5 Steps to Creating an Effective Value Proposition.

Creating an Effective Value Proposition customer value proposition

Imagine you are an Irish company in a technical industry that provides a niche product and/or service offering. You are striving to position your company for a strong pipeline of new projects or trying to build on your relationship with your customers, but you need to communicate clearly what sets you apart from the alternatives in the market. But how can you do this? By creating a strong value proposition.

A value proposition is essentially a statement that accurately outlines the market you are in, the value of your product or services and the unique benefits your customers can expect.

To use an example, your company offers design engineering services. You know you provide highly innovative solutions and are capable of working with leading OEMs. If only you could get the foot in the door you know you have an opportunity to do business. However there is existing competition; a company that has been in the industry longer than you, has multiple sites and has established a relationship with the OEM.

So will you ever really have a chance? Yes, you can by using your value proposition. Rather than saying what your competition is saying, your value proposition will identify why you are worth working with, why you are more valuable and why you don’t always have to compete on price to win business.



When providing technical products and services especially, you must distinguish the value you bring and identify why the benefits outweigh the costs. While some OEMs are looking at developing markets for low cost design and manufacturing, many still prefer to work with high end service providers for a reliable and good quality service because there is worthy value in it and you need to ensure they understand this value.

So how do you develop a strong Value Proposition? A value proposition must come from within the company to make it unique and reflect what you do. Asking yourself the following questions will give you the answers you need to create a strong value proposition.

 1. Who are you targeting?

A good start is to properly define who your target market is. Even if you currently supply to one industry, you can segment your target audience by location, job positions etc.

2. What do you actually do?

While it sounds like a simple question, this is where many companies struggle. Identify all your products and services and evaluate in detail how they solve your customers’ problems. What are the practical and emotional benefits you deliver? Often you will find a list of areas you are particularly strong in to help you accurately define what you do.

3.Why have you won business in the past?wining business

A good exercise is to take a number of customer projects you have worked on in the past and identify the reasons you won that business. The 80/20 pareto analysis rule commonly applies here whereby 20% of your customers determines 80% of your sales. This exercise allows you to focus on where you deliver the most value and why, contributing to your overall value proposition statement.

4. Who is your competition?

Performing a SWOT analysis on your competition will help you identify areas you are particularly strong in and areas you need to improve. It’s especially important to distinguish your company from the competition. Regardless whether your competition are world leaders or have manufacturing sites throughout the world, you still have something unique to offer that value proposition is of value to your customers.

5. What do your customers think?

Your perception of your company may not be what your customers perceive. I recently worked with a company who assumed their location in the west of Ireland was a weakness in the eyes of their customers however after carrying out an in-depth survey with their customers, their peripheral location never came up, and in fact with a number of customers they valued their close location in Ireland rather than working with companies overseas. Yon need to talk to your target audience and evaluate what they think of you, what they value and what areas they would like you to develop further.

By teasing out these areas listed above and analysing them you have a strong basis for creating a unique value proposition. Your value proposition statement takes time to build a compelling message that sets you apart and positions you to win more business. Before you begin sharing your value proposition, I recommend testing it on a few customers using a simple PowerPoint presentation. Taking their feedback into consideration and tweaking accordingly will ensure you create a value proposition that positions you positively in the eyes of your customers.

If you would like to discuss your value proposition further with IMS contact [email protected] for more details.