• Value Proposition:What is It, How It Works, And Why You Should Pay Attention to It 

    According to marketing giant Hubspot, 64% of businesses have “established value propositions”.

    Done correctly, a value proposition can give your business a huge advantage over your competitors. But, here’s the problem:

    Very few businesses have an effective value proposition. As a matter of fact, recent studies confirm: “only 2.2% of companies have useful value propositions.”

    This is a huge problem because an ineffective value proposition can make your ideal customers turn to your competitors simply because they don’t immediately understand that you offer what they need.

    Furthermore, it’s extremely challenging to distill your company’s services down into one concise sentence. That’s why in this article, we’ll cover what you need to know to develop a highly effective value proposition.

    What is a value proposition?

    In its most basic form, a value proposition is a summary of how your product or service benefits your customers.

    Typically, it answers the question:

     “What do you do?”

    Also, you can use value propositions in different parts of your overall marketing strategy. However, many brands make it the focus of their website’s home page.

    But beyond that, it presents the most compelling reasons why a prospective buyer should become a customer and highlights a benefit or feature that sets you apart from every other company in the market.

    Value propositions normally include a block of text (such as a headline, sub-headline and one paragraph of text) with a visual (like a photo, video, or graphics).

    Here’s a more vivid example from PandaDoc:

    Crafting effective value propositions may sound straightforward but the process can be challenging because they need to be distinct, concise and interesting. They also need to be user-centric, which means focusing on what users need as opposed to what you offer.

    As you write your value proposition, think about what you’d want to say if you were sitting across the table from a prospect, having an informal conversation. Never try to impress a potential customer with a language they don’t use. You’ll lose their attention – and likely their business, too.

    And you know what else?

    A value proposition is not:

    • An incentive: The word ‘incentive’ is defined as a ‘positive motivational influence’ designed to incentivize a visitor to act right away. Incentives are not value propositions, but often brands confuse them.
    • A catchphrase: A slogan or tagline is “a catchphrase or small group of words that are combined in a special way to identify a product or company.” Slogans are not value propositions, but many brands conflate the two.
    • It’s not a positioning statement: A positioning statement is an expression of how a given product, service or brand fills a particular consumer need in a way that its competitors don’t. A positioning statement is a subset of a value proposition, but it’s not the same thing.

    Why is it important to have a strong value proposition?

    Academic publications that mention value propositions in their abstracts.
    Source: EBSCO business source complete database

    Identifying your unique value proposition compared to your competitors is the main pillar that establishes your success in both marketing and sales.  

    Additionally, an effective value proposition clearly articulates why a prospective customer should buy from your company instead of a competitor. And as soon as they arrive on your website, your value proposition tells them everything you offer quickly, while you have their attention.

    Some of the benefits you can expect when you create a clear, compelling value proposition for your brand

    • Potential customers can quickly understand what your company has to offer: Most customers already know what they’re looking for when they research online. So, if it’s not immediately clear that your company can meet their needs, they’ll likely look elsewhere.
    • Creates a strong differential between you and your competitors: Almost regardless of what you do, you have competitors. An effective value proposition tells the ideal customer why they should buy from you and not from the competition. In other words, it provides your company with a unique differentiation.
    • Attracts the right prospects and increases not only the quantity but the quality of prospective leads: A company’s value proposition targets your company’s ideal customer and explains why your solution is the best option. This increases your chances of attracting the right prospects for your business and finding higher quality leads that are more likely to convert to customers.
    • Improves customer understanding and engagement: A powerful value proposition helps your customers truly understand the value of your company’s products and services. It also helps your ideal customers to see how your services benefit them and are their best available option. With this increased understanding, customers are more likely to become engaged with the services or products you offer.
    • Provides clarity of messaging: A strong value proposition makes it immediately clear to your customers what you offer. Additionally, it also makes sure to communicate your message clearly on all the main entry pages. These include your home page, product pages, and category pages.

    Things to consider, research or compile before you start creating your value proposition

    1. What you offer

    Or simply put a specific explanation of your products or services.

    Make sure you take into account the point of view of your target audience and explain your services in a way that will appeal to them.

     On top of that, don’t forget wording matters!

    Even if you offer exactly what they’re looking for, if it isn’t worded in a way that makes that clear, potential customers will look elsewhere.

    Actually, think about your target customers and their needs, and make sure your value proposition addresses their needs as closely as possible. Take into account what your customers are looking for and how they phrase their needs, and incorporate this phrasing into your proposition.

    What’s more: “Keep the focus on your audience benefits”

    Make sure the focus is on how your services will benefit your audience. Include specific numbers or statistics if possible.

    For example, have your customers seen an average percent increase in revenue? Do they save a certain number of hours per week? Have they reported an increase in performance since starting to use your services?

    2. Who you serve

    Before you start writing your value proposition you will want to be perfectly clear on who your target audience is.

    To accomplish this, research your audience to understand who they are and what they look for in products or services like yours.

    You’ll want to have answers to the following questions:

    • Who are they (demographic data) and what they do (interests, careers)?
    • What are their values?
    • What are their needs or pain points?
    • What challenges did they experience before working with your business?
    • What motivated them to search for what you offer?
    • Was there anything about your particular brand that showed that you catered to their needs?

    After gathering your data, use this information to develop an ideal customer persona that you can tailor your value proposition to.

    3. What differentiates you from your competitors

    It’s essential that your value proposition includes a unique selling point or feature that sets your company apart.

    Let’s face it, you probably have competitors offering similar products or services. And many of your potential customers will compare their options, so you will need to convince them that you are different and better than all the other competitors.

    Even if you already have an idea of your differentiating factors, it’s a good idea to spend some time doing some competitor research. The best way to go about doing this is by checking out their sites and examining their marketing campaigns.

    Essentials of AB Testing

    Then ask yourself the following questions:

    • What are your competitors lacking?
    • What do you do better?
    • Why do these differences matter to your customers?

    Once you have clear answers to these questions, you can begin to write a more effective value proposition.

    Value proposition that causes dissatisfaction

    A value proposition is about finding the unique value your business offers to its customers compared to other competitors in the marketplace. The value proposition you offer must resonate with your customers.

    A 2017 study published in the Industrial Marketing Management studies the challenge of communicating reciprocal value promises. The authors focus on issues of dissatisfaction and service failures due to the misalignment between the seller’s value proposition and buyer’s desired value.

    Bottom line, make sure that your value proposition resonate well with your customers and that you are able to deliver on it!

    Effective value propositions and their potential impact on conversions

    A good value proposition can make all the difference in your sales conversions. It can have a significant impact on conversions, and as a result, revenue.

    Similarly, a weak value proposition can result in poor sales.

    Consider this case study:

    One of our partners who is a well-known educator, publisher and distributor of technical books wanted to maintain their community around their books and content.

    There were three main issues that we noticed on their website:

    1. High pre-product page abandonment rate.
    2. Low customer retention rate.
    3. Lack of community around the content.

    One of the things our partner did in order to establish a community was to offer a free book alongside the print version to establish the community.

    The issue is that they added text below their homepage banner which wasn’t necessary. When you have a strong value proposition and a strong headline, there is no need to add extra text to explain that.

    So, we came up with the hypothesis:

    Enhancing Value Proposition through copy to match your visitors’ expectation will lead to increased conversions.

    The first variation we did was that we changed the banner color background as well as the wording from “DRM-Free eBooks” to The E-Book Advantage”.  The text below the banner was expunged because we thought that the banner was self-explanatory.  We also changed the image to reflect what is going on.

    The second variation we did was to maintain the same design but change the wordings in the banner to “Take Your Books Wherever You Go”.

    The results were astounding:

    The first variation was the winner and resulted in 26% increase in conversions.

    However, when conducted a poll and asked the webinar attendees to choose the better of the two variations, 80% chose the second Version.

    From this, we learn that the changes needed to increase conversions may not be so obvious and need real data testing.

    So, what makes an effective value proposition?

    1. Summarizes what your company does in one sentence: However, for maximum effectiveness and articulate what your company does in a single sentence, your value proposition needs to be both clear and instantly credible.
    2. It is specific about the benefits of your customers’ experience: A good value proposition comes with specificity. It needs to be as specific as possible about the benefits your products and services provide to your customers.
    3. It shows how you solve a specific problem or address a specific need: Your value proposition needs to be clear on what problem or need you are addressing, and also demonstrate how you solve this problem.
    4. It explains why customers choose you over your competitors: To be effective, a value proposition needs to be written with your ideal customer or buyer persona in mind. It needs to clearly and compellingly explain why the customers should choose you instead of your competitors.
    5.  It doesn’t include hyperbolic claims (ex. “Best email marketing software in the world!”): The trouble with hyperbolic claims is that there is no way to prove them and because of this any one of your competitors can say the same thing. Think about your current value proposition and ask if any of your competitors can make the same claim. If the answer is yes, then you don’t have a good value proposition.
    Now, it’s your turn. Take a good hard look at your current value proposition and ask yourself the following questions:
    Is your value proposition clear? Do you even have one? Does it keep the customer in focus?

    And then use the three-step process below to craft a winning value proposition and test it against your current proposition.

    How to craft a compelling value proposition

    Here are a few tips for turning the basic facts you’ve compiled into a clear, compelling value proposition. But note: The value proposition that works best for your business depends on your brand and audience.

    1. Aim for simplicity

    Many businesses make the mistake of using vague language that all of their competitors are using, like “results-driven solutions” or “industry-leading software”. Phrases like these don’t really tell the customer anything and make you seem like everyone else in the industry.

    So, what should you use instead?Simple. Aim for simplicity!

    When crafting your value proposition, use straightforward language, be clear on what you are offering and avoid industry jargon at all costs. This will make it easy to understand your products and services and will make you more distinctive.

    2. Make it memorable

    Most of your potential customers will read several other companies’ value propositions in the course of their research.

    That’s why it’s extremely important for you to make sure they remember yours (and your company’s) by incorporating unique language, even if it’s just one word.

    To figure out what makes your company memorable, conduct research on your competitors to see what they are offering. You can then focus on highlighting the features or benefits you offer (that your competitors don’t), which is a great way to stick out in your audience’s minds.

    3. Focus on value

    As the name implies, your value proposition needs to convey the value of what you’re offering potential customers.

    Although your differentiating factors may be features like great customer service or a user-friendly interface, it’s important to also highlight how your business helps customers achieve a specific goal.

    Testing your value proposition

    After you have conducted customer research and written your proposition, it’s time to test it. This is a step you really don’t want to skip, but it is often overlooked by marketers.

    Get this, 54% of marketers do nothing to optimize their value propositions. Testing yours is an easy way to be more effective than roughly half of your competitors.

    So, how do you go about testing your value proposition?

    Here are some important guidelines

    Make sure it meets a few basic criteria:

    You want to make sure your value proposition clearly states what your product or service is, and who can benefit from using it.

    It’s also extremely important to ask yourself the following question: If placed side-by-side with your biggest competitor’s value proposition, is it clear why a potential customer should choose your business?

    Your value proposition needs to set you apart from other companies and to make it clear what benefits you offer that your competitors do not.

    Test it with an unbiased reader

    When you test out your value proposition, you will want to include unbiased readers. Because many marketers make the mistake of only including people who are already familiar with their business in the process.

    3M Results

    The trouble is that they have likely already formulated their opinions on your brand, which makes them biased readers.

    Instead of relying on people who are already customers or aware of your business, ask people who are unfamiliar with your brand to read your value proposition. Ask them what their impressions are, if they are clear on what the product is, and what the benefits are to the ideal customer.

    Consider running A/B Tests

    A/B testing is another way to test out the effectiveness of your value proposition. Ideally, A/B testing is a way of comparing two web pages to see which one performs better.

    The advantage of running these tests is that it allows you to make changes to your web pages while gathering data on how they perform.

    In the case of value propositions, you will want to run tests on your homepage or landing page so you can see which version generates the most engagement and conversions.

    Four examples of value propositions that convert

    The more I surfed the web looking for one, the more I was convinced that it is very difficult to come up with a memorable value proposition! Although not perfect, below are four examples of value propositions that are successful in converting leads to customers.

    1. LastPass

    Last Pass value proposition reads as follows:

     “Simplify your life. LastPass remembers all your passwords, so you don’t have to.”

    This proposition focuses on the clear benefit of simplicity and making the customer’s life easier.

    It then goes on to explain exactly how it delivers that simplicity, by remembering all your passwords for you.

    It is also specific about what the company does, and how its service benefits its customers, both of which are important components of effective value propositions.

    2. Lightshot

    LightShot value proposition states:

    “The fastest way to take a customizable screenshot.”

    The main strength of this value proposition is it is clear and concise. Even if a visitor had never heard of Lightshot, it’s immediately clear what they offer.

    Also, their emphasis on how convenient and easy it is to use their service helps them to stand out from their competitors.

    3. Peet Rivko

    Peet Rivko goes with the following value proposition:

    “Peet Rivko is a line of plant-based products for sensitive skin.”

    This value proposition is very clearly geared towards a specific target audience, who are environmentally conscious people with specific skincare needs. These are people looking for natural products that are gentle and hypoallergenic.

    It is evident from reading Peet Rivko value proposition who their audience is and how their products are catered to a specific target customer.

    4. Duolingo

    Duolingo presents us with another effective value proposition:

    “Learn a language for free. Forever.”

    The word “free” grabs readers’ attention and explains what the users can expect to gain. The benefits are clear, as Duolingo will provide language instruction for free, which is likely to appeal to language learners without a lot of money to spend on classes or tutoring.

    This value proposition also sets Duolingo apart from other companies that provide language instruction with a fee, since they promise unlimited free lessons.

    Final Thoughts

    Value propositions have enormous potential to help your business attract customers, but only when they are written effectively.

    This is far easier said than done, as developing a value proposition can be extremely challenging.

    In this article, we’ve highlighted some key practices that can help your company write or improve a value proposition, as well as some strategies for testing its effectiveness. In short, you want to keep the language clear and concise, to target your ideal customer and to make it clear what sets you apart from the competition.

    If you follow these guidelines, you have a much better chance of developing a value proposition that is effective and helps you to convert more leads into customers.

Ayat Shukairy

My name is Ayat Shukairy, and I’m a co-founder and CCO at Invesp. Here’s a little more about me: At the very beginning of my career, I worked on countless high-profile e-commerce projects, helping diverse organizations optimize website copy. I realized, that although the copy was great and was generating more foot traffic, many of the sites performed poorly because of usability and design issues.

View All Posts By Ayat Shukairy
Ayat Shukairy

Join 25,000+ Marketing Professionals

If you enjoyed this post, please consider subscribing to the Invesp blog feed to have future articles delivered to your feed reader. or,receive weekly updates by email: