The value proposition is a foundational element of a company's go-to-market strategy. Learn the elements of a good value proposition and the steps for writing one below. We'll also cover how a value proposition differs from a mission statement and provide four compelling and inspiring examples.
Understanding value propositions
A value proposition states the unique appeal of your company's goods or services in a way that is compelling to the target customer.
The elements that contribute to a strong value statement also underpin your marketing strategy. They include:
- Deep understanding of the customer and the customer's needs
- The benefits or features of a product that solve a primary problem for the customer
- Aspects of the product that are unique relative to the competition
Marketing materials don't always use the value proposition verbatim, but taglines, slogans, and artwork should align with it thematically. If marketing content begins to stray, it could mean the value proposition is too limiting or no longer resonates with customers.
How to write a value proposition
Developing a compelling value proposition will require trial and error and user testing. Follow the steps below to craft a statement that effectively captures your product's unique positioning.
- Research competitors. Compile a list of your competitors and their value propositions. You can usually find competitors' value propositions on their websites.
- Research your customers. If you haven't done so already, develop customer personas. Personas are detailed descriptions of customer groups. Personas can describe demographic characteristics, such as age and marital status. However, they should also cover emotional characteristics such as pain points, frustrations, and motivations. Understanding these elements will help you craft a more persuasive value statement.
- List the pros and cons of your product or service. Next, do a comprehensive review of your product relative to competitors. Your value proposition should highlight what makes your offering better than the alternatives. Your product's areas of superiority can relate to the product itself or the way you deliver it.
Also, don't overlook your product's shortcomings relative to competitors. There may be an opportunity to address them head-on or position them as positives rather than negatives. - Write. Value propositions are brief. Limit yourself to a single statement or a few sentences at most. If you're stuck, imagine someone at a cocktail party has asked what you do. Consider your product, customer, and competitors, and then answer that question in three sentences or less. Be open to writing drafts until you develop one that resonates.
- Gather feedback. Share at least three value proposition drafts with others for feedback. Ideally, the draft statements should be tested with internal company stakeholders and prospective customers.
- Rewrite. Incorporate feedback where it makes sense to revise and finalize your value proposition.
- Test visually. As a last step, review how the value proposition will appear on your company website and marketing materials. You may find that it looks too long or too short in certain placements. Adjust accordingly.
Value proposition vs. mission statement
A value proposition is not the same thing as a mission statement. The mission statement describes the company's purpose and values, while the value proposition focuses on why customers should buy the product.
To demonstrate, the e-commerce platform Shopify (NYSE:SHOP) describes its mission as "making commerce better for everyone." By comparison, the company's value proposition -- "the all-in-one commerce platform to start, run, and grow a business" -- describes the product and the problem it solves.
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