What is a value proposition? Definition + examples

What is a value proposition? Definition + examples

Why do people buy your product? It should be obvious right? When you sell food, people buy it because they are planning their next meal. When you sell books, people buy them because they want something to read. When you sell B2B software, customers buy to improve their business processes.

In reality, it’s not that simple. People who are hungry could go to the grocery store or order takeaway. People looking for a new book can go to your bookstore or library. Companies that want to improve processes can buy software or hire a specialist.

Your company, your product, your customer and your price all contribute to your success Value Proposition. Your value prop describes the exact benefit that your product offers. It is also your differentiator.

Definition of the value proposition

The value proposition is a value proposition specified by a company that summarizes how the benefit of the company’s product or service is provided, experienced and acquired. (Corporate Finance Institute)

A value proposition is what you do and how you do it.

Why is a value proposition important?

A value proposition is critical to the success of your business. Here’s why.

A value proposition centers your company

Value propositions define exactly what your company should do. Often times, growing companies can be tempted to change or adapt their vision. A value proposition serves as an investment to keep the company focused on the task at hand.

A value proposition explains your company to your customers

Ultimately, a customer doesn’t care about your marketing spend. They don’t care how many social media posts you post or how many blog posts are on your website. They care about what your product does and whether it meets their needs and meets their expectations. The value proposition is the bridge to your customer with brand awareness.

A unique value proposition sets you apart from your competitors

Your product, value, and price are different from those of your competition. But do your audience know that? With your value proposition, you can describe what makes your offering unique and how it disrupts the market.

How to create a value proposition statement

Value proposition statements are best made when developing your business plan. However, many CMOs may want to make value propositions later to refine and improve marketing programs. You can adjust your value creation as your business grows and changes. Use these steps for new and revised value proposition statements.

Identify the characteristics of your product

Just start: list the products you offer and their useful features. If you are a Software as a Service (SaaS) company, you may have many features that allow users to perform many different tasks. If you’re a restaurant, your products might serve breakfast, lunch, and dinner. You can include great customer service or special events in your offering.

Features can be large or small, many or a few, original or unoriginal. By listing the individual functions, you will get an idea of ​​what exactly you are offering your customers.

Identify the usefulness of each function

Features and benefits are often grouped together, but they vary. Each function should provide an advantage. For example, Uber’s app for requesting a car share is a feature. The driver who will pick you up and take you where you need to go is a perk.

Assign each of your functions to customer benefit. In this exercise you will see which features offer the greatest benefits.

Define your target customer

You have probably done a lot of exercises to understand your target customers. When you clarify their identity, you will better understand their journey to your product.

Immerse yourself deeply in the wishes and needs of your customers

Sure, your customer may want to buy a new software solution because they need a new software solution. But – what do you really need? For example, let’s say you sell financial management software. If your target customer is a finance manager, they may need your solution. What they really need, however, is to set aside some time during the month-end closing. This gives them the time they need to still have one-on-one conversations with team members. They may be looking for a financial solution, but what they are really looking for is time.

Clarify your price

It takes time and research, but you need to understand whether your product is priced below, at, or above the market price. In this way you can see whether your product is a value product, a typical product or a premium product. Their unique value proposition enables customers to understand if they are getting their money’s worth.


Steve Blank (Lean Startup) suggests the following simple phrase for your value proposition. “We help X do Y by doing Z.”

Mapped onto the above framework, it might look more like this:


If you’re offering a low-cost or premium product, make sure that your pricing is well incorporated into your value proposition.

Examples of effective value propositions

These seven digital technology companies each offer a unique product, but they also face fierce competition. Each of these value props describes their target customers, their needs and how they meet them – and sets them apart from their competitors.


Calm is a mobile app based in San Francisco.

Example of a value proposition

Rest helps people who are struggling to relax their sleep, rest, and meditate by providing an app that provides these experiences.


Curology is a bespoke skin care solution based in San Francisco.

Example of a value proposition

Curology helps people in need of skin care by offering bespoke skin care products. This also includes the competitive pricing and delivery mechanism.


Duolingo is a language learning app based in Pittsburgh.

Example of a value proposition

Duolingo teaches second language enthusiasts how to speak a new language by providing an app that makes language teaching fun.

Impossible foods

Impossible is a meat alternatives company based in Redwood City, CA.

Example of a value proposition

Impossible Foods offers health and environmentally conscious consumers the opportunity to eat sustainably by offering a meat product alternative.


Slack is San Francisco-based collaboration software.

Example of a value proposition

Slack enables busy professionals to avoid the use of email by providing a more complete and easy-to-use tool for collaboration and communication.


Zendesk is a SaaS customer support based in San Francisco.

Example of a value proposition

Zendesk gives customer service representatives the ability to manage their operations with one comprehensive software solution.


Setting your value proposition is an exercise that will help everyone. It aligns your internal priorities and communicates your company better with customers.