What is a Value Proposition?

Value proposition; solves your customer’s problem, satisfy their needs and shows your (potential) customers why they should buy at your company. It's one of the most important building blocks of your business model canvas.

Value proposition is the main reason why customers stay with your company or leave to another. A value proposition is a promise from an organization to its customer of value to be delivered. It’s the main reason a potential customer should buy from you. 

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Customization for example, meets the specific needs from customers. In the auto industry, customization is the primary key to value proposition. A traditional way to create value proposition is improving products. Mobile phones and PC’s are a good example of improving products. Other important factors to create value proposition are; the way you set prices, design, image, status, cost reduction, accessibility of the product and the usability.

 You need to understand your customer completely, before you add value proposition to your products and services. You need to speak the same language as your customers do. Your value proposition should join the discussion that is already going on in the customer’s brain. In order to do so, you have to have your customers explaining what products and services you’re offering and how they benefit from it. Do not try to guess how your customers explain your offering, because you will both definitely speak different languages.

The value proposition on your website (or folder, brochure, etc.) usually consists of a block of text (headline, sub-headline and one short paragraph of text) and a visual. You can edit your value proposition anyway you want to, but make sure that the answers of the following questions are featured.

  • Which needs of your customers are you fulfilling (with which products)?
  • What product/service are you offering?
  • What is the advantage of using this product/service?
  • What’s the target for this product/service?
  • What makes your offering exclusive and special for the customer?

Often, it’s the little things in life that make a big difference, which is likewise with value creation. Think what small things you could add that wouldn’t cost you much, but could be attractive to your customers. Those small things can be like:

  • Free shipping (Zalando)
  • Next day shipping (Bol.com, until 23:00)
  • No sign up costs (Facebook)
  • No long-term contract, cancel any time (TV or energy)
  • Customizable (Rolls Royce)


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