What Is a Value Proposition?

A value proposition serves as both a mission statement and a marketing tool; it describes what the company, product, or service does. Before starting your business it’s important to create an effective value proposition to differentiate yourself from others. It also illustrates what makes the company’s offering superior to its competitors. 

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What is the purpose of a value proposition?

Having a unique value proposition creates company value for its customers. For example, until wireless headphones came along, customers didn’t realize they wanted headphones. It helps a company of any size attract investors, new customers, or clients. It can also help keep customers and boost brand loyalty. 

What is a customer value proposition framework?

A customer value framework is a structured process that can help you pinpoint your value proposition by considering the relevant factors and elements that influence how valuable your customers see your product. While you can find many different suggestions for which framework to follow, three key elements of a value proposition are understanding who your customer is, how you’re different from your competitors, and how relevant and important your product is to customers. A customer value proposition framework gives you a methodological approach to determining your value proposition and offers solutions for integrated frameworks, such as Agile, that can help you manage feedback and continuous improvement. 

What are the 3 elements of a value proposition? 

Compelling value propositions often share key elements. A company starts by identifying and addressing its target audience. Then, it communicates how the brand, product, or service differs from competitors and how it relates to the target audience. 

1. Identification of target audience

To make sure its message is getting to the right customer, a company needs to identify its target audience. To pinpoint the target audience, it helps to analyze the following demographics:

• Age

• Gender

• Race

• Geographical location

• Education level

• Income

• Marital status

• Family size 

2. Differentiation

Communicating how a brand, product, or service differs from competitors helps customers and investors understand value. Ways that companies can differentiate themselves include:

• Offering unique products or services 

• Providing a superior customer experience

• Saving customers time

• Using quality materials in product construction

• Providing product guarantees or exceptional warranties

• Presenting an appealing visual identity (website, logo, etc.)

3. Relevance to customers 

Customers want to know how a brand, product, or service relates specifically to them. Companies can reassure customers by creating a website that excites—or inspires loyalty from—a particular audience. It’s also important to share how a product or service addresses a customer’s problems or pain points. 

How UX design helps in creating value propositions

When design focuses on user experience (UX), it helps meet the needs and address customers’ pain points. Key processes involved in UX design include:

• Design thinking: A process that involves identifying a customer problem, having empathy for the customer, coming up with a solution, developing and testing prototypes, and creating a final product

• Data analysis: A process in which companies analyze customer behaviors and other data to make better decisions

• Design iteration: The testing and improvement process that leads to a final product or service 

Related terms

• Prototype

• Product lifecycle 

• UX designer

• User story

• High fidelity

Getting started in value proposition design on Coursera

To learn more about UX design, consider enrolling in the Google UX Design Professional Certification on Coursera. You can gain greater knowledge of UX design concepts and explore the UX design process and UX research methods. This program is designed for beginners with no prior experience to gain job-ready skills for their first UX design role. Upon completion, gain a Professional Certificate that you can include in your resume or LinkedIn profile. 

professional certificate

Google UX Design

Get on the fast track to a career in UX design. In this certificate program, you’ll learn in-demand skills, and get AI training from Google experts. Learn at your own pace, no degree or experience required.

4.8

(81,415 ratings)

1,148,575 already enrolled

Beginner level

Learn More

Average time: 6 month(s)

Learn at your own pace

Skills you'll build:

User Experience (UX), Prototype, Wireframe, User Experience Design (UXD), UX Research, mockup, Figma, Usability Testing, UX design jobs