How to Create a Value Proposition for Your Business

How to Create a Value Proposition for Your Business

As a business, we need to capture the attention of potential customers as quickly as possible by telling them how we provide a solution to their needs.

If customers understand exactly how our business provides them with a solution, they are more likely to become customers than if the value proposition leaves them confused as to what exactly we do.

This blog explores the Value Proposition and strategy on how to create one for your own business or brand.


What a Value Proposition?

A value proposition is a firm’s summary statement of why a customer would choose their product or service.

It is our promise to a group of customers, communicating our primary benefit and how we uniquely deliver value. It introduces our brand to consumers by communicating what our company stands for, what we do, and why we deserve the customer’s business.

We must clearly explain how the benefits of our brand’s products or services fit their need better than comparable products on the market.

Our benefits then become crystal clear to customers from the outset to persuade prospects to become paying customers. The number one reason a product or service is best suited to that customer must be communicated directly to consumers?—?through our website and other marketing materials.

The value proposition is an essential element of a firm’s overall marketing strategy. Unique to a firm, it becomes the foundation for our brand identity, branding strategy and position in the market.

However, it is not the same thing as a positioning statement. Positioning is just one component of our value proposition –communicating what makes our products or service unique from the competition.

“A clear and effective value proposition should be the basis of a firm’s functional, psychological and economic value.” (Hassan, 2012)

The Importance of a Value Proposition

The value proposition communicates a business/brand’s most important reason someone should do business with you and not the competition.

How do you provide the most value?

This can provide a competitive advantage if done well.

It becomes a focus in our marketing and should always be prominent on the website and other customer touchpoints such as social media.

For many consumers, your value proposition is the first thing they encounter?—?so it should differentiate you from the competition.

However, many firms do not have one. According to HubSpot, only around 60 percent of businesses do. But a lot of businesses do not do it well which becomes a problem if customers then do not immediately understand the value of what you offer.

Many customers will research several options before making the purchase. A value proposition can help your business to stand out amongst these alternatives, be noticed and remembered.

An excellent value proposition helps potential customers to quickly understand how you uniquely provide value. If it is not immediately clear what you offer, you will likely be disregarded. The value proposition should target your ideal customers/market segment by identifying why your solution best fits their needs.

“These days, an elevated level of competition and rapid changes in the market and technology make it complex for a company to sustain momentum without focusing on deliver the value that customers require.” (Hassan, 2012)

Creating a Value Proposition

When creating our value proposition, we must define what we offer and explain how we provide a unique solution or benefit, best suited to meet a specific need of a specific group of customers.

First, we must identify all the benefits of our products or services, and what makes us different from the alternative options from competitors. Be as specific as possible when describing how this provides value, in an easily digestible way for the reader.

Strive to be too straightforward and the point?—?focus on clarity and the conciseness of your message.

You want the customer to understand your message, so avoid hype, marketing buzzwords and industry jargon.

“Identify the elements that make their offer superior in order to demonstrate, document and communicate them clearly to the targeted customers.” (Hassan, 2012)

It is also not your slogan or catchphrase. It is more than that.

A value proposition should target customers’ strongest decision-making drivers. To do this, we need to define how consuming our products or services are going to make their lives better and how their experience makes them feel.

Customers can have several motivations, including wants which are emotional drivers, rational needs, and fears which are about avoiding undesirable outcomes.

Focus on how customers define value. By connecting our value to the challenges of our target customer, the value proposition becomes clearer.

Research

Before writing our value proposition, we need to be truly clear on what customers we are targeting with our products or services.

Different customers perceive value differently. More than one component of a product or service adds value, such as price, quality or location. Therefore, we need a deep understanding of the market we are in, to help identify our target customers’ expectations, to best address their needs.

How to Create a Value Proposition for Your Business

Market research will help us understand what customers are looking for in the product or service that we offer and how they phrase their needs. A value proposition is written in our ideal clients/customer personas’ language, which can often be different to how we as the business would phrase it.

This helps us to determine the message that resonates best with our ideal customers and/or main buyer persona, so the right language is incorporated into the value

Some of the things we are trying to learn through market research are:

  • Who our target customers are?
  • What their values are
  • What their needs are
  • What their motivations are
  • What your competitors are lacking
  • What your product or service does better
  • Why this difference matters to customers

“…Whether the value propositions of a company’s business model correlate with the actual needs of the customers it wishes to serve.” (Osterwalder, Pigneur, Bernarda, & Smith, 2014)

Formatting a value proposition

The value proposition must answer what we offer, who is it for and how it is useful. It will usually follow a particular format, using a headline, sub-headline, and a short paragraph of text, with a visual.

A value proposition must have a strong and clear headline to grab the attention of customers. It summarises your key benefit to the customer in one sentence, so needs to be both clear and instantly credible.

The format for this could be “We help (X) do (Y) by doing (Z).”

The sub-headline is a 2–3 sentence paragraph. It is a specific explanation of what we do/offer, for whom it is for, and why it is useful. The final paragraph explains this more in-depth by outlining more about what you offer and why it is superior.

Key benefits or features are listed, often as bullet points for ease of reading.

An image can communicate much faster than words, so a visual such as a photo or hero image is another key component of our value proposition. A hero image is an oversized banned image a webpage that services user is the first glimpse of the company.

“An entire set of experiences, including value for money that an organization brings to customers. Customers may perceive this set or combination of experiences to be superior, equal or inferior to alternatives.” (Lanning, 1998)

Testing your value proposition

After the research and writing our value proposition, we should test it. Research has shown that half of the businesses do not optimise their value proposition.

So how do they know if theirs is any good?

Testing the effectiveness of your value proposition helps objectify the process a little.

As well as surveying customers or using a focus group, you might consider running A/B tests. You can test two alternative value propositions by driving traffic to two different landing pages. Targeted Facebook ads, Google ads or email marketing are an effective way of driving relevant targeted traffic to these landing pages.

If one page performs better than the other by generating more engagement and conversions, then this gives an objective answer for which is a better fit.

This process can be used several times to further hone your value proposition to improve results.


In summary, a value proposition is the summary statement of why a customer would choose a company’s product or service. It frames how they uniquely provide value to customers.

This article has discussed the importance of creating a value proposition and the steps a business can take to create their own, to differentiate themselves from the competitors.

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Author: Daniel Hopper

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