MarketingSales3 legged stool

What is a Value Proposition?

A value proposition is the collection of reasons why a person or company benefits from buying something.

On the one hand, it’s a fairly simple concept to grasp. But like all simple, important concepts, it takes some thinking to understand it deeply and use it to your advantage. To understand it better let’s first look at a definition of a value proposition, and then look at the three major components that comprise it so you can put it to work for you.

From Investopedia:

What Does Value Proposition Mean? “A value proposition in marketing is a concise statement of the benefits that a company is delivering to customers who buy its products or services. It serves as a declaration of intent, both inside the company and in the marketplace.”


Investopedia explains further: Companies use this statement to target customers who will benefit most from using the company’s products, and this helps maintain an economic moat. The ideal value proposition is concise and appeals to the customer’s strongest decision-making drivers. Companies pay a high price when customers lose sight of the company’s value proposition.


How to Build a Powerful One

If you think of a value proposition not as a statement, but as a concept about why people buy something, then you’ve got a lot more to work with. It’s from that concept (the collection of reasons why people would want to buy from you) that you can put your marketing and sales to work much more effectively than if you try to boil it down so far that there’s little substance left.


The reasons why people buy typically act as the legs of your marketing tripod.  Those three rules of winning value propositions are:


  1. Potential buyers have to need or want for what you’re selling. It has to resonate with them.
  2. Potential buyers have to see why you stand out from the other available options. You have to differentiate.
  3. Potential buyers have to believe that you can deliver on your promises. You have to substantiate.


You must have ALL THREE components working together. Like a tripod with 2 legs, take any of the rules away and it makes it much more difficult to sell.

  • Remove resonance, and people just won’t feel the need for what you’re selling.
  • Remove differentiation, and they’ll pressure your price or attempt to get your service someplace else.
  • Remove your ability to substantiate your claims, and while clients may want what you sell (you resonate), and may perceive you to be the only people on the planet that do what you do (you differentiate), they don’t believe you and won’t risk working with you.


If you want to want a strong value proposition that makes people want to do business with you, you need to do much more than write a short fancy sentence…or even a long sentence. While you can sum it up, the summary itself doesn’t carry much weight. Your actual value proposition needs to be woven into the DNA of your business and your relationships with customers. Only then can you start to communicate it to the market through your advertising/marketing.


For help in designing and building your value proposition book a strategy review session HERE and we can start (or re-start) you on a path to more and better quality customers.


Andy Burrows  –  The Trades Coach