What Is a Value Proposition?

The value proposition is a foundational element of a company's go-to-market strategy. Learn the elements of a good value proposition and the steps for writing one below. We'll also cover how a value proposition differs from a mission statement and provide four compelling and inspiring examples.

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Business

An entity that engages in economic activity—mainly making goods or offering services—to earn income or generate profit over time.

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About the Author

Catherine grew up in Southern California wearing a lot of black and trying to perfect the art of sarcasm. Prior to joining The Fool as a contract writer, Catherine was climbing the corporate ladder in marketing roles and dabbling in too many side hustles. When she's not writing, she can be found riding a horse in the country or shopping online for clothes.

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Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Apple. The Motley Fool has a disclosure policy.

How to write a value proposition

Developing a compelling value proposition will require trial and error and user testing. Follow the steps below to craft a statement that effectively captures your product's unique positioning.

Research competitors. Compile a list of your competitors and their value propositions. You can usually find competitors' value propositions on their websites.

Research your customers. If you haven't done so already, develop customer personas. Personas are detailed descriptions of customer groups. Personas can describe demographic characteristics, such as age and marital status. However, they should also cover emotional characteristics such as pain points, frustrations, and motivations. Understanding these elements will help you craft a more persuasive value statement.

List the pros and cons of your product or service. Next, do a comprehensive review of your product relative to competitors. Your value proposition should highlight what makes your offering better than the alternatives. Your product's areas of superiority can relate to the product itself or the way you deliver it.

Also, don't overlook your product's shortcomings relative to competitors. There may be an opportunity to address them head-on or position them as positives rather than negatives.

Write. Value propositions are brief. Limit yourself to a single statement or a few sentences at most. If you're stuck, imagine someone at a cocktail party has asked what you do. Consider your product, customer, and competitors, and then answer that question in three sentences or less. Be open to writing drafts until you develop one that resonates.

Gather feedback. Share at least three value proposition drafts with others for feedback. Ideally, the draft statements should be tested with internal company stakeholders and prospective customers.

Rewrite. Incorporate feedback where it makes sense to revise and finalize your value proposition.

Test visually. As a last step, review how the value proposition will appear on your company website and marketing materials. You may find that it looks too long or too short in certain placements. Adjust accordingly.

What Is a Value Proposition?