by Christina Pomoni

Created on: August 25, 2008

In today's competitive market realities, consumers have become more sophisticated and they are less easily persuaded by the marketing hype. In addition, the elaborate market segmentation constantly creates new customer segments with different needs and wants that need to be satisfied. However, the impact of advertising declines because of this detailed market segmentation leads to higher advertising costs and to the need of re-allocating the marketing budget.

A strong value proposition captures the attention of consumers by conveying the benefits a firm can deliver to them in order to satisfy their unmet needs. Typically, clusters of consumers have a common denominating need that can be identified through systematic and thorough market research. Once the target market is defined and analyzed the firm may develop a clear and concise value proposition that would reflect the needs of consumers in the particular market segment.

A well-developed value proposition should convey the message precisely and briefly. Most of the times marketers use bullet points and short sentences with key words that represent what consumers needs to hear and see. By capturing their attention and stimulate their interest consumers want to know more about the firm, its products or services, credit policies and so on. In that sense, the value proposition is a greatly efficient marketing tool.

Another important consideration for an effective value propositions is to be written or presented from the customer's point of view. Consumers need to feel that the firm really appreciates their concerns and honestly aims at satisfying their needs. The language used in a value proposition should make consumers feel like the firm addresses the issue to each one of them personally. For example, instead of saying "our processes are fast" an effective value proposition should say "you get your product at your door at no time". In that way, it inherently implies good customer service, but it straightforward conveys to consumers how satisfied they will be by doing business with the firm.

A strong value proposition should reflect power and confidence. In the extremely confusing marketing hype of today, consumers need to find firms that are powerful in terms of corporate results, but they also convey confidence about remaining viable in the future. Typically, effective value propositions focus on emphasizing customer retention and maximizing lifetime value of desired customer segments.

Effective value propositions can increase the quantity and the quality of a firm's future projects. By using a language that attracts consumers and impacts their emotional considerations, value propositions integrate effectively product pricing, positioning, marketing and account management. In addition, value propositions are important marketing tools because they can describe a firm's tangible business results within a few words. By drawing interest and sharing a success story they create a strong differential between a firm and the competition.

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