Tips for Creating a Value Proposition

Drawing on over two decades of executive-level experience in strategy, product management and marketing, and finance, Prasad Sista has served as senior value advisor with SAP America Inc. since May 2017. In this role, Prasad Sista strategically advises customers and supports sellers while creating business cases and value propositions.

Part of the overall marketing strategy of a company, a value proposition denotes the value it promises to deliver to its customers if they choose to purchase its product. In a nutshell, it is a short statement that communicates to prospective buyers the product’s attractive points and differentiating qualities from other similar offerings and the reasons it is worth buying. Formulating a compelling value proposition can be a challenge. Following are three tips that can facilitate it.

Identify the Target Customers and Their Needs

Trying to appeal to everyone results in a diluted value proposition. Instead, companies should find their target customer and get a deeper understanding of their motivations, needs, and challenges. Conducting market analysis and research, creating buyer personas, and speaking to customer service representatives and salespeople can help companies identify their ideal customers and what problems they expect the companies’ products or services to solve. They can then include this information in the value proposition and make it a customer-centered one.

Know the Competition

Studying the competitors and their value proposition is equally essential. It can help companies tweak their value proposition to increase its impact. Furthermore, by identifying the strengths and weaknesses of their main competitors, companies can establish their key differentiators.

Keep It Clear and Concise

A powerful value proposition is concise, well-articulated, and relatable. It should not be more than three sentences. Customers should be able to grasp the message the company wants to deliver and the product’s benefits right away. Finally, the value proposition should convince them that their problems will be solved.