What is a Customer Value Proposition?

A strong customer value proposition (CVP) is one of the most fundamental elements of value selling. A clear, differentiated, and quantifiable CVP effectively communicates the value of your offerings to customers in a way they can understand and that is relevant to them.  The following blog post answers common questions about CVP, including what it is, why it matters, and how to craft an effective customer value proposition.

What is a Customer Value Proposition (CVP)?

Your customer value proposition (CVP) clarifies the value customers will gain from using your product or service. According to Steve Thompson, author of The Irresistible Value Proposition, a customer value proposition is a “compelling message that will make the customer want what you’re selling now.” A customer value proposition can further be defined as an impact based on the desired outcomes of the customer. A well-crafted value proposition will clearly convey the total value that your product or service will deliver in terms of the customers’ specific needs and challenges. It shows customers how your solution will make their life easier. 

What is the Purpose of a Customer Value Proposition?

The goal of a customer value proposition is conversion. With so much competition for your target customers’ attention, a solid customer value proposition helps you quickly capture interest by clearly and succinctly demonstrating to customers how your offerings benefit them. Helping customers discover your value drives their action:
  • It motivates the customer to buy quicker
  • It motivates the customer to want a bigger deal
  • It wins business without competing on price

How Do You Write a Great Customer Value Proposition?  

Given the importance of a great customer value proposition, knowing how to craft a compelling proposal is key to the success of your value-selling strategy. A customer value proposition should clearly answer the following questions:
  • Why should your customer care?  
  • Why should they choose your solution over a competitor?
  • What will you deliver for your customer? 
  • Why now? 
To answer these questions effectively, your CVP needs to be clear and understandable, relevant, quantifiable, differentiated, and linked to key decision-makers. We’ll dive into each of these elements in the next section. 

Elements of a Well-crafted Customer Value Proposition 

A CVP needs to have all of the following elements to ensure that the statement resonates with customers and achieves your objectives.

1. Clear and Understandable

A CVP should use clear and easy-to-understand language to convey the value of your solution. To create an easy-to-understand customer value proposition, you need to understand your customer’s business and write in your customer’s language.

2. Relevant

A CVP should be structured in the context of the customer’s situation and focus on the specific outcomes they hope to achieve. In other words, link your customer value proposition to your customers’ business issues, initiatives, and politics. Your customer value proposition should be a shared vision co-created with the customer. 

3. Quantifiable 

Ensure your value proposition is comprehensive by leveraging both qualitative value and outcomes (such as customer success stories and differentiators) and quantified outcomes.  Include the metrics that matter most to your customers. 

4. Differentiated

Consider your customer’s alternatives when positioning your value proposition. What are the most realistic next best alternatives, what about these alternatives align to your customer stakeholder’s value drivers, and what are you doing to mitigate the risk of the alternative?  Your customer value proposition should hIghlight your incremental value to your customer’s most likely alternative.

5. Linked to Key Decision Makers 

Finally, a strong customer value proposition speaks to all of the key decision-makers involved in the evaluation and buying process of your solution. What does each stakeholder value the most from the proposed solution? What stakeholders will advocate and help sell internally? 

Example of an Effective Customer Value Proposition in Action 

The following is a simple template for developing compelling outcome-based proposals. Notice how the proposal starts with the customers’ goals, and each section contextualizes the deal for customers in terms of what it means for them.  Effective Customer Value Proposition Here’s an example in action using a customer (ABC Company) seeking a software product:

1. State the Overall Value Proposition – Clearly and Succinctly 

This is a clear, succinct summary of what the customer will gain from the transaction. It’s easy to understand and digest quickly. 
Enable ABC Company to develop and deploy business critical applications faster with greater uptime. 

2. Validate the Customer’s Desired Outcomes

This example immediately aligns with the customer’s quantifiable objectives, setting the stage for demonstrating how the offering will solve these specific challenges. 
Outcomes Important to ABC Company 
  • Deploy new application within 3 weeks versus 4 months 
  • Increase uptime to 99.999 versus the current 97.35 immediately 
  • Deploy at least 3 new applications in Production by end of 2017
  • Complete application updates “hot” with zero downtime 
  • Automated scaling to meet peak customer demand
  • ABC Company manages platform with current staff by 9/17
  • ABC Company develops new applications with current staff by 12/17. 

3. Translate Outcomes Into Key Deal Levers

From there, the presentation transitions to directly mapping the solution’s value to the customer’s desired outcomes.  chart mapping value to the customer’s desired outcomes

4. Share What is Important to You as the Vendor

Important to Us in a Deal
  • Deal closes by 3/24 in order to support customer deadlines
  • Longer term (3 year) deal with larger upfront commitment
  • Agile Cloud Platform becomes customer platform of choice 
  • Customer Success Manager assigned full-time 
  • Business Critical Support to achieve uptime goals
  • Public visibility of our work (e.g., case studies) 

5. Quantify Past Value Delivered 

The next slide shares specific, concrete examples of similar results the solution has achieved for similar organizations, highlighting the metrics the customer values most. 
Major Retail Store 
  • 50+ applications in production in less than 1 year
  • 600+ developers using the platform in less than 1 year
  • New applications launching weekly
Major Telecom
  • 10+ business-critical applications in production in 6 months 
  • Deployment and provisioning is 80% faster
  • 90% improvement in scaling factors
  • Customer Satisfaction improved 43% in first 3 months 
  • Zero downtime 

6. Provide Multiple Acceptable Options 

The next slide gives the customer options and visibility to help manage uncertainty and reduce perceived risk.  customer options chart

7. Summarize and Anchor

The summary clinches the customer value proposition by recapping the discussion and re-centering on the customer’s desired outcomes. customer value proposition summary chart


For more information on customer value propositions, we invite you to schedule a demo or contact our team of experts. We are here, ready to help.  


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