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Customer Value Proposition Definition

“Customer value proposition refers to the value a company promises to deliver to customers should they choose to buy their product. A value proposition is also a declaration of intent or a statement that introduces a company’s brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business.” – as defined by Investopedia.

Customer value proposition is an excellent method to introduce a brand to prospective buyers by making a strong first impression. A clear customer value proposition explains how a product or service will enable a customer to solve a problem. It will list out the benefits that customers can expect from the product, and importantly why a customer should buy your product over other similar products in the market. 

To create a customer value proposition, brands are going the extra mile by researching customer’s needs and expectations. Brands are generating customer insights using customer opinions and feedback available on social media and other online forms. 

Customer Value Proposition Advantages

1. Gives direction:

A clear customer value proposition gives direction as it defines the target audience up-front and has plans or solutions to satisfy customer needs. Customer value proposition helps to focus on offering products and services that are relevant and attractive to the target customers, thereby saving time and effort in building a product that customers won’t buy. 

2. Effective Marketing:

As customer value proposition sets clear directions on the kind of products offered and the customers targeted, it makes easy to plan marketing efforts that can generate greater results. The marketing team can focus on the most relevant channels and vehicles of marketing that bring in the best advantages. 

3. Understand Competitive landscape:

Organizations that want to create a compelling customer value proposition need to understand the competitive landscape by researching the competitors and the products that they offer. This research helps to differentiate yourself from the competition. 

Customer Value Proposition Example

See the value proposition statement of Spotify – in an articulate manner it tells that Spotify is all about bringing music into your life by saying ‘music for everyone’. It sticks to the customer value proposition by delivering what it says – by being available on-the-go either on your smartphone or on a desktop.

Spotify is known to offer five primary value propositions: Accessibility, customization, pricing, performance, and brand/status. Spotify enables customization which allows customers to search their favorite songs and create playlists. In terms of the pricing value proposition, it offers a free version as well as a premium version. Spotify has partnered with many brands such as BMW, Reebok and Volvo to increase product awareness.