Value proposition

A business value proposition or proposition is about the customer value that a company or initiative delivers to its customers.

What it is

Some descriptions of what a proposition is:

(1)

A clear explanation of why a customer should choose your product or service, instead of someone else's

(2)

What value do you offer, and why is it worth it?

(2)

What do you offer, to whom, how, and why does it matter?

Some aspects

• It's about the overall promise of value to the customer
• Covers both emotional and practical benefits
• Cannot be seen separate from target customers

Components

A proposition usually includes:

Component	Remarks
Target customer	Who is this proposition for?
Need	What problem/need - gain/pain do you address? What problem do you solve for the custoemr
Solution	How do you solve it?
Benefits	What specific outcomes or advantages do you realise for the target customer?
Differentiator	Why is your solution better?

Related:

Aspects	Remarks
What values do you not deliver?	You can't be everything to everyone - What do you not do?
Price	What's the price the customer has to pay, to receive the benefits? Related: Pricing & pricing models - E.g.: Price to value? Price to cost?
Product-market fit
Positioning	Specific proposition for a specific target group

Proposition & selling points

A value proposition integrates key selling points into one coherent message - as perceived by specific customers:

• Selling point and Unique Selling Point (USP) means the same here. And don't take the word unique too seriously
• Usually, just include a handful of selling points to develop the proposition: It becomes contrived and artificial when taken too far
• "A value proposition is like the strategic whole, while the USPs are the tactical highlights" - Sounds nice. I'm not completely sure if I agree with this
• "A value proposition is the full story - selling points are the punchlines"
• As if selling points are the ingredients, and the value proposition is the recipe - or the whole dish
• a proposition is the elevator's pitch - Selling points are the hooks or individual arguments.

Link with business viability

A value proposition is about customer value, not about business viability. Some aspects that are not included in a proposition:

• Market size
• Revenue potential
• Cost structure
• Business model sustainability
• Competition mapping.

However, it isn't too hard to estimate the business viability from a proposition. Some concepts or methods that may help with this:

• Business Model Canvas
• Lean Canvas
• TAM/SAM/SOM.

See also

• Innovation & marketing