What is Customer Value Proposition?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 04 October 2019
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The customer value proposition include the overall advantages or benefits that a customer derives from doing business with a particular vendor. Sometimes referred to as a value add proposition, the concept addresses not only basics such as price for the good or service, but also related issues such as the quality of service and support provided to the client, prompt delivery of those products, and the relationship that is established between the customer and the supplier.

Many of the elements that are included in a customer value proposition are designed to attract customers by offering them something that is not readily available from the competition. Often, these added values are little extras that are hard to obtain with that particular product or service. For example, the offering may include a customer service value that involves access to customer support personnel seven days a week, twenty-four hours a day. If the competition only offers access to customer support during limited hours five days a week, this is highly likely to catch the attention of prospective clients, as well as entice existing clients to not stray from the fold.


The exact composition of a customer value proposition will vary, depending on the industry in question, and what the competition offers as a matter of course. This means that the proposition will help a customer confirm that the vendor offers everything that is available from the competition, plus a few benefits that are highly unlikely to be found elsewhere. Often, these value added services are extended at no additional cost to the customer, which serves to make them even more attractive.

A well-crafted customer value proposition can often make it possible to not rely solely on price in order to increase the client base. Offering little extras that are favorable to customers makes it less likely that a competitor can pull customers away by simply offering them a lower price. If the client makes regular use of those extras that are hard to find elsewhere, the price will normally have to be significantly lower than what they currently pay before they will consider the other offer. Even then, the good will and close working relationship that a solid customer value proposition creates will likely result in the customer contacting the provider, making it possible to prepare a counter offer and retain the business.

As a marketing and sales tool, customer value propositions are an invaluable means of breaking out of the mainstream of the competition and distinguishing a business as a leader in a given industry. The actual process of creating and enhancing the customer value proposition is an ongoing process, since competitors are likely to begin offering the same type of enhancements over time. This means that a company must constantly be looking for ways to improve the value of customer benefits in order to remain competitive.


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