Value proposition

What it means

A value proposition answers three things at once: who the company serves, what problem it solves and why its answer beats what the customer does today. It is neither a slogan nor a service list.

A good one is specific and checkable. "Professional, reliable accounting" says nothing; "we answer within 24 hours and fix your price for 12 months" can be kept or broken.

A value proposition is not the same as the output of a SWOT analysis. SWOT describes the company from the inside, its strengths and weaknesses, while a value proposition looks from the outside, through the eyes of a particular customer. One company can therefore have different propositions for different customer groups while its strengths stay the same.

How it works in practice

Pricing and the copy on a landing page both follow from it. A company that cannot differentiate on anything but price ends in a race won by whoever earns least.

The best source of wording is your own customers: why they came, what hurt before, what they would miss if you closed tomorrow. Those sentences work better than anything invented in a meeting.

When a business plan is prepared for a bank or a grant application, this is the sentence the assessor looks for. We help clients tie it to the numbers: if the company promises faster delivery than competitors, the plan has to show the warehouse or staff costs that make the promise possible.

What to watch out for

A promise the company cannot keep costs more than none. Guaranteeing a reply within an hour brings enquiries, but the first miss costs the client and the referrals they would have made.

A proposition for everyone reaches no one. A company afraid to narrow its target group writes sentences that would fit any competitor, and then pays more in advertising for each customer acquired, because people see no reason to choose it in particular.