How to Create a Compelling Value Proposition

Tools and plans for creating a Compelling Value Proposition


A value proposition is a sales pitch. It should:

  • Interest your target audience by appealing to their real needs, not just their wants and desires
  • Tell them why they should believe that you can satisfy their requirements
  • Be clear and coherent
  • Be memorable, so your target audience will associate you with their needs

A compelling value proposition can be used in a presentation pitch, on your web site, on your letterhead, and in ads. Use it wherever you are trying to draw attention to what you are selling.


"A value proposition is a clear statement of the tangible results a customer gets from using your products or services. It’s outcome focused and stresses the business value of your offering." — Jill Konrath

Characteristics of a Good Value Proposition


An effective value proposition is:

  • Very targeted to the interests of the listener — it is not generic.
  • Expressed in clear, direct language.
  • Jargon free — it uses language the listener will understand.
  • Unique in at least one area where you excel over your competition.

Making your value proposition more compelling

Studies have shown that sales materials have more impact if they include:

  • Customer testimonials
  • Reviews, reports, and articles by unbiased sources
  • Names of well-known customers or sponsors
  • Guarantees
  • Have calls to action
  • Added benefits like:
    • Free delivery
    • Free setup
    • No contracts
    • Unlimited usage
    • ... and more

It is a good idea to have a professional help you design your print ads and your web site.

Differentiating yourself

You will always have competition, so you need to distinguish yourself from them. You need to stand out. Take one or more attributes that you or your products/services have that separate you from the competition and emphasis those in your value proposition. The attribute(s) must be understandable to the target market — they must appeal to your target audience. For example, you could say "We are the  1st choice among gen-Xs" if it were true — this would appeal to those people who are part of that demographic. If your service or product is new, then you could emphasis the demonstrable savings. Your intent here is to "own" the distinguishing attribute in the target marketplace.

Being memorable

In sales materials, users hunt for facts and pay attention to:


There are two main approaches to creating a compelling value proposition. They are:

  • Needs before benefits — Look at your target market and then define your benefits in terms that match their needs.
  • Benefits before needs — Look at your benefits and then define your target market in terms of those most needing the benefits you offer.

Needs-Before-Benefits Approach

Defining pain points

Most people will act to avoid or minimize pain. What you want to do is identify your target market's main pain points to which you have a solution. In other words, mold your service or product in terms that they understand will reduce their pain. However, pain comes in different levels of intensity:

Type of Pain Description You have a solution
Pain Points (ordered from most to least compelling)
Is pain fatal? Is the pain so serious that someone will get fired; the business will go bankrupt; or the problems prevent business from operating? Recruit person most directly responsible as your evangelist.
Is the pain unavoidable? Is the pain caused by a mandate from management or government? Recruit person or group most directly affected as your evangelists.
Is solution needed urgently? Is pain one that needs to be fixed as soon as possible; or is it one of the current  top priorities for the firm? The top-level management will want to hear about your solution.
Are there no good solutions yet to the pain? Are you the only one addressing this pain point? If the pain is recognized as a problem, then the market should be ready for you.

Differentiating your solution

There are a number of things that help make your solution unique and compelling:

  • Different viewpoint — Does your solution look at the problem in a way that is different from any of your other competitors?

  • Is your solution patentable — This allows for better legal protection and increases barriers to entry by potential competitors.

  • Disruptive technology — Is your solution so different that it offers orders of magnitude better performance or greater returns on investment?

Are you worth the risk?

Any time that you become the new kid on the block, you have a problem about credibility; and your solution has a problem about fitting into an existing ecosystem. Ideally, your solution should cause the least amount of disruption with the maximum amount of gain. Typically, a prospective customer is looking for a minimum 30% increase in productivity and similar reduction in cost. The greater this figure, the more likely you are to get a new customer. Of course, you need to deliver on your promise and hopefully exceed it.

If an investor is thinking of funding you, they typically want a 10x return on their investment. For Angel investors, this is over a term of 3-5 years. VCs typically allow for a longer timing horizon.

Creating your needs-based value proposition

Focusing on your potential target markets needs, the steps you need to take can be spelt out using the following table:

Pain Solution/Benefit Name How it eliminates pain What makes you different
Steps in Creating Your Needs-Based Value Proposition Statement
Processing orders is killing us Automated order processing Integrating order entry with shipping automation. Only integrated solution

Benefits-Before-Needs Approach

This approach is often used when you have a startup, without any real customers or clients. In this situation, you believe that you know the benefits you can deliver, but can not clearly identify the target audience who could best benefit from your solution.

This is sometimes called "A solution in search of a problem." However, this is often where the visionaries come into their own. The classic example of this is Steve Jobs who created the Mac, iPod, and iPhone before there was any demand for those products.

Defining Benefits

Suppose that you know that your manufacturing process offers greater speed, lower operating costs, and higher quality when producing widgets than anyone else. It does this by integrating three manufacturing stages that are usually separate steps when producing widgets. At this point, you need to find your target audience: manufacturers or potential manufacturers that would be interested in a more efficient and cheaper way of producing widgets.

The order of the importance of the benefits are subject to change because speaking to potential buyers you will get a better idea of what is most important to them: cost, speed, ease of use; manpower, etc.

Benefit Name Pain Addressed Prospect
Benefits (ordered from most to least compelling)
70% lower cost High cost of producing widgets make it unprofitable to be in that market. This will force the manufacturing to be eliminated or shipped overseas. Those already in the market; or those who would consider going into that market if the costs were low enough to be competitive.
3x production rate Inability to sell in volume when production rate is so low. Those looking to enter commodity marketing of product.
Better Quality Quality of existing production methods have high a rejection rate, increasing the product costs significantly. Those wanting to sell products to an "up-market" target audience who demand higher quality.
Second Supplier Those needing to produce the product have second source for vital equipment, especially one that offers other benefits that the primary supplier does not. Those manufacturers who have had cost, quality, or market constraints imposed on them by current technology and suppliers.

Differentiating your solution

Using this approach, you still need to differentiate your solution from your competitors as described in Differentiating your solution.

Creating your benefits-based value proposition

Focusing on the benefits you offer, the steps you need to take can be spelt out using the following table:

Benefit Pain it addresses How it eliminates pain What makes you different
Steps in Creating Your Benefits-Based Value Proposition Statement
Automated order processing Processing orders is killing us Integrating order entry with shipping automation. Only integrated solution


All of these links are of value to anyone interested in value propositions and other sales issues:


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