What is a Customer Value Proposition

There is no magic formula to optimizing your conversions. It all comes down to identifying and meeting the needs of your customers. And while offering a good product or service is essential, it would still lead you nowhere if you fail to communicate to your audience why they should do business with you. 

Your customer value proposition (CVP) and unique selling proposition (USP) play a crucial role in showcasing the distinctive perks that come with purchasing your product or service to make them more appealing.

Both the CVP and the USP lie at the very core of value marketing. But because the two concepts fall under the umbrella of what you want to tell your audience to make clear your brand is worth their while, they are often mistakenly used conversely. 

It is important to note that the CVP and the USP serve different purposes. The former outlines the promise of value you intend to deliver, and the latter defines your position in the market in contrast with your competitors. 

This article aims to demystify the fundamental differences between these two ideas and provide you with the knowledge you need to design a value proposition that will appeal to your target audience and boost your sales. 

Value Proposition Definition

This essential element in your marketing plan can improve your customer lifetime value in the long run. It refers to a simple statement that communicates, in a few words, why a customer would want to choose your product or service over your competitors’. Since this concept is intended to highlight what makes your offering stand out, it must speak to your target audience in terms that are relevant and appealing to them. 

By addressing your ideal customer’s specific needs, wants, and challenges, your value proposition throws light at your brand’s ability to make their lives much easier. It makes it come off as a lifesaver — a problem solver. When crafted correctly, the value proposition can determine how your clients define your worth. It may become the governing axis in your brand strategy and taglines.

A good value proposition is able to offer three highly important qualities: 

  1. Relevancy — By clarifying how your specific product or service can improve a situation or solve a particular problem for your customer.
  2. Differentiation — By displaying what makes your brand stand out from all other alternatives available in the market.
  3. Quantified value — By delivering distinctive and measurable benefits to your clients.

Since a good value proposition can make the whole difference between your audience wanting to learn more about your offering or hitting the back button, you need to place it where it is most visible on your site.

What a Value Proposition Is Not

Many businesses confuse their value propositions for slogans, but the two concepts differ significantly. While slogans are indeed meant to define your brand, they are not necessarily relevant to its value. Slogans can still be used to drive leads through your marketing. However, your value proposition is what ultimately will make those leads stick.

How a Customer Value Proposition Is Different From a Value Proposition for Your Company

In most cases, businesses tend to think of the value proposition as a consumer-centric concept, but that is not always the case. Sometimes, a value proposition can be targeted at potential employees and define the advantages of working for a particular company.  

You could look at it this way: the value proposition is the umbrella concept, and there are more condensed ideas that derive from it — like the employee value proposition or the customer value proposition. Let’s focus on the latter. 

Suppose you are a product manufacturer. Your value proposition could then include appealing elements such as consistent quality, unmatched customer service, quick order fulfillment, and low prices. These statements would define and measure what sets you apart in the market and the success your buyers receive after using your product in a rough outline. 

Customer value proposition, on the other hand, is more narrowly focused. It revolves around the fact that your product or service cannot possibly appeal to every type of customer. CVP allows you to center your efforts on those who are more likely to buy from you or those you aim to appeal to. 

The customer value proposition highlights the advantages your product promises to deliver to the specific customers you want to attract. So, back to our product manufacturer example, if you are offering solutions to high-end retailers, you may want to let your unparalleled product quality take center stage in your customer value proposition. This would be more effective than focusing on cost-efficiency or other factors that are not as important to your target audience. 

To craft a compelling value proposition or customer value proposition, you first need to gain a broad understanding of the market and identify where your core audience lies. You must learn who your target customer is and what qualities they value in the products and services they buy. 

If you do not know who you are trying to sell to and what attributes they are actively looking for in business solutions, your marketing efforts, including your value proposition, may fall short of the mark. 

In a nutshell, your CVP should describe three primary things:

  • The solution to a problem your customers may have
  • Why they should buy from you
  • How your services are provided

Elements of a Solid Value Proposition

elements of a customer value proposition - DecisionLink

When trying to craft the value selling assertions that will serve as a foundation for your promotional efforts, you might feel somewhat intimidated. After all, the value proposition communicates vital information to your customers, and you want to get it right. Yet, coming up with a solid statement is not as hard as you may think. A strong value proposition is:

1. Easy To Understand 

When crafting a good value proposition, you will want to steer clear from jargon and complicated terminology your customer might not be familiar with. Far from impressing your audience, complex language might drive your potential clients away. Instead, it would be best if you found a way to express what you want to tell them in easy-to-digest terms. 

Keep in mind that you cannot possibly appeal to every customer at the same time. You must craft your value proposition around the greatest demographic for your products and services. Your customer value proposition should explain what makes your brand a perfect match for your ideal customer in their own language.

2. Communicates Concrete Results

If you want to draw in more clients and boost your sales, you need your customer value proposition to state what the buyer can expect. By clearly explaining the value your offering will bring to the table, you are building a solid case for your brand. 

You can even create a more specific customer value proposition for separate products or services. Again, use easy-to-follow words and try to squeeze in as much information as you can about what you do and how. The more information you provide, the more likely your target customer is to choose you.

3. How It Is Different or Better

It is common practice to do some competitive research before you create your brand’s value proposition. The analysis will give you a better overview of what others are doing and allow you to learn what makes your company stand out. This information is incredibly useful, as it lets you explain to your potential clients why they should choose you above everyone else. 

If you and your competitors are too much alike, you can use boosters, or bonus services, to enhance your offering. Including these differentiators in your value proposition could help you generate more sales. 

4. Avoid Hype Terminology

When talking about how great your brand is, it is easy to get carried away and build things up a tad too much. However, a good customer value proposition avoids hype-inducing terms and buzzwords. Your statement should hardly ever include adjectives like “awesome,” “miracle product,” etc. Using them may get in the way of effectively communicating your offering’s qualities or cause misunderstandings that generate disappointment down the line. 

If you make things sound too good to be true, you could end up doing more harm than good. Your potential clients could skip your services entirely and go look for a more realistic promise. 

How To Write a Value Proposition

Learning how to write a powerful CVP is essential if you want your business to attract the right customers. But since it should be concrete to your offering, there is no one right way to go about it. Value propositions can follow different formats. 

The only requisite is that they are unique to your company and your consumers. As the name states, the value proposition needs to communicate value to effectively turn a prospect into a paying customer. 

A good starting point when crafting your value proposition is asking yourself the following questions:

  • What product or service do you sell?
  • What is the end benefit of using your product or service?
  • Who is the target customer for your product or service?
  • What makes your product or service stand out?

Once you have this information clear, you can begin structuring your CVP, which is a block of text that may include:

  • A headline — which should be short and eye-catching. This element will serve as the hook to make your customers want to read your value proposition. It typically includes the end benefit of your offering.
  • A sub-headline — a two to three-sentence paragraph that briefly explains what you offer, who your product or service is for, and why it is useful.
  • Bullet points — a shortlist of specific benefits or features that will help you define why your product or service is unique. Including bullet points allows you to present more information in a skimmable way so your customers can scan your value proposition quickly and pick up on the features that make your product special.
  • A visual — a graphic, hero shot, or product image that illustrates and reinforces your message makes your value proposition more likely to catch the buyer’s eye.

A good value proposition needs to pinpoint the characteristics that make your brand different and unique. Visitors to your site are more likely to notice your value proposition if it is substantial. 

Yet, keep in mind that, although you will want to include as much information as possible, you do not want to write a CVP that is too lengthy and complex. You only have a few seconds to catch and maintain the reader’s attention, so writing an extremely long value proposition could be counteractive. 

Your value proposition needs to set you apart from your competitors. The internet gives customers easier access to a lot more options than ever before, so you have to offer them more reasons to choose you over any other alternative. Capturing their attention with solid arguments during the research phase is essential if you want to keep their business. 

The Value Proposition Canvas

Crafting a powerful value proposition becomes much more manageable when using visual aid. A value proposition canvas allows you to position your offering around your target audience’s needs and quickly recognize what it is about your product or service that provides value to them. It is useful both when launching a new item into the market or when trying to improve an existing one. 

DecisionLink value proposition template showing how to craft your USP by matching up your value map with your customer profile

The value proposition canvas consists of two sections with specific subsections:

The Customer Profile 

Here, you analyze the consumer’s wants and needs and how they can impact your value proposition. It includes three separate areas:

  1. Customer jobs — which is the purpose of your offering from the client’s perspective. You can better delimit it by analyzing the tasks your customer is likely to use your product or service for or a problem they will solve with it.
  2. Customer expectations —  which is the idea your customer has of what they can achieve with your product or service.
  3. Pain points — which are the issues your buyers may experience while completing the customer job.

The Value Map

Here is where you describe what your product or service offers to your audience. It is divided into the following sections:

  1. Gain creators — which are the features or characteristics of your product or service that will make the consumer happy.
  2. Pain relievers — which is how your product or service will help the consumer overcome the pain points you defined in the customer profile.
  3. Products and services — which is where you delimit which part of your offering is best suited to help solve your clientele’s problems.

Value Propositions That Work

When looking for new providers, buyers tend to consistently look for the same primary benefits. Covering at least one of these in your value proposition will increase your chances of catching your ideal client’s attention and boost your sales. 

According to the Harvard Business Review, these are the four main value determinants to center your attention on:

1. Indispensability

Many products or services could fall into this category. Building a value proposition around the idea that your offering is essential for a company’s day-to-day operations is a simple yet effective way to draw in customers that do not want to end up missing out. 

Tread carefully when conveying the “must-have” message, though. Be sure not to use hype words to describe your offering. You do not want your value proposition to sound braggy or too good to be true.

2. High Quality

Brands that set a standard are more likely to remain in the buyer’s mind. Your value proposition must emphasize your product or service is the highest possible quality and worth investing in.

3. Best Price

While rock bottom costs may be valuable for some clients, most companies are willing to pay the actual price, however high, for a great product or service. 

Focusing on your quality-to-price ratio in your value proposition will allow you to justify the monetary value of your offering. It also demonstrates that it is still an excellent deal even if it falls into the less budget-friendly side of the balance. 

4. Luxury

Making your brand aspirational is another great way to attract a certain type of customer. Offering luxury and the idea of success or ease of use could make your product or service appear more valuable to some. 

Examples of Great Value Propositions

Now that you know the basics of how to build a strong customer value proposition, it is time to get down to work. You could use a value proposition template, or if you need a little extra inspiration, follow a value proposition example.

1. Vimeo

image of vimeo homepage customer value proposition

This company uses iconography to reinforce the message in its value proposition. It is visually appealing and provides a clearer idea of its offering.

2. Evernote

image of Evernote homepage customer value proposition - DecisionLinkEvernote conveys flexibility and device compatibility in its value proposition by using the proper visuals. Moreover, they briefly explain the main benefits users get from the platform.

3. Pagely

image of Pagely homepage customer value proposition - DecisionLinkPagely’s example is as straightforward as it gets. It efficiently answers the core question in the customer value proposition without adding fluff to it.

Examples of Poor Value Propositions 

A weak value proposition could make you lose your potential customer’s business. Here are some examples of what you should not do.

1. Flippa

image of Flippa homepage customer value proposition - DecisionLink

Flippa’s value proposition lacks substance and uses hype to push its offering. 

2. HighFive

image of Highfive homepage customer value proposition - DecisionLinkHighFive has its value proposition scattered across its site. This may allow the company to present more information. Yet, it might be counteractive if the customer does not take the time to navigate through it to read all the information.

3. Exalead

image of exalead.com homepage customer value proposition

The value proposition statement for this site is hard to spot. This statement should always be highly visible to communicate your intentions. 

What Is a Unique Selling Proposition?

The USP, in short, is that one specific benefit that makes your business better than the competition. It helps focus your marketing strategy and guide decisions regarding branding, copywriting and messaging. 

The purpose of your unique selling proposition is to quickly communicate what sets you apart from other similar options in the market.

Note the keyword here is “unique.” Your USP plays to your strengths and should indicate the factor in your offering that your customers cannot find anywhere else. To craft your unique selling proposition, identify something your target audience deeply cares about.

A compelling USP should be assertive but defensible, and it should come from listening to your audience’s needs. Avoid using a generic stance that can and will fall flat, and focus on a specific quality your clients cannot resist. 

CVP vs. USP: How Are They Different?

As previously stated, the USP and the CVP often get confused due to the similarities of their core essence. The CVP is more substantial and often consists of a short block of text. In contrast, the USP is typically a one or two-line statement (headline and sub-headline) that mentions a specific quality of your offering instead of giving a more in-depth explanation. 

You can generally place the USP above the fold on your business website, as it clearly defines the ultimate point of differentiation between you and your competitors in a few words. 

After all, you want people to realize sooner than later why they should be doing business with you — at least before they have the chance to go back to the search results and settle for the next best thing. 

Unlike the CVP, the USP narrowly focuses on highlighting your offering’s key selling point. It does not have to revolve around the above-mentioned value determinants. Instead, you can also craft it around other factors, like:

  • Convenience
  • Service
  • Speed
  • Selection
  • Philosophy

The primary difference between the USP and the CVP, in simple terms, is that, while the former explains how you stand out, the latter lets the customer know why they should care about it.

Why Do You Need Both?

The USP is a more condensed way to explain to your target audience why they need your product or service. You do not want to skip this statement in your strategy, as it will attract your potential customers’ attention a lot faster. 

Yet, the value proposition will allow you to explain in greater detail the benefits (both functional and emotional) your brand provides and how they outweigh the cost of your offering.

The Bottom Line

In the ever-growing business landscape, the competition gets fiercer by the day. Therefore, you need to come up with unique differentiators to convince your ideal customers to choose you above your competitors. 

The unique selling proposition and the customer value proposition will help you summarize the features you want your potential clients to notice and build a strong case for your brand. 

Effectively crafting these statements is essential to making your audience aware of the end benefit of your product or service and keeping it in their mind. If your organization needs technology to simplify, automate and scale value-based conversations with your customers and prospects,  DecisionLink has a solution for you. Contact us today and learn how our ValueCloud can help you reach your goals.