What is a value proposition? How to create a good one

Value proposition is a familiar term in any marketing strategy business. It is also one of the factors that determine consumer behavior. But not every business understands what a value proposition is and what it brings to a marketing campaign. This article MONA Media will take you deeper into the concept.

What is a value proposition?

A value proposition is also known as a value statement. It is the promise and commitment about the business benefits and the benefits of using a company's products and services. With it, customers can trust the company enough to choose its products and services, matched to each market segment of all kinds.

This statement lets a business explain and sum up why consumers need to buy or use its products and services. It sets the business apart from its competitors.

See more: How do you identify your competitive advantage in business?

Why a value proposition matters to a business

A value proposition matters because it shows up in every marketing strategy a business has, specifically:

• It is the point where customers and the business connect, helping customers agree to terms faster.
• It helps the business show the quality of each product, so customers accept it more quickly.
• Together with full product information, the statement helps customers understand clearly what they will be using.
• It builds a competitive advantage based on what makes the products and services different. More customers get to know the brand, and it leaves a mark on them.
• On top of that, it gives staff confidence when marketing, and gives customers peace of mind when buying products and services.
• And finally, it raises customer trust, so customers come to you and revenue grows quickly.

The basic criteria of a value proposition

A good value proposition wins over any customer by meeting these criteria:

• Focused on solving a problem: The value proposition fits the customer's needs, improves their life and solves all the problems they are facing.
• Short, easy to understand and memorable, so customers remember it for a long time: Most value propositions come with a short line of text that explains the value the proposition offers customers.
• Unique and convincing: Make the value proposition highly persuasive. Explain why customers should buy the product or service through standout features that are more useful than your competitors'.
• A value proposition must be intuitive: Customers should understand the value and benefit the business is offering as soon as they read it, without needing any extra message or explanation.

What does an ineffective value proposition look like?

A professional Value Proposition does not work if it has these traits:

• The content is unclear, clumsy or vague, or uses words with several meanings that leave customers confused.
• The content rambles, is long and hard to follow, and does not focus on solving the customer's problem, so customers lose interest in the business's products and services.
• The content is generic, with nothing unique or different from competitors.

Common misunderstandings about value propositions

Because a value proposition delivers a message and is a bit like a motto, people confuse it with a slogan or tagline. However:

• A value proposition is a commitment about the value and benefits a product or service brings to customers.
• A slogan usually describes the character, promise and core values of the business, and where the product is heading.
• Tagline is a line used to position a product while stressing the company's mission, purpose or character.

However, some businesses use Value Proposition as their slogan or tagline when it fits.

See more: Which strategies help build an online selling brand?

How to create a value proposition

An effective, high-quality value proposition comes from these steps:

1. Identify the problems and needs customers are looking to solve

Use customer behavior and collect customer data to work out what customers want from your products and services. Which problems does the product solve for them? What affects their buying decisions?

So the business needs to run surveys, conduct interviews and call customers. After collecting the information, combine the data to create the value proposition that delivers the most value.

One tip: pay attention to the Keyword – the phrases customers mention most, which help link them to your brand's value proposition.

2. State the benefits clearly

List the benefits of your products and services, then pick the main benefit, the one that speaks to customer needs. Keep it to 2 or 3 sentences: not too long, but still enough to carry the business's purpose.

Answer these questions:

• What products does the business have?
• Who is the target customer?
• What benefits does the product bring to customers?
• What makes the product different and stand out in the market?
• Why would customers use this product and not another?

3. Focus on delivering value to customers

The aim is for customers to feel a strong connection between themselves and the product or service. This usually happens when they come across the benefits the business states. So after making the promise, focus on the specific value of the product or service and on the material and emotional benefits it gives customers,

4. Difference

The last step is to make the value proposition different. It makes customers look for your products and services more, and protects you from competitors in the same industry.

Value proposition case studies

To give good examples of value propositions, a business must understand the needs of its target customers, and what drives them to choose its products instead of a competitor's.

Here are 3 case study from major, world-famous brands:

Apple iPhone

Apple's value proposition is “The Experience IS the Product”, which states its value across the iPhone range. Besides design, Apple cares about usefulness and convenience for users. The statement is clear and has brought Apple outstanding business results. It shows the iPhone is not just a smartphone but a distinctive one with a full set of features.

Uber

Uber's value proposition is “The Smartest Way to Get Around”. Uber has made its ride-booking services stand out and has outdone its rivals in the the market market because it is very effective at applying a value proposition. On Uber's homepage, users can see these strengths listed:

• With just a tap, a car comes to you.
• Your driver knows exactly where to go.
• No cash needed to pay.

Uber has delivered its value in a style of its own. It lets customers travel with more style. You can book on demand, with no long wait and prices lower than traditional taxis.

See more: The most effective competitor analysis process

Slack

Slack is known as an online messaging app. It helps businesses and individuals work more efficiently. Slack's value proposition is “Be More Productive at Work with Less Effort”. Slack's biggest strength is that it makes collaboration simpler. It beats many competing apps with its flexible integrations. This versatility has let Slack take over the workspace and shape how businesses stay productive.

Mona Media hopes that readers now clearly understand what a value proposition is, and how to create a value proposition that brings value to businesses. Thank you for reading, and we wish your business a successful value proposition.