What Is a Customer Value Proposition? (With Examples)

By Indeed Editorial Team

Published May 22, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A major component of business is convincing potential customers that the products or services offered are of value. Understanding value propositions is important to succeed in sales. By learning how to develop a value proposition yourself, you gain a deeper understanding of how and why customers make purchases. In this article, we define customer value proposition, explain the basics of a strong proposition, review the components of propositions, give advice for creating your own, and show examples to help guide your process.

What is a customer value proposition?

A customer value proposition is a statement that conveys the value of an offering to a customer. These propositions are quick summaries that explain why a customer might choose the good or service a team is offering compared to competing products. A value proposition is an important part of the marketing process, as it represents the core reason a person might make a particular choice. A strong value proposition sells products and can help a team further develop effective marketing materials.

Related: Developing a Sustainable Sales Process to Close Deals Faster

What makes a strong value proposition?

A strong value proposition comprises the following three interrelated parts:

Quantifying value

Quantifying a product or service's value means emphasizing traits of the offer that help define its worth in easy-to-understand objective terms. For example, a value proposition might note that a company's offering is of a better price than similar offerings. This is an objective and verifiable fact that most people view as a positive. The traits that are best to emphasize usually depend on the offering. For example, a more expensive product may have traits that justify the cost. A proposition designed to sell a moderately more expensive car may highlight its much better fuel efficiency.

Generally, a team selling a product or service that is expensive or facing heavy competition works to quantify its value. In the above example of cars, fuel efficiency alone may not sufficiently sell consumers on the product. A team can work with engineers and marketers to determine other ways to emphasize a product's value. They might discuss lifespan, horsepower, financing options, and average repair costs. Sales representatives can choose which positive traits to emphasize best fit the situation.

Differentiating the offer

Often combined with discussing traits that quantify value, such as price, it's also important to differentiate an offer from the competition. Products and services are in constant competition for consumer attention, especially online. The best way to differentiate depends on one's target demographic. Some consumers may value colour, price point, or prestige as a differentiator. If a sales team is unsure what their customers value, it's a good idea to first identify it.

The more competition a company faces, the more important it's to differentiate. For example, imagine two products in the market with similar features. In this scenario, differentiation may not be very important, as consumers can usually remember two different options. If you instead imagine thirty or more products with similar features, which is not unusual in many industries, differentiation becomes very important. If a business doesn't emphasize what makes its offer unique, consumers are likely to forget that individual product among all the other options.

Making the offer relevant

Different consumers have different priorities. Even consumers in the same demographic are likely to have nuances that make each individual unique. Most successful sales begin by first establishing how an offer fits into that consumer's priorities. Some products and services may meet particular needs, such as medicine or food. Others may instead provide comfort or prestige, such as furniture or jewellery. When trying to sell a product or service, it's often good for a sales team to think about why their target demographic might care about the offer.

A good offer isn't enough to make it relevant. For example, a walker at an excellent price point still isn't relevant to most young adults. While a small minority of young adults use mobility aids, the offer is mostly irrelevant to that demographic, regardless of price. It's usually best to approach marketing from a target demographic first perspective. A company first identifies who is most likely to have an interest in an offer. Then, they shape their value proposition to show that demographic how the offer applies to their needs.

Parts of a value proposition

A value proposition describes a product in several parts to show the customer its value. This helps convey the information you want a potential customer to know in an easy-to-understand way that flows well. The most common sections of a value proposition include:

  • Headline: The first line of the value proposition catches the audience's attention and expresses the benefit of a product. On a website, this line is usually a larger type and it may be a phrase or a fragment rather than a complete sentence.

  • Explanation: This can be just a sentence following the headline or a two to three-sentence paragraph. Here, you can explain who a product is for and why it's useful.

  • Bullet points: This is an optional section you can include to draw customer attention and emphasize specific benefits with a list of a few other features of a product.

  • Visual component: This is an optional section you can include if you're presenting a value proposition online and want to include a photo that helps explain the product. If you sell physical items, you might even use original graphics to draw attention and avoid using stock photos.

Related: 10 Sales Associate Skills and How to Improve Them

Tips for creating a value proposition

Here are some tips for making your own value propositions:

Write clearly and honestly

Your value proposition is clear enough for the customers to understand it more easily. Instead of business buzzwords and industry jargon, use accessible language and clear phrasing. Describe aspects of a product rather than making any quality claims. This is another area where market research can be useful, as it can show a team what their target demographic values most in an offer.

Understand your market

A value proposition only aims to appeal to the customers you're selling to, not to every potential customer. This means your proposition can focus on distinguishing the company from other businesses its customers might be considering and ignore businesses out of range. If you're working for a local business, your value proposition might emphasize the company's commitment to the community and the advantages that other nearby businesses don't offer. If you're selling something commonly available, maybe the experience of buying from the company or the ability to pick up its product locally can appeal most to its customers.

Display your value proposition prominently

Your value proposition can be the perfect tool to communicate a business' purpose to its website visitors. To make it as effective as possible, include it on your employer's website anywhere first-time visitors might enter the site, like a contact form, home page, and landing page. This helps immediately establish the value of what the company can offer and encourages a visitor to seek more information.

Distinguish it from a slogan or positioning statement

The slogan creates brand identity and tone, while a positioning statement shows your employer's value within the industry. A value proposition involves building a brand and distinguishing a company from others in the industry, yet it can be more specific about products, as its audience is a sales lead.

Include other phrases that also boost value

As you are designing a landing page or advertisement that displays your value proposition, consider including other phrases or locations. These new remarks may demonstrate other aspects of the value your employing company provides. For example, you can mention positive benefits and options like customization services, free shipping, gifts, discounts, and guarantees.

Test your value proposition

A good way to maximize the sales you can make from your value proposition is to test and collect data on its effectiveness. One method for testing a value proposition is A/B testing, which refers to how the process involves making testing two versions of your value proposition. Then you measure the sales, clicks, or lead counts, which result from each to see which brings in more customers. You might also use different value propositions to create ads and measure the response to each.

Related: How to Do Market Research With 6 Guided Steps (With Types)

Value proposition examples

Here are some examples of value propositions:

Example 1

100 Bean Street is a new coffee shop with a focus on customization, mobile ordering, and delivery. It develops this value proposition for its app and website:

Your coffee, closer.

100 Bean Street is making it easier for you to get your favourite coffee in the Montmarte neighbourhood. As we open this flagship store, the team commits to getting each order exactly right, with a staff of expert baristas and the most ways to bean and brew within fifty miles!

  • Ready within 10 minutes

  • Delivery to your door

  • Right or free guarantee

Example 2

Lit Works has been an industrial lighting installer for 30 years. It develops this new value proposition for a rebranding:

Lighting for the long term.

Customers in the tri-state area have trusted Lit Works to build and maintain comprehensive and sustainable lighting solutions in their businesses, plants, and warehouses for 30 years. Lit Works designers and technicians create electrical solutions that work for your budget, your workforce, and the environment.

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