What is a Value Proposition?

There are lots of variations on how people view or define a Value Proposition – some very simple, some far too complex, and some highly technical. I’ve included here some of what I think are the best (and simplest) and some links to others that are more complex and technical but perhaps worth a look.

I’ve started with my own (which has been distilled and refined over the years)…


 “A Value Proposition should define the unique way in which a business or brand delivers value for its customers. It should explain the competitive advantage - why customers should buy from that brand rather than another; and it should always be easy to understand and clearly evidenced.”

Andy Criddle


The phrase “value proposition” is arguably credited to Michael Lanning and Edward Michaels, who first used the term in a 1988 paper for the consulting firm McKinsey and co. They defined value proposition as...

 “a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits”.

Michael Lanning and Edward Michaels – McKinsey and Co.


A model that identifies the customer's reason to buy in a succinct relative value and differentiation summary is offered by Winer and Moore.

"For (target customer) who (need statement), the (product/brand name) is a (product category) that (key benefit statement/compelling reason to buy). Unlike (primary competitor alternatives), (product/brand name) (primary differentiation statement)."

This framework identifies the added value and product purpose in filling a market gap better than with recognition of the alternatives available.

Winer and Moore.


Neil Rackham believes that...

 “a value proposition statement should consist of four main parts: capability, impact, proof, and cost [that is, the price a customer is expected to pay.”

He also correctly identifies that: “Organizations do not directly communicate the outputs of the value proposition creation process (i.e., the value proposition statement and template) to external audiences; value proposition statements are internal documents, used by organizations as a blueprint to ensure that all the messages they communicate, inside and outside the organization, are consistent.”

Neil Rackham


Michael Skok in Forbes offers the following definition of a value proposition as...

 “a positioning statement that explains what benefit you provide for who, and how you do it uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives.”

He then goes on to suggest a slightly complex sounding process to approach building a value proposition that you may consider worth a look if you have the time… click to link.