Our content is free. When you purchase through links on our site, we earn a commission. Learn more

What Is a Value Proposition

As an entrepreneur, you have a product or a service that you want to sell. Why would a customer buy from you? The answer is: your Value Proposition. A value proposition is a short statement to your customers that explains why they will buy from you, and how you are truly different from your competitors.

That doesn’t sound too hard, right? It is actually quite difficult. Value propositions are difficult because they have to encapsulate the true value of your business in a short, easy to read statement. The worst part: they have to mean something!

What is a value proposition?

The definitions of value proposition might vary, but they have the same core elements. A value proposition must differentiate you from your competitors and answer: “why would a customer choose me?”

Don’t drown your customer in industry jargon, or fancy words. Speak directly to your customer in a way that they can connect with. The other pitfall you must avoid is generic language.

Find the true value that your business offers. Making claims like “We offer high quality ATVs, at affordable prices” is meaningless. Find an ATV dealer who claims: “We offer low quality ATVs, at exorbitant prices.”

Emphasize your price & quality elsewhere, and save the value proposition for your real value. Do you offer a warranty that is better than your competitors? Then you better highlight it.

Value Propositions Create Intrigue

Your value proposition should make your customer say “wow.” It should be clear that they can’t get your benefit from any of your competitors. If a customer walks away from your business thinking “they offer high quality and low prices” then go to your competitor who says the same thing, then you’ve done a poor job of building value for your customer.

Your value proposition should be something that stands out in your customer’s mind, and it is even better if it is measurable. Going back to the warranty example, if your customer can walk away knowing that you offer a 5 year warranty, and the competitor they are visiting offers the same product but only with a 3 year warranty, you have better value, and you’ve communicated it well.

How to Write a Value Proposition

You might be asking yourself “how do I write a value proposition?” Ask your customers who have purchased from you what they liked most about your product, service, or doing business with you. If you get enough responses, you’ll start to see trends that will tell you what your value and differentiating factors are.

Another way is to keep your closest competitor in mind, then think of this scenario: your typical customer asks you “why should I buy from you and not them?”

Write your answer out, read it back to yourself, and be honest. Does it highlight a true value that your competitor wouldn’t be able to claim? Is it written in language that your customer can easily understand? Is it intriguing? If it is, then form it into a value proposition; if not, then find your value.

Value Proposition Critic

After you’ve written out your answer, pretend to be your competitor (you’ll feel silly, but that’s OK). Try as hard as you can to poke holes, discredit, or render the value proposition null. Be brutal, and if you can’t, then ask a friend to do it for you.

Value Proposition Example

For this example, I run a luxury soap company that only uses organic ingredients.

Value Proposition Example 1: “Our saponification process uses special triglycerides. Feel the difference.”

Value Proposition Example 2: “Our soaps are made with 100% organic, fair trade ingredients. 93% of our customers have reported noticeably smoother skin within 1 week.”

In example 1, it is shorter, but uses industry jargon and honestly misses a good majority of the offered value. Instead of letting our target customer know that we only use organic, fair trade ingredients, we said they were “special.” Additionally, we ended the value proposition with a slogan. Will our customer go to a competitor and think “feel the difference?”

Example 2, although a bit more wordy, does a better job of providing measurable value. Our target customers care about organic, fair trade products, so we let them know we use those! Additionally, one of our research studies provided excellent statistics that prove the “feel the difference” slogan but provided true information. We didn’t do that study for fun, brag about that 93%!

Now, our customer can go to a competitor and ask “what percentage is organic & fair trade, and how do your other customers feel about your product’s quality?”

Finding your value proposition will be difficult, but if you master the art of effectively communicating your value, you’ll experience greater success in your entrepreneurial endeavors. Knowing how your market thinks, speaks, and what they value will go a long way to communicating an effective value proposition.

Share This