This article is an excerpt from the Shortform book guide to "Business Model Generation" by Alexander Osterwalder and Yves Pigneur. Shortform has the world's best summaries and analyses of books you should be reading.
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What exactly is a value proposition? Why is it important to provide unique value to your customers?
As the name suggests, your business’s value proposition is the value you provide to your customers in the form of products or services. When defining your value proposition, consider the nature of your product/service and how it is different from your competitors’ products/services. If you’re servicing the same customers, with the same needs, at the same price, you are not providing unique value.
Here are some things to consider as you define how you intend to offer value to your customers.
Defining Your Value Proposition
Your business’s value proposition outlines the benefits you intend to provide in the form of products and services. The authors state that successful value offers align with the needs of your customers and differentiate themselves from existing solutions.
When creating your value offer, consider these questions:
- Do you intend to disrupt the market with an innovative value offer, or do you intend to improve upon what’s already out there?
- What specific value do you intend to deliver to the customer?
- How will you adapt your value offer for each of your customer groups?
- What makes your value offer more appealing than that of your competitors?
(Shortform note: Osterwalder and Pigneur’s Value Proposition Design delves further into the topic of creating, testing, and improving your value offer.)
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Here's what you'll find in our full Business Model Generation summary :
- The nine elements that make up any successful business model
- Different ways you can combine these elements to create business model patterns
- Techniques you can use to generate innovative ideas
