Crafting a killer value proposition statement


Think of an organisation that has a stellar reputation for elegantly solving customer problems. Now think of one that struggles to solve customer problems. The former tends to grow and satisfy markets. The latter usually doesn't survive long.

One major difference between the two is often the strength of their value propositions.

A value proposition is a statement about the value that your product, service, or innovation provides to a target customer. The concept has existed since the dawn of commerce, but the term value proposition really came into vogue in the late 1980s. Properly adopted, the value proposition can be a great catalyst for customer-focused innovation.

In concrete terms, a value proposition describes the problem your offering will solve, generally how it will solve it, why your target customer should use it, and why it is distinct from alternative options. It should be constructed in a way that convinces a target audience to take action with your offering (see the sidebar, "Formula to Create a Strong Value Proposition," below).

Operating with a strong value proposition can significantly enhance your ability to capture market share and growth while maintaining laser focus as a business. Conversely, the absence of a value proposition could increase the likelihood of a mismatch between your offering and your target audience, thus veering you off course.

Constructing a strong value proposition can be hard, especially when fast-moving market forces threaten to erode the efficacy and relevancy of your value proposition. Therefore, two fundamental questions arise: What components must be considered for a value proposition? And how might one create a strong value proposition?

Components of a strong value proposition

A strong value proposition can be summed in an acronym: TRUE. Your value proposition must be true for it to work.


The problem you are solving must be testable. First-hand observations, surveys, focus groups, or personal experiences with the problem make it testable. These empirical data help you to better understand the nuances of the problem and the potential value of solving it.

Your offering must also be testable. For example, if your offering saves time or money, you must be able to demonstrate this to be true. Testing your solution does not stop with just proving it works. As customers use your offering, you must continuously test for its validity, relevancy, affordability, and general satisfaction of the customer. Is it actually solving their problem? These data points give you important intelligence to help further refine your offering and tighten the value proposition.

Take Thumbtack. Thumbtack is a company that connects consumers with local, qualified service providers. The founders of Thumbtack noticed a big problem: For busy working professionals and parents, the effort and time to find, vet, and schedule professional service providers such as plumbers, painters, or even belly dancers can be frustrating and time-consuming. The problem is testable and observable by anyone who has ever scheduled those services. Moreover, Thumbtack conducted surveys and focus groups to better understand consumers' specific pain points.

Thumbtack's solution is to be the intermediary between providers and consumers. It demonstrates this by facilitating price quotes, scheduling, and communications between consumers in need of painting, repair work, etc., and local providers of the services. This too is testable by measuring the response rates and general satisfaction of both consumers and providers.


The problem that your offering addresses must be real. While it's nice to solve a problem for one customer, your business's growth is likely anchored to solving problems for many customers. Consider the size of the problem you seek to solve, the number of potential customers, and whether the customer considers the problem significant enough to warrant a fix.

Your offering must also be real. It must actually do something to address the customer's problem. It must be accessible to them, solve an actual problem, make a particular task easier or more convenient, or generally make their lives better.

For example, modern-day firefighters deal with high-intensity heat for extended periods during fire and rescue calls. They need apparel that allows full mobility while providing exceptional thermal protection and durability. The problem is real as it is experienced by a large global market of firefighting professionals. It is also significant in that firefighters are trained to help those in need while also protecting themselves from danger. In response, DuPont developed several pieces of wearable gear that protect firefighters from the dangers of high-intensity fires.

DuPont's offering is demonstrably real as it actually helps make firefighters' jobs easier and safer.


Your offering should be distinct and unique from alternative solutions. It should provide a unique experience or be more accessible, cheaper, faster, better, etc., than alternatives. One or more unique characteristics of your offering will help establish and sustain a competitive advantage and potentially make your offering more attractive to potential customers.

For example, Tesla Inc. offers a portfolio of all-electric vehicles. Tesla cars provide a unique driving and ownership experience compared to other electric, hybrid, or petrol-powered cars. They generally have a long range by electric vehicle standards, are considered by some to be more stylish than competitors' offerings, and have inspired legions of Tesla followers, resulting in a unique culture amongst owners. Additionally, Tesla cars are equipped with sophisticated hardware whose performance characteristics are continuously modified through automatic software updates. Although the vehicles are not priced cheaper, each characteristic makes for a unique experience compared to Tesla's competition.


Finally, your offering must be essential in the eyes of a target customer. To be essential, your offering should be so clear and obvious that buying it is compelling, urgent, time-sensitive, and generally the path of least resistance for the target customer.

Parents of newborn babies, for instance, are thrust into a frequent and continuous cycle of nappy changes. In the interest of cleanliness, hygiene, and cuddliness, nappies are a simple necessity. For most parents, buying either cloth or disposable nappies is compelling, time-sensitive, and the path of least resistance for dealing with babies' surprises.

Mark S. Brooks is the senior manager of innovation at the Association of International Certified Professional Accountants, where he is focused on strategic innovation, thought leadership, growth of the profession, and member value.

Formula to create a strong value proposition
After you identify the fundamental components of your value proposition, you can then articulate it. Consider this template, adapted from Crossing the Chasm, by Geoffrey Moore.

For [target customer]
who [quantified statement of need]
the [name of your offering] is a [category/type of solution]
that [statement of solution].
Unlike [leading alternate solution], [name of your offering] is [statement of distinction].

Let's see this template in action with Uber, the ride-hailing company:

For travelling adults
who need low-cost, on-demand ground transportation,
Uber is a transportation network
that conveniently eliminates the frustrations of travel.
Unlike taxis, Uber is easier to order and requires no physical transactions to book or pay for the ride.

The above tenets are valid and useful for constructing a value proposition for a whole company, product line, team, or individual contributor. When framed with the customer in mind, a strong value proposition can compel action from your target customer and help you maintain customer-focused innovation.

Those who seek to create a strong value proposition should plan to frequently assess its precision and fit. As the needs and preferences of your target customers change, so too will your competition's value proposition. Ongoing pivots and tweaks may be necessary.

Source: FM Magazine