Understanding is often based on perspective. You know your company offers customers unique, valuable, and special services or products because you’re on the inside. The question you need to ask yourself is: Do potential customers know what I know?
If the answer is no, don’t worry. That’s why we need value propositions. They help us to achieve clarity around our brand, enabling us to craft messages that can speak to customers in the language that makes sense to them. A value proposition is all about being customer-focused and putting yourself in their shoes.
What is a value proposition?
A value proposition is a statement about the benefits customers receive from your service or the problems that your product will solve for them better than anyone else. Value propositions are used by every part of your business to help you communicate the value of your product, service, or overall business to your customers effectively. There are several key dimensions to include a value proposition, including:
- Relevancy — why should your customers care?
- Quantified value — how does this benefit your customers?
- Unique Selling Proposition (USP) — how is this offering different to the competition?
Value propositions should be based on your customer’s perspective, even though it can be tempting to focus on outdoing your competition. Yet according to McKinsey, “In many cases, the customer — not the competition — is the key to a company’s prospects.” It’s a matter of focus. Looking at your competitors might define your competitive advantage — i.e., what do you do better than them? But looking at your customers defines value. The brands that can create and demonstrate value consistently are in a stronger position than those who compete on price point, or brand awareness, alone. Instead of simply racing towards the lowest price, you can confidently speak to the specific needs of your customer.
How to write a value proposition
Developing a value proposition requires awareness of a range of factors, including:
- Customer feedback
- Industry, market, and competition
- Company mission and values
- Product features and benefits, along with Unique Selling Proposition
In a past article, we’ve detailed how you can write a value proposition for your business from start to finish. You can also use a value proposition canvas to help you map out the essential elements of your value proposition. Here’s an example from digital strategist Peter Thomson:
Once you’ve filled out your value proposition canvas, you can move on to using a value proposition template to actually write your value propositions.
There are many examples out there, but entrepreneur Steve Blank has come up with a simple one he calls the XYZ value proposition template:
We help [X] to [Y] by [Z].
Take this template and come up with your own creative statements. Replace X, Y, and Z with answers relating to your own product, service or brand.
Value proposition examples
Your value propositions are the foundation for consistency in your business’s activities. Understanding the exact value customers get from your business is key to branding exercises, copywriting, product development and sales enablement. Along with being used in internal decision-making processes, your main value proposition is usually displayed boldly on your website, for example, and other customer touchpoints.
Let’s look at some of these outputs in the following examples, to demonstrate and deconstruct four value propositions from well-known brands that clearly speak to their USP.
1. Slack: Where work happens
Slack is a collaboration tool for teams. Slack’s value proposition is that they make users more productive with an easy and simple collaboration platform that is also fun to use. From the product to customer service interactions to their marketing material, everything Slack does revolves around fulfilling the promises their value proposition makes.
Take, for example, Slack’s first ad campaign. It’s fun, but it also quantifies the value companies see when they start using Slack — 25% fewer meetings? Sign me up. Instead of merely claiming to improve productivity, the ad provides a clear example of what “improved productivity” looks like … and what it feels like.
This value proposition stands out because of the industry Slack operates in. Team communication tools are well-known for being a little, well, dull. They’ve often been a necessary but painful ordeal, with employees struggling to collaborate effectively, despite using multitudes of different tools. Everyone feels the pain of collaborating over email with back and forth chains that seem to drain hours from your day.
No tool — until Slack — has been able to provide a powerful and enjoyable collaboration experience. Slack is now a brand synonymous with ease of experience and modern office collaboration.
Their approach works. Slack is the fastest-growing SaaS startup ever, and used by 77% of Fortune 500 companies. Despite this legendary growth, Slack famously said it was a business with no salespeople.
2. Bloom & Wild: mailbox flowers
Bloom & Wild is an online flower delivery company focussed on simplifying the process of ordering luxury flowers. Aron Gelbard, CEO and founder explained their value proposition in their 2017 funding announcement: “We’re enabling [our customers] to order flowers and gifts from the palm of their hand with better product, designs and payments.”
I can’t be the only person who has thought of doing something nice, only to give up when I realize how much work it takes, or when I couldn’t find exactly what I needed. Bloom & Wild makes it possible for customers to deliver flowers in under a minute using their smartphone or computer, meaning that going from thought to action is almost instantaneous. As Gelbard says, “Our mission is to make sending and receiving flowers a joy, using technology to turn emotions into an action in the simplest and most beautiful way possible.” The flowers are hand-packaged to be delivered through letterboxes, sent as closed flower buds for a longer bloom.
While many companies deliver flowers, Bloom & Wild differentiates itself by offering a smooth customer experience, as well as competitive pricing, with significantly cheaper blooms than average.
The company’s exponential growth has been substantially driven by word-of-mouth referrals. Bloom & Wild communicates its value proposition so clearly that its customers perform much of the hard task of marketing for them. With Bloom & Wild, sending fresh flowers is as simple as sending a text and receiving them is as simple as receiving a letter.
3. Airbnb: belong anywhere
Airbnb first became known as a leader of the sharing economy, disrupting the hospitality industry. Its core product is an online booking platform that connects guests with hosts who have spare accommodation. Because of this business model, Airbnb actually has two entirely different types of customers to market to: guests who need a place to stay, and hosts who would like to make some money by renting out their space.
Airbnb’s unique value proposition for guests is the opportunity to get a truly local experience when they travel, especially when compared to staying at a hotel. In their own words, “Airbnb exists to create a world where anyone can belong anywhere, providing healthy travel that is local, authentic, diverse, inclusive and sustainable.” Their rooms are known for having more character than the average chain of hotels. They are usually located in a neighborhood, and guests might even be staying with a local host who can give them first-hand knowledge of the culture (including where to eat!). This feeling of being at home in a foreign place leads directly into Airbnb’s main tagline: Belong Anywhere.
For hosts looking to make money, Airbnb makes it “simple and secure” to fill a space that would have otherwise gone empty, effectively turning their hosts into “hospitality entrepreneurs.” In recent years, hostels, bed and breakfasts and more traditional hotels have also jumped on Airbnb to offer their spaces for rent. Because Airbnb offers every host access to a large number of potential guests, it’s become more appealing to businesses looking to advertise their rooms.
Airbnb ensures the safety of both guests and hosts through their verification process and through actively seeking reviews from both parties. Instead of trying to find short term guests through Craigslist (or just avoiding it altogether), hosts have a safe way to generate income from their extra space and perhaps make a new friend as well. Airbnb also offers insurance against property damage and accidents, so hosts can breathe easy, even though they are welcoming a new person into their home.
As a business goes through different stages of growth, its value propositions are likely to change. Originally marketed as much cheaper than staying in a hotel, Airbnb has now become an experience-driven, mainstream staple for tourists globally.
Along with having different value propositions for different segments of customers, businesses can also have product-specific value props. Airbnb’s experience platform — which connects guests to “experiences” where they can participate in a local activity with a local guide — overlaps with the company’s mission statement, while providing its own unique value:
“With Experiences, Airbnb offers unprecedented access to local communities and interests through 25,000+ unique, handcrafted activities run by hosts across 1,000+ markets around the world.”
“Belong anywhere” is a powerful statement that reflects the Airbnb value proposition — creating a global (yet hyperlocal) community of guests and hosts.
4. Fjällräven: Forever nature
Fjällräven is a classic Swedish outdoor clothing and equipment brand known for quality and durability. Founded in 1960 by Åke Nordin, they designed a new style of backpack that was more functional than the traditional designs available. Fjällräven’s products were originally intended for the winter wilderness of northern Scandinavia, and to be used by professional research expeditions. Now, the 60-year-old brand is experiencing a resurgence amongst younger generations in North America. This success is due to their core value proposition — customers feel confident in purchasing from Fjällräven because of their high-quality, sustainably made products that balance function and fashion. Customers look great wearing Fjällräven backpacks, but they could still go hike a mountain.
Because of their origins, you might think that Fjällräven is solely aimed at people actively participating in outdoor pursuits like hiking, mountaineering, and bushcraft, but that’s not the case anymore. As they’ve expanded “south of the frost line,” Fjällräven has had to re-invent themselves to appeal to a newer generation that doesn’t spend their days on a fishing boat or in extreme conditions. “People now see this brand as aspirational of an experience, of community, of living a certain kind of life,” explains Nathan Dopp, Fjällräven’s North American President. In other words, being a Fjällräven customer will get you closer to the outdoors, even if you’re not already an avid mountaineer.
Finally, their dedication to sustainability also appeals to the conscious consumer looking for products they know were made using sustainable supply chains and production processes. Fjällräven manufactures many of its own products using its own G-1000 material, as well as its own Greenland Wax, contributing to its value proposition of offering quality and durability. As their website says, they “craft products for a lifetime of memories.” The time-tested quality of its products justifies what some consumers might view as the expensive pricing.
Fjällräven consistently communicates its value proposition through inspiring, aspirational branding and marketing materials. It’s a brand that customers trust, and love to do business with.
Value propositions are a living document
There is no one-size-fits-all for value propositions. It’s likely you’ll have to rework your value propositions over time, as your business develops and the environment changes. You may require multiple value props for the various products and services your business offers.
Instead of appealing to everyone, you’re communicating the unique value of your product, service, or brand, to a core customer base. The next challenging, but exciting, step is to communicate this value clearly and consistently to your customers at every important touchpoint.