Insights · Business Strategy and Management
Customers do not buy a list of features
Claims such as 'quality', 'innovation' or 'excellent service' do little to explain why a customer should choose one provider over another. A value proposition must clarify the customer, the problem, the practical difference produced by the solution and credible evidence supporting that difference.
A value proposition specifies which customer problem a company addresses, for whom, what observable benefit it offers and why it merits consideration. A list of functions is not enough. Research by James C. Anderson and colleagues in Harvard Business Review emphasises demonstrating and documenting customer benefits in business markets. The promise must be clear, relevant and supported by evidence rather than by superlatives.
1. Start by choosing the right customer
Begin with a customer segment specific enough to analyse. Organisations differ by industry, size, urgency, purchasing process and willingness to pay. For an IT maintenance SME, the needs of a small office can be quite different from those of a multi-site business; treating both as one market makes the promise vague and the delivery harder to plan.
An IT maintenance provider may face very different priorities among customers: a small office might value quick response and predictable pricing, while a clinic places greater importance on uninterrupted service. Choose a segment whose problem matters, which can pay for the solution and whose requirements match the firm's actual capabilities. A priority segment does not preclude future expansion to other groups.
2. Understand the job the customer needs done
Customers buy progress, not just products. Invoicing software may be purchased to issue invoices, but its deeper value may lie in reducing administrative errors, highlighting overdue payments or freeing time for management. Interviews should explore what the customer is trying to achieve and which obstacles make that outcome difficult.
Interview customers about specific past events: when a problem emerged, what they tried, what was difficult, how much time was lost and which alternatives they considered. A jobs-to-be-done perspective helps explain the context of choice, but stated preferences should be checked against observed behaviour and actual purchasing decisions. One interview is evidence about that person's experience, not proof that an entire segment behaves in the same way.
3. Identify the costs and frustrations shaping the decision
Total customer cost includes more than price. Waiting, mistakes, training, support, switching suppliers and uncertainty all affect the decision. A fast online retailer that fails to communicate delivery changes may impose more inconvenience than a slower but reliable competitor. Identify which frustrations matter before defining the benefit.
For an online shop, delivery within two days may be less reassuring than clear tracking and prompt notification of delays. List the segment's three major frustrations and rank them by frequency, seriousness and impact on purchase decisions. Then select those that the company can reliably resolve. Features that do not address a meaningful source of friction rarely sustain differentiation.
4. Turn features into verifiable benefits
Move from features to outcomes. 'Automatic reports' is a feature; 'less time consolidating indicators' is a benefit; 'review prices and margins before month-end' is a business outcome. Use evidence, demonstrations and realistic commitments rather than generic adjectives or unsupported numerical promises.
Turn vague attributes into testable benefits. “Response within four business hours” can be checked against a service commitment and operational capacity; “unrivalled attention” cannot. A claim such as “30% less time preparing reports” requires actual measurement under stated conditions. Never invent a percentage for persuasive effect: a small, transparent pilot is better evidence than an unsupported promise.
5. Understand the alternatives customers consider
An alternative may be a direct competitor, an internal spreadsheet, a manual process or doing nothing. Compare the options that buyers genuinely consider using criteria that affect their decisions: total cost, risk, speed, support, reliability and integration into existing operations.
Compare the alternatives that the buyer genuinely considers, including inaction, internal workarounds and direct competitors. Evaluate total cost, risk, speed, convenience, adaptability and implementation effort. Avoid claiming superiority across every criterion. Credible differentiation is anchored in a specific capability that the organisation can demonstrate through a process, service level or measured outcome.
Practical example: from a vague description to a clear proposition
Consider the fictional equipment-service provider Oficina Clara. Its initial statement, 'we specialise in maintenance and provide excellent service', says nothing about whom it serves or the problem it solves. After investigating catering businesses, a stronger proposition could focus on preventing service interruptions through planned maintenance, clearly defined response commitments and documented follow-up.
In the fictional restaurant-maintenance example, owners report disruption from unforeseen equipment failures and uncertainty about repair schedules. A stronger proposition combines planned inspections with clear communication about intervention times. The offer still needs testing: any stated response time must be operationally feasible and its conditions explained. It is not a claim about real customer results.
6. Test behaviour, not just stated opinions
Do not call a value proposition validated simply because interviewees like the wording. Look for behavioural evidence: qualified enquiries, demo requests, pilot adoption, proposals accepted, repeat purchases and reasons for refusal. Compare alternative messages with a clear method and avoid drawing conclusions from very small samples.
Test what prospective buyers do, not only what they say they like. An SME might compare two page messages with similar offers and prices: one lists features, while the other explains the reduced risk and practical support provided. A small exploratory programme of ten to fifteen interviews followed by a paid pilot may uncover useful patterns, but neither sample size nor subjective feedback guarantees representativeness.
7. Align price, experience and communication
A promise of close support requires adequate people and response processes; a promise of rapid delivery requires operational capacity; a low-price position requires sustainable costs. Pricing, communication and actual customer experience must reinforce each other, or the proposition creates expectations that the business cannot meet.
Marketing, sales and operations must agree on the promise and its limits. When an advert promises something that the service team cannot deliver, differentiation becomes a source of frustration. Sales staff should explain the promise in plain language and adapt examples to the target segment, rather than merely memorising a slogan. Price, delivery experience and communication should reinforce the same value.
A straightforward structure for a value proposition
A useful working sentence is: 'We help [specific customer] achieve [relevant outcome] through [solution or approach], with [credible differentiating benefit].' It need not appear literally on the website. Its purpose is to test whether customer, problem, outcome, difference and proof are sufficiently clear.
A practical formulation for the fictional restaurant segment is: “We help small restaurants reduce uncertainty about equipment maintenance through scheduled inspections and clear communication about service times.” Ask a potential buyer to describe that offer in their own words. If the person cannot identify the benefit or mistakes the conditions, rewrite the proposition before expanding the campaign.
Measure whether the market recognises your value proposition
Measure recognition through qualified conversion, loss reasons, time to decision, margin per sale, retention and referrals. The right question is not only whether more people respond, but whether the business attracts customers who value what it can profitably deliver.
Monitor qualified enquiries, proposal conversion, margin and retention. If conversion improves while margins fall, the message may be relying too heavily on price; if enquiries increase but few qualify, the targeting may be wrong. The best value proposition is not necessarily the most elaborate. It is the one customers understand, regard as relevant and recognise in the actual experience.