’s that trends don’t last forever. The same is true for your customer’s values, as people’s priorities change as their lives, hobbies and activities change.
To identify future trends to use in your value proposition sales statement, identify between five and seven potential options (like “free shipping”) and then identify products that fit into each trend and analyze the trend’s performance using your sales data.
Once you’ve collected this data, sort your trends from top-performing to worst-performing, select trends you can leverage and adjust your brand value proposition to match.
If you don’t have access to sales data, you could also identify trends through market research. You can perform market research using industry reports, tools like Google Trends, or by asking a sample of customers to rank trends from “most interesting” to “least interesting”.
There’s no limit to the ways you can source valuable data. What’s important is drawing valuable insights from them to execute your future strategies.
When creating a compelling value prop, you need to consider more than just data. Here are a few factors to consider.
Conducting market research on your competitors will help you create a compelling value proposition, as it will identify current gaps in the market you can leverage.
To carry out market research on your competitors, identify two to five of your closest competitors and conduct an analysis on their value proposition and marketing strategy using the SWOT analysis technique.
The SWOT analysis assesses your competitors in four categories:
Strengths are advantages your competitor has over the market
Weaknesses are areas your competitor is failing in
Opportunities are opportunities your competitor could leverage to grow
Threats are factors that threaten your competitor’s business
Once you’ve conducted your SWOT analysis, use it to identify factors you could leverage in your value proposition marketing. After that, integrate these into your company’s value proposition to make it more competitive.
For example, suppose you’re an app development startup and you’ve identified that your competitor has poor customer service and they’re limited to Android devices.
In that case, you could change your brand value proposition from “great ecommerce apps at great prices” to “Apple and Android ecommerce apps from people who care” and pair it with strong case studies.
In nine words, this new value proposition reveals a lot about what your company offers and how it’s different from your competitors:
“Apple and Android” signals that you can develop apps for both models
“Ecommerce” signals the industry you’re targeting
“Apps” signals your tangible product
“From people who care” signals that customer service is a priority
A/B testing is a form of research that allows you to compare the performance of a new value proposition statement to your current statement. Conducting A/B testing will help you strengthen your statement, as you can see if it will be effective before fully integrating it into your website, social media and branding.
To conduct A/B testing, determine which metric you’ll track to gauge its effectiveness (e.g. conversions, click-through rates, sign-ups, etc.). Publish two identical pieces of content on each of your chosen channels with the only difference being the value proposition statement.
For example, say you’re testing two value propositions on a landing page and you’re measuring sign-ups to a webinar. You’ve identified that your audience is small business owners and one of their pain points is having to download software locally.
Here are your two statements to test:
Webinar software for small business owners
Host high-quality webinars with a simple integration
Next, you’ll compare your customers’ reactions to each by identifying which statement yielded a higher click-through rate, a higher webinar conversion rate and more positive feedback.
If you offer a diverse range of products and services, consider using a handful of different value statements. After all, you could apply the statement “cheapest tools” to a range of drills, but not a line of work boots.
How do you create multiple strong value propositions?
To create consistent but different value statements, identify common elements each statement should emphasize (like “high quality”).
Then, create a list of the key individual factors for each statement, draft sample statements and compare them.
To keep your statements consistent, use similar formatting, tones and styles across all propositions.
For example, a hardware store could use “top quality tools, every time” for their tool range, “top quality boots, every time” for their shoe range, and “top-quality storage, every time” for their storage containers.
If every member of your company has a different impression of your value statement, it will appear inconsistent to your customers, as everyone will portray it differently.
You must ensure everyone understands your value prop’s vision and meaning.
To do this, include it in your sales management process by:
Holding a team meeting to introduce it
Including it in your onboarding materials for new hires
Including it in your branding guide
Integrating it into your CRM system (customer relationship management system)
Value propositions tell a story about your products, including what you do, what you stand for and who you are.
To design a good value prop, you need to: sell your product’s benefit, set yourself apart from competitors, choose the right language and make it clear. You can build your perfect proposition by drawing from your sales data and comparing your findings to market research and internal tests.
The bottom line is that creating your perfect value proposition is choosing a statement representing what you do for customers. So choose wisely.
Once you have your value prop, you will need a leading CRM platform to manage your sales and marketing. Try Pipedrive for free for 14 days to see how we can help your business grow.
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