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What Value Does Your Business Offer? The Value Proposition

The Value Proposition is the tangle and intangible aspects of what your business offers. It is comprised of your product or service and the additional value and benefits your customers derive from it. In short, it is the primary reason the customer chooses to pay for what you are selling. The Value Proposition is the first segment in the Business Model Canvas or "BMC" (see blog post here for further information on the BMC).

See the following video for a brief explanation using a well-known company, Starbucks:

Types of Value Propositions:

There are a variety of different value propositions that products and services may have. As a business owner, your business success is largely determined by how well your value proposition satisfies customers’ needs. Your product or service may have one primary value proposition, or it may have several. Listed below are just some of the value propositions your product or service may offer.

See if you can come up with examples of each as you read about them.

  • Newness: Some value propositions satisfy an entirely new set of needs that customers previously didn’t perceive because it wasn’t ever an option. A customer who buys your product may simply do so because it is new.

  • Performance: Improving product/service performance is a common way to create value. Essentially, you are offering a better version of an already-established product or service.

  • Customization: Tailoring a product or service to the specific needs of a customer or customer segments.