Value Proposition

Value Proposition

On their journey towards success, many entrepreneurs can easily lose the track if they can’t truly include a persuasive value proposition in their product or service. But what actually means when we are talking about value proposition?

In its simplest way of explanation, a value proposition is a standing declaration that explains what benefit (value) you provide (propose) for whom and how are you going to do it uniquely better than existing competitors. It describes your target customers, the problem(s) you solve, and why you’re specifically better than the alternative solutions.

For the first time, Michael Lanning invented the term “value proposition” in the 80s and since then, it has become a fundamental part of marketing plans. There is tremendous number of books and articles explaining what value proposition is and how to use it including Lanning’s own book: “Delivering Profitable Value: A Revolutionary Framework to Accelerate Growth, Generate Wealth, and Rediscover the Heart of Business”.


As Michael Lanning explains, value proposition:

  • Should drive your message but not like your exact selling line or slogan. It should be an internally resonated expression of your message or motto.
  • Should focus on the very specific and quantifiable experiences that customers will develop when engaging with your business.
    Contrary to how things may seem, customers don’t really care about your product. They care about their lives or businesses; they care about what they may or may not get out of using your products or services. So, what matters and what must be at the heart of a real value proposition is those customers’ resulting experiences that happen because they buy [or] use your stuff rather than some other option. ___ Michael Lanning
  • Not only your messaging, marketing and sales but also it should reflect on and be inspired by your entire business.

Watch a short video explaining the value proposition canvas tool:

What should be addressed in value proposition?

A value proposition is a strategic document that communicates the real purpose for your business. It is crucial that your value proposition can answer the following five questions clearly:

  1. Who are the target customers? A market research including statistics, demographics, key user behaviour, how they currently resolve the problem or need, what makes them your target customer and so on.
  2. What is the timeframe? If your value proposition seems to be credible now, also in 10 years from now and even further, it is a sign that you have a vague document! Considering the advancements in technology, market, user behaviour and so on, you will need a value proposition for now and another for later which adopts the future situation. At least you need to be aware of that.

    A strong value proposition makes you think through what the customer gets and will conclude at the end of the day. It is a strategic decision, and among all functions in the business, there must be consensus around it. ___ Michael Lanning
  3. What do you want these target customers to do? Do you want them to buy your product or service? Use your product or service in a new or particular way? Sell your product or service to their customer (B2B)? Use it to make another product? Be as specific as you can about what are your expectation of customers. If they may need to adopt new behaviours or change the existing process.
  4. What are competing alternatives? What happens if the customers take other action than what you expected or use the competitor solutions?
  5. What resulting experiences will customers derive by doing what you want, compared to their alternatives? Would it improve their business, increase their sales, save time or operating costs? How your proposed value is affecting customers’ lives? By saving money, entertaining them, saving their time or improving their health?



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