A value proposition is a company’s promise to its customers about the value the company produces. The word contains two parts “value” and “proposition”.

Of these, the value is the one that the company produces. It is the value produced through the company’s service or product, and which the customer receives. Thus, every company needs to be fully aware of the value it produces so that the value can be crystallized. It is not always easy, and sometimes the value the company thinks it produces, and the value the customer experiences, are not the same. This can be avoided by talking with customers and constantly asking for feedback.

The proposition part in a value proposition means a concrete, value-related promise. The promise must be real, achievable, and related to value. It must also be held so important, and the company so committed to it, that the promise is not broken. Therefore, it is necessary to give thorough thought to what is promised and how to keep the promise.

A value proposition is more than a slogan

Since the value proposition encapsulates the value produced by the company and the associated promise, it is rare that it also works as a slogan. Surprisingly, working with businesses we have noticed, that these two concepts are often mixed up.

For example, the well-known Nike slogan “Just do it” contains no value and no promise. If you use Nike products and feel that “I just don’t do it”, no value has been missed, and no promises have been broken. A slogan is part of a company’s branding work and, in this case, reflects more the company’s attitude and feeling than anything else.

When compared to what Duolingo promises right on the front of their web page “The free, fun, and effective way to learn a language!” there seems to be a vague difference. This opening might not exactly be the Duolingo’s slogan, but can easily be interpreted as one, due its placement in their service.

The sentence clearly has value in form of “free,” “fun,” and “effective.” Only free itself is something that companies do not often offer. The promise in the sentence is the “learn a language”. If that does not happen with the help of the service, then something is wrong. When evaluating the promise, the “effective” is slightly tricky, as is the question of when has a person really learned a language.

Since the value proposition is not a slogan, it does not have to be stated in one sentence either. It may very well be the length of a small paragraph. We tell businesses to crystallize efficiently but take up the space that it takes.

Aligning a value proposition to suit different target groups

Many companies have more than one customer segment. There is no need to try to produce a single value proposition for all of them. The value proposition can be multi-level and consider the different target groups.

If a company sells to another company, the value promise can be targeted one way at the employee actually using the product or service, and another way at the company’s management. The value the selling company produces for the customers’ personnel can be concretised for example as their work speeding up, becoming lighter or creating joy at work. The customers’ management probably values the promise of euros saved, productivity increased or reduced sick leave.

In our Kinesis-project, we have worked with companies, new or established, and helped them understand how a good value proposition works. Maybe this article brings some good insights to you readers, too.

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