What is a Value Proposition?

Malcolm Tatum

Just about every consumer likes the idea of a value proposition. Essentially, a value proposition is the something that helps to provide some form of additional satisfaction to the client as a result of using a good or service over the products offered by a competing organization. Typically, the value proposition is provided in the form of quality customer service, the ability of the product or service to be slightly adapted to the demands of the customers, or some added feature that is unique to the brand. Here are some examples of value propositions that are often used to distinguish a company within a given industry.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

Setting up an effective customer service department is one way of establishing a value proposition for new and existing clients. All other factors being equal, the presence of effective client support can make the difference between a high level of customer satisfaction that keeps clients coming back for more, and a company that quickly becomes yesterday’s news. Staffing to eliminate long hold times and delays in responding to customer emails will go a long way in building customer loyalty and distinguishing the company in the minds of the general public.

Functionality of a product or service can also make a big impact when it comes to value proposition. For example, one company may offer a cell phone that offers an expanded address book at no extra charge, whereas another company may have the same phone for sale, but without the expanded address book. For customers who like to get the most for their money, chances are people will buy from Company One, rather than pay the same prices for Company Two’s smaller address book offering.

Another method of enhancing the value proposition of goods and services is to provide some options that help the product to be more appealing to each individual customer. This can be something as simple as providing a variety of colored shells for a line of cell phones, or providing the ability to record a personalized greeting for attendees entering a conference call. The value proposition in this case has to do with allowing the customer to begin to own the good or service, and not just a consumer. The more the client owns the good or service, the stronger he or she will identify with the company. This helps to strengthen customer loyalty, as well as enhance the chances for good word of mouth recommendations.

The wise use of a value proposition can help any company gain a prominent place among the consumer options within a given industry. As the value proposition helps to set the company apart from the competition, there will be intangible business results, such as promotion of the company by loyal customers, and tangible business results, like a larger client base, more sales, and improved revenue in general.

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Discussion Comments


Many of us live our lives constantly weighing our own personal value propositions. for example, if you decide to shop at an expensive, family owned grocery store rather than the local Wal Mart, you accept the value proposition of better service or fairer wages for employees over cheaper prices for yourself. While no one actually made the proposition to you, it still is one you made to yourself.


Please can any one help to give me tips on setting up a super quality control unit in a financial institution?

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