What is a Value Proposition?
Definition
A value proposition is
a clear statement about the
outcomes that a customer
or an organization can
realize from using your
products or services.
What the Value Proposition is NOT
Differentiation
SLOGAN DESCRIPTION INFO
NOT NOT NOT
a slogan or a description an information
catch phrase. of your services about your company,
and passions. product or service.
What is Value?
Examples of delivering value:
Process improvement
Saving time
Saving money
Helping to make money
Providing valuable information
Making someone's day easier
Value Proposition Builder Framework
Six distinct elements that leads directly to the creation of a compelling value proposition.
6. PROOF 1. MARKET 2. VALUE
Substantiated credibility and The specific group of Benefits minus costs, as
believability of your offering customers you are targeting perceived by the customer
5. DIFFERENTIATION VALUE 3. OFFERINGS
PROPOSITION
How you are different from The product / service
and better than alternatives 4. BENEFITS mix you are selling
How your offering delivers
clear customer value
Source: Greener Consulting, Barnes et al (2009)
Value Proposition Builder Framework
Six distinct elements that leads directly to the creation of a compelling value proposition.
Substantiated credibility and 6. 1. The specific group of
believability of your offering PROOF MARKET customers you are targeting
How you are different from 5. VALUE 2. Benefits minus costs, as
and better than alternatives ALTERNA- PROPOSITION VALUE perceived by the customer
How your offering delivers TIVES The product / service
clear customer value mix you are selling
4. 3.
BENEFITS OFFERINGS
Value Proposition Builder Framework
1.
MARKET
6. 2.
PROOF VALUE
VALUE
PROPOSITION
5. 3.
ALTERNA- OFFERINGS
TIVES
4.
BENEFITS
Value Proposition vs. Customer Segment
GAIN GAINS
CREATORS PAINS
PRODUCT CUSTOMER
& SERVICES JOBS
PAIN
RELIEVERS
VALUE PROPOSITION CUSTOMER SEGMENT
Value Proposition
VALUE PROPOSITION
& IDENTIFICATION
TEMPLATES
Creating the Value Proposition
TARGET PROBLEM(S) SCOPE SOLUTION BENEFIT(S)
SEGMENT
The customers The problems The scope that The offering The benefits
and people who they struggle our VP will that is our people can
will buy. with. address. Value Prop. expect.
Components of a strong Value Differentiation
As the basis for closing the Value Perception Gap
VALUABE SELLER VALUE
“I want” & “I need” VALUE PERCEPTION
PROPOSITION
DIFFEENTIATED GAP
“No alternatives are as good”
CUSTOMER
SUBSTANTIATED
“I trust” & “I believe” VALUE
PERCEPTION
DECISION FOUNDATION FOR DECISION
TO SELL TO BUY
HIGH PRICING / LEAD GENERATION
LOYALITY / SALES GROWTH
GROWTH OF MARKET SHARE
Value Proposition Template
The 3 Elements of a winning Value Proposition
Components RESONATE DIFFERENTIATE SUBSTANTIATE CREATES FOUNDATION FOR …
of a strong
Value Proposition “I want” “The best “I trust” Lead generation success
“I need” option?“ “I believe“ New client wins / Loyality
WEAK DIFFICULT TO ABLE TO Premium Pricing
RESONANCE SUBSTITUTE SUBSTANTIATE
WHAT BUYERS SAY …
STRONG EASY TO
RESONANCE SUBSTITUTE “ I don’t Need“
“ Not important enough“
STRONG DIFFICULT TO
Take One RESONANCE SUBSTITUTE ABLE TO “ What’s your best price? “
Away … SUBSTANTIATE “ I can do without you“
“ I’m skeptical“
NOT ABLE TO “ Can’t risk it“
SUBSTANTIATE
Source: RainToday.com (2010)
Value Identification – Template
Product / Service or Feature Function Technical Value Business Value Personal Value
Identify a product or service Identify what Identify how it Identify how it Identify how it
your product does helps from technical helps from business helps from business
perspective perspective perspective
Ten-Point Value Proposition Template – 1/2
Corresponding areas in Figure Functional Responsibility
How will we substantiate our ability to
deliver the resulting customer experience
measurably and specifically?
Over what time frame will the proposition
be delivered to the customer?
How will the value proposition
be communicated internally
and externally?
How will the value proposition
be operationalized throughout
the business?
How will we measure and monitor
the effectiveness of the proposition
on our business?
Ten-Point Value Proposition Template – 1/2
Corresponding areas in Figure Functional Responsibility
Who is the intended customer?
What will the customer’s experience be of
the offering and the company, and what
price will they pay?
What offerings will we create to deliver the
experience to the customer? What purchase
or usage of offerings do we want from the
customer?
What benefits will the customer derive from
the experience and at what cost?
What competing alternatives do the
customers have? How are we different?
Value Comparison Matrix
Analyze your values compared to competitors
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None
Customer Value Map – Matrix CUSTOMER VALUE MAP
HIGH VALUE MAP HIGH MARKET PERCEICED PRIVE LOW Poor COMPANY 1
value COMPANY 2
Poor
RELATIVE PRICE value COMPANY 3
Excellent COMPANY 4 Excellent
value value
LOW
LOW RELATIVE SATISFACTION HIGH
LOW MARKET-PERCEIVED VALUE HIGH
Customer Value Map – Matrix
HIGH Poor
Value
COMPANY 1
RELATIVE PRICE YOUR COMPANY
COMPANY 3
COMPANY 2 Excellent
Value
LOW
HIGH
LOW RELATIVE SATISFACTION / QUALITY
Competitive Positioning Map
Compare your value against your competitor‘s value to your customers
VALUE A
COMPETITOR 2 COMPETITOR 1
YOUR COMPANY
VALUE D
VALUE B
COMPETITOR 3
COMPETITOR 4 COMPETITOR 5
VALUE C
Priorisation Value Map
Prioritised, real and augmented customer benefits
LOW DEGREE OF DIFFERENCE* HIGH This is a placeholder text. This The text demonstrates how your
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LOW VALUE TO CUSTOMER HIGH
* Degree of Difference from Alternatives
Value Proposition – Create a Message Flow
PART 1 (THE HOOK)
DRIVERS GOALS PROBLEMS VALUE PROOF
Internal or external drivers Customer’s goals in light of Obstacles that are preventing Tangible or intangible Similar problem solved for
influencing customer’s these internal them to achieve their goals. benefits they see if you help other customers.
overriding or external drivers. them eliminate these Concrete benefits / ROI.
objectives. obstacles.
PART 2 (THE HOW)
HOW USP COMPETITION OBJECTIONS RESPONSE
How your solution does help Your Unique Selling Your competitor’s approach Questions and objections that Your response to these
solve this problem and deliver Proposition to solve inferior to your approach. your customer could have questions or objections.
these benefits. this problem. about your claims.
Source: Gordana Stok, Content Bridge (2013)
Value Proposition Canvas CUSTOMER
PRODUCT GAINS
GAIN CREATORS
Describe how your products
and services create customer gains
Describe the benefits your
customer expects, desires or
would be surprised by.
PRODUCTS CUSTOMER
& SERVICES JOBS
List all products PAINS Describe what a
and services your specific customer
value proposition Describe negative emotions, segment is trying
ist built around. undesired costs, situtations
and risks. to get done.
Describe how your products and
services elemenate customer pains, negative
emotions or undesired costs and situations.
PAIN RELIEVERS
Company: Product: SUBSTITUTES
Name Name
Ideal customer:
Name
Value Proposition Canvas
PRODUCT CUSTOMER
PRODUCTS GAIN CREATORS GAINS CUSTOMER
& SERVICES JOBS
Your Text Your Text
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Your Text Your Text Your Text
Your Text PAINS
PAIN RELIEVERS
Your Text
Your Text Your Text
Your Text Your Text
Your Text Your Text
Your Text
Your Text
Designed for: Designed by: SUBSTITUTES
Name Name Your Text
Your Text
Ideal customer: Your Text Your Text
Your Text Your Text
Name
PRODUCTS & GAIN CREATORS PRODUCT
SERVICES
Your Text
Your Text Your Text
Your Text Your Text
Your Text Your Text
Your Text Your Text
Your Text Your Text
Your Text
PAIN RELIEVERS
Your Text
Your Text
Your Text
Your Text
Your Text
Your Text
GAINS CUSTOMER JOBS
Your Text Your Text
Your Text Your Text
Your Text Your Text
Your Text Your Text
Your Text
Your Text CUSTOMER
PAINS
Your Text
Your Text
Your Text
Your Text
Your Text
Your Text
Customer Value Canvas
VALUE PROPOSITION CUSTOMER
PRODUCTS & GAIN CREATORS GAINS CUSTOMER JOBS
SERVICES
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PAIN RELIEVERS PAINS
Your Text Your Text
Your Text. Your Text.
PRODUCTS & SERVICES GAIN CREATORS PRODUCT
• Your Text • Your Text
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PAIN RELIEVERS
• Your Text
• Your Text.
GAINS CUSTOMER JOBS CUSTOMER
• Your Text • Your Text
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• This is a placeholder text.
PAINS
• Your Text
• Your Text.
Value Proposition
CREATING A
VALUE PROPOSITION
STATEMENT
Value Proposition Statement – Template
FOR Text _____________________________________ TARGET CUSTOMER
WHO Text _____________________________________ STATEMENT OF THE NEED
OUR Text _____________________________________ OF OPPORTUNITY
Text _____________________________________ PRODUCT / SERVICE NAME
IS Text _____________________________________ PRODUCT CATEGORY
THAT STATEMENT OF BENEFIT
Source: Geoff Moore
High-Concept Pitch – Template
A high concept pitch distills a startup’s vision into a single sentence. It’s the perfect
tool for fans and investors who are spreading the word about your company.
THE Text _____________________________________ PROVEN INDUSTRY EXAMPLE
FOR / OF Text _____________________________________ FOR / OF NEW DOMAIN
THE FACEBOOK THE FIREFOX OF FLICKR FOR
FOR BUSINESS MEDIA PLAYERS VIDEO
PROS
Source: Venture Hacks
XYZ Value Proposition Statement – Template
X WE HELP _________________________________________________________
Y DO _________________________________________________________
Z DOING _________________________________________________________
Source: Steve Blank
Christensen’s „Jobs to be done“ – Template SAMPLE
ACTION VERB Manage
OBJECT OF ACTION Personal Finances
CONTEXTUAL IDENTIFIER at Home
Source: Clay Christensen
CPS Value Proposition Statement – Template SAMPLE
CUSTOMER I believe my best customers are small and WHO YOUR
medium-sized business (SMB) markets. CUSTOMER IS
PROBLEM Who cannot easily measure campaign ROI because THE PROBLEM
existing solutions are too expensive, complicated to YOUR ARE SOLVING
deploy, display a dizzying array of non-actionable charts.
SOLUTION Low cost, easy to deploy analytics system designed for YOUR SOLUTION
nontechnical marketers who need actionable metrics. FOR THE PROBLEM
Source: Patrick Vlaskovits and Brant Cooper
Elevator Ride „What, How, Why“ – Template SAMPLE
WHAT Free, easy to use STATEMENT OF THE NEED
HOW online OF OPPORTUNITY
WHY managing your money PRODUCT / SERVICE NAME
PRODUCT CATEGORY
“Domain.com is the free, easy way
to manage your money online.”
Source: Dave McClure
Value Positioning „Why, What, Who“ – Template
WHY Superlative ___________ WHY CHOOSE THIS PRODUCT ?
WHAT Label ________________
WHO Qualifiers _____________ WHAT IS THE PRODUCT ?
WHO SOULD CHOOSE THIS
PRODUCT ?
Source: Erik SInk
Short and Sweet – Template
WE HELP BUSINESSES TO
[INSERT TECHNICAL, BUSINESS
OR PERSONAL VALUE]
Sample: We help businesses to decrease
costs of goods sold and administrative time.
Connect Business Value with Technical Value
– Template
WE HELP BUSINESSES TO
[BUSINESS VALUE] AN DO THIS BY
[TECHNICAL VALUE]
Sample: We help businesses to decrease costs of goods
sold as well as administrative time and do this by improving
their ability to effectively manage their inventory levels.
Connect Technical Value with Business Value
– Template
WE HELP BUSINESSES TO
[TECHNICAL VALUE] AND THIS OFTEN
LEADS TO [BUSINESS VALUE]
Sample: We help businesses to improve their ability to effectively manage their
inventory levels and this often leads to a decrease
in cost of goods sold as well as administrative time.
Connect the Product with Value – Template
WE PROVIDE [INSERT PRODUCT]
AND THIS HELPS BUSINESSES TO
[TECHNICAL OR BUSINESS VALUE]
Sample: We provide inventory management software and this
helps businesses to decrease their cost of goods sold and decrease
administrative time.
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