So what’s the role of a value proposition?
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So what’s the role of a value proposition?

3rd December 2012
By Staff

Wikipedia defines value proposition as: A promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition can apply to an entire organisation, or parts thereof, or customer accounts, or products or services.

So, a value proposition answers a fundamental question which all potential customers ask:

Why should I buy this product or service?
Get the answer right and your business will see the benefits in terms of sales and bottom-line. But getting it right is not that simple.

Rational v emotional benefits

When looking at your value proposition, you need to think about how people go through the purchasing decision making process and criteria.
Two main decision making criteria are emotional and rational and it is important to consider both. The emotional and rational investment that your customers will make will have an impact on how you ‘pitch’ your service or product to them. It seems ‘rational’ that you would base most of your value proposition on rational buying criteria as most people will consider these aspects, but at this point it is important to avoid jumping straight to the rational features and benefits of your product.

Don’t under estimate the impact that emotional buying criteria can have, because sometimes people just want it! For example, when Steve Jobs was asked why people would want to buy Apple laptops, his answer was “Because we made the buttons look so good you’ll want to lick them.” Apple is now one of the most desired and sort after products in the world; don’t forget the power of emotion.

Consider both aspects of emotional and rational buying criteria when looking at your value proposition.

Emotional buying criteria

  • What it looks like?
  • What it feels like?
  • What is says about me?
  • Role in my life?

Rational buying criteria

  • What it does?
  • What it costs?
  • Is it easy to get?
  • Is it easy to use?

What should your value proposition be?

So you have thought about your customer offering, you have thought about the rational and emotional aspects of deciding to purchase your product or service. Now it is important to consider what your value proposition should actually cover.

I believe that your value proposition should:

  • Be customer needs/issues focused
  • Be benefit led
  • Position you against your competitors
  • Be grounded with facts
  • Motivate and invoke a reaction
  • Make your audience want to find out more
  • Be succinct

Before you release your value proposition, there are a few things you should check to make sure it is the best it can be.

Your proposition checklist

  1. Consistent with market trends
  2. Desirable by your target audience
  3. An ownable position
  4. Done better by you than the competition

But what does a value proposition look like? I would recommend that it should:

  • Be no more than 3 paragraphs, less than 100 words
  • Contain 3 elements:
    • The market situation and drivers
    • How your product/service fulfils this market need
    • How you set yourself apart from the competition


Harvard Business Review detail an excellent example of how one business transformed their value proposition based on customer insights.

The business was a manufacturer of industrial resin for paint targeting commercial painting contractors. Their new product was developed to be more environmentally friendly and was sold at a premium and marketed on ‘green’ values. However, customer research identified that environmental issue was not yet part of the purchase decision and cost control was the primary business driver. In addition only 15% of a painting contractor’s costs are the materials themselves. Labour is by far the largest cost component.

So they had to reposition their value proposition to focus on a customer benefit that was valued highly by audience, namely, increasing productivity. Customers bought into the revised value proposition, and the resins supplier was able to get a 40% price premium for its new offering over the traditional resin product.

In summary

A value proposition is an important element of your overall business strategy, allowing you to come back and review your customer offering on a regular basis to make sure you are always offering the best available service or product.
A good business value proposition should:

  • Demonstrate superior customer value
  • Provide a compelling argument for “why your brand/product/service” over your competitors
  • Drive the creative development/idea