by Christina Pomoni

Created on: August 22, 2008   Last Updated: September 07, 2008

A value proposition represents the whole cluster of benefits promised to be delivered to customers to meet their unsatisfied needs. To achieve a strong value proposition, organizations need to have a thorough knowledge of their customer base. By identifying customer needs through market research, firms develop clear and concise value propositions that reflect those needs.

Strong value propositions typically convey a good idea, plainly and simply. Even if the idea is not totally innovative, it is presented in a groundbreaking way to convince consumers that this is the solution to their needs. Many firms have lousy value propositions, which convey vague messages about their operations, products or services. Instead, strong value propositions state clearly the tangible results that customers get from using the firm's products or services. The more specific a value proposition is, the better the results incurred for both the firm and the customers.

In addition, strong value propositions represent the consumer's point of view. For example, instead of saying "our processes are fast" a strong value proposition says "you get your product at your door at no time". In that way, it inherently states good customer service and it straightforward explains to consumers why they should do business with the firm.

A lot of discussion has been in regards to the presentation of a value proposition. Typically, successful organizations present their value propositions in the form of bullet points, and short sentences. In doing so, they do not confuse consumers, and they convey their message precisely and briefly. Moreover, when using short, accurate phrases, organizations impact the emotional consideration of consumers. Studies assess that when consumers enter into a purchasing experience with a firm, they expect certain fundamental benefits. These benefits are perceived based on own mental maps and former customer experience. Therefore, in order to get access to the subconscious mind of each consumer, firms need to develop value propositions that convince consumers that the firm is able to offer these fundamental benefits. In doing so, consumers are converted into customers, who are then converted into strong advocates for the firm, generating positive word of mouth and becoming an important referral source.

The importance of value proposition is reflected in creating a strong differential from competitors. In this context, pricing is not an important consideration. If the value proposition integrates skilfully the increasing quality of prospective leads and of market share and the improvement of operational efficiency, then pricing is mostly related to the buying procedure and not in the effort to attract and convince consumers to enter into a relationship with the firm.

In conclusion, strong value propositions describe the firm's operations and tangible business results to draw interest and share a success story within a few words. Winning firms have an excellent ability to execute their marketing strategies efficiently and to create sustainable and mutually beneficial customer relationships. To achieve that, they need to offer strong value propositions to convert new customers into regular purchasing clients.

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