What is your value proposition?

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By: Neil Edwards on 1st December 2013, 5 minute read

Following hot on the heels of the different or better debate, which we kicked off last month, it is now time to think about your value proposition.

Your value proposition is the reason why your customers choose your business over another: it solves their problem or satisfies a need. Some value propositions may be innovative and represent a new or disruptive offer.  Others can be similar to what already exists in the market, but with added features and benefits.

To determine your value proposition, you need to ask yourself some searching questions:

  1. What value do you really deliver to your customers?
  2. Which of your customers' problems are you helping to solve?
  3. What job are you helping your customers to get done?
  4. What needs are you satisfying?

Customers see value in a wide range of attributes, be they quantitative (e.g. price and speed) or qualitative (e.g. design and customer service).

Here are a few things that customers are willing to pay for.  Which of them combine to make up your value proposition?


Some value propositions satisfy an entirely new set of needs that didn't exist before.  We often see this in the technology world (did we ever know that we needed mobile phones this much?!).  More recently, we have seen it with the growth of crowdfunding and alternative finance as the banks' ability to lend has been constrained.


Faster or more reliable performance is a common way to create value.  Technology relies on this to keep us buying the latest model.  Can you deliver your service faster or more reliably than your competitors?


Tailoring products and services to a customer's specific needs creates value as there is a sense of the solution being perfectly suited to their needs and problems.  In recent years, the concept of mass customisation has gathered pace with co-creation gaining importance.  This is where a customer (or user) can tailor how a product works or looks to meet their own requirements.

Getting the job done

Very often, people will pay to move a task that they are not skilled in, but know they need, off their desk.  This is the classic stimulus for outsourcing.  The arrangement allows customers to focus on their core business activity without having to build and pay for their own function in-house.


Design is increasingly important, both in personal life and business.  People will pay extra for something because it looks or feels beautiful, or because it works particularly well.  Apple has built its business by paying as much attention to design as it does to the core function of its products.


Admit it, we all do it - paying that little bit extra for the right logo because of the way it makes us feel about ourselves.


Offering a similar product at a lower price is a common way to create competitive advantage.  Often looked down on as a strategy, many low-cost airlines have built extremely successful businesses by unashamedly under-cutting the market and offering flights for the lowest possible price.  In other markets, free is becoming the new normal: free newspapers, free social media platforms - these rely on making money elsewhere in the value chain by leveraging the value of their readership or users.

Cost reduction

Helping customers to reduce their costs is an important way to create value.  Closely aligned to outsourcing and getting the job done, more recent examples include the rise of cloud computing, which relieves buyers of the need to buy and maintain software themselves.

Risk reduction

Customers value reducing the risks they incur in life or a specific purchase.  Insurance is the obvious expression of a value proposition that is centred on risk reduction.  Other businesses can introduce risk reduction into their value propositions by offering money-back guarantees and service level agreements.

Convenience and accessibility

In an increasingly fast paced world, life is all about wanting to be able to run our lives and our businesses anytime, anyplace, anywhere (Martini anybody?).  The more convenient and accessible you can make your product or service, the more value will be ascribed to it.  Providing your services online, offering an out-of-hours support service, being on-site are all ways of offering more convenience and accessibility than your competitors.

So, what is the bundle of benefits that creates value for your customers?  Do you understand them and do you properly represent them in all aspects of your marketing?  If the answer is no, give yourself time out to think about it; do some research if necessary: it's important.

With thanks to the Business Model Foundry for its research into the value proposition attributes

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Neil Edwards


Neil Edwards

Neil is a Chartered Marketer and Fellow of the Chartered Institute of Marketing with many years' experience in marketing, brand and communications.

CEO / The Marketing Eye

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