The Value Proposition
Unlike the value chain, which is an internal function that focuses on operations, the value proposition is the external messaging that communicates what the product has to offer to the customer. Customers are always interested in the benefits a product or service will provide for them. They will be asking, "what's in it for me?". The answer to this question gives the consumer a reason to buy one product over another. When a company understands what is important to their customer, no matter where they are in the world, it can better formulate messaging that will be meaningful. An effective value proposition will be clear and concise, persuasive, and will differentiate the product from the competition. Consider the value propositions from Target – "Expect More, Pay Less" – and Walmart – "Save Money, Live Better". While they convey similar messages, the differences are evident but no less meaningful and effective. This section will explore the intricacies of the value proposition and how companies can formulate effective messages for their international marketplaces.
How Do You Create an Effective Value Proposition?
- Clear: short and direct; immediately identifies both the offering and the value or benefit.
- Compelling: conveys the benefit in a way that motivates the buyer to act.
- Differentiating: sets the offering apart or differentiates it from other offerings.
Here are some examples of value propositions from company websites:
- "Soundtrack your life" (Spotify)
- "Small Business Accounting Software Designed for You, the Non-Accountant" (FreshBooks)
- "Remember Everything" (Evernote)
- "That Horizon Might Be Closer Than You Think" (Mint)
- "Rides in Minutes" (Lyft)
- "Shorten. Share. Measure." (Bitly)