What is a value proposition?
A value proposition is a concise marketing statement that explains why a customer should choose a product or service. It clarifies the specific benefits delivered, how the offering meets a need, and what differentiates it from competitors. A clear value proposition helps attract customers, guide messaging, and sustain a company’s competitive advantage.
Key takeaways
- A value proposition communicates the primary reason a customer should choose a company’s product or service.
- It highlights both tangible and intangible benefits and should be short, memorable, and easy to understand.
- Most value propositions consist of a strong headline, a brief subheadline that expands on benefits, and supporting elements such as bullet points or visuals.
- Market research helps ensure the message resonates with the intended audience.
- A weak or unclear value proposition can reduce customer interest, harm profitability, and erode market position.
How value propositions drive business success
A value proposition is effectively a promise to a target customer or market segment: it states how a product or service solves a problem or improves a situation, and why it does so better than alternatives. By clearly defining the audience and the unique benefits offered, companies can:
Explore More Resources
- Attract customers who gain the most value from the offering.
- Differentiate from competitors and build an economic moat (a sustainable competitive advantage).
- Focus marketing and product development on the outcomes that matter most to customers.
A strong value proposition should appeal to the primary drivers of purchase decisions and be simple enough to grasp immediately.
Building blocks of a powerful value proposition
Successful value propositions generally follow a simple, consistent structure:
Explore More Resources
- Headline: One memorable sentence or phrase that communicates the core benefit.
- Subheadline: A short paragraph (2–3 sentences) that expands on the headline, specifying who it’s for and what makes the offering better.
- Supporting details: Bullet points, brief features, or examples that highlight specific benefits and use cases.
- Visuals (optional): Images, diagrams, or short videos that make the offer and outcomes clear at a glance.
Place the value proposition prominently—on the homepage, landing pages, and other customer touchpoints—so visitors can quickly understand the offer.
How to craft a unique and effective value proposition
- Identify the target customer
- Specify the segment or persona that will gain the most from your product or service.
- Define the customer’s main problem or need
- Describe the pain point, risk, or goal you’re addressing.
- State the solution and primary benefit
- Explain how your offering solves the problem or delivers a desirable outcome.
- Highlight differentiation
- Show why your approach, features, price, experience, or results are better than alternatives.
- Keep language clear and specific
- Avoid vague buzzwords; focus on measurable or observable outcomes.
- Test and refine with research
- Use customer interviews, surveys, A/B tests, and analytics to validate which messages resonate.
- Use a scannable format
- Combine a strong headline, concise subheadline, and quick bullet points or visuals so users can understand value in seconds.
A compelling value proposition directly conveys who the product is for, what it does, and why it matters.
Explore More Resources
Frequently asked questions
What is the purpose of a value proposition?
* To convince customers (and stakeholders) that a product or service delivers meaningful, differentiated value and is worth purchasing or supporting.
What is an employee value proposition (EVP)?
* An EVP is the package of pay, benefits, culture, development opportunities, and workplace experience a company offers to attract and retain employees. It communicates why working at the company is worthwhile.
Explore More Resources
What happens if a value proposition fails?
* If it does not clearly convey unique value, the company may struggle to attract customers and investment, lose market share, and face declining profitability.
Further reading
- Lanning, M. J., & Michaels, E. G. — “A business is a value delivery system” (McKinsey staff paper, 1988)
- Osterwalder, A., et al. — Value Proposition Design: How to Create Products and Services Customers Want (2015)