How to write a value proposition

As a small business owner, standing out in today's competitive market can feel like an uphill battle.

With so many companies vying for customers' attention, how do you make sure people understand the unique value your business offers? That's where a strong value proposition comes in.

For small businesses, a well-crafted value proposition is especially important. It helps you set yourself apart from competitors, gives future customers clarity about what you offer and can give you a competitive edge in a crowded marketplace.

Whether you're a local café, a tradesperson or an online shop, a value proposition helps you clearly articulate what makes your business special.

In this blog, we'll guide you through the process of creating an effective value proposition. Even if you're new to marketing, this step-by-step approach will help you craft a core message that attracts and retains the right customers for your business.

What is a value proposition?

A value proposition is a clear and concise statement that explains the unique benefits your business offers to customers.

It highlights how your product or service solves a specific problem or fulfils a need, and why it's better than competing options.

A strong value proposition communicates your business's key strengths and helps potential customers quickly understand why they should choose you. In essence, it's the promise of value your business delivers.

The key elements of a value proposition

A strong value proposition is built around four key elements:

• Addressing the customer's problem

• Offering clear benefits

• Differentiating your business from competitors

• Providing proof to back up your claims

By focusing on these four elements, you can craft a value proposition that not only captures attention but also drives action. Let's break them down.

1. Clear customer problem or need

The foundation of a successful value proposition is understanding your customer's problem or need. If you can clearly identify the issue your target audience is facing, you can show how your business offers a solution.

Prospective customers want to know how you can make their lives easier, more efficient or more enjoyable. For example, if you run a local bakery, your customers may be busy commuters looking for a quick, high-quality breakfast on their way to work.

By focusing on their need for convenience, you can craft a message that resonates with them.

2. The benefit you offer

Once you've identified the customer's problem, it's time to explain the specific benefits your product or service provides. What does your customer base gain from choosing you?

Make sure to communicate this in clear, simple language without using jargon or over-complicating the message. Instead of listing features, focus on outcomes – how will your offering improve the customer's experience?

For instance, if you own a cleaning service, don't just say you offer "professional cleaning". Highlight the benefit: "We save you time with reliable, spotless cleaning for your home or business."

3. Differentiating yourself from competitors

To truly stand out in a crowded market, your value proposition needs to explain why your business is different and better than competitors.

This is where you highlight your unique selling points (USPs). Do you offer faster service, better customer support or more affordable pricing?

For example, a local online clothing boutique might set itself apart by offering free next-day delivery in the UK, which sets it apart from larger retailers with longer shipping times. Identify what you do better than others and use that to your advantage.

4. Proof or evidence

Finally, to build trust and credibility, you should include proof that backs up the claims in your value proposition. This can come in the form of customer testimonials, reviews, case studies or even statistics that demonstrate your results.

For example, if you run a plumbing business, showcasing reviews from satisfied customers or highlighting that "95% of emergency jobs are completed within 24 hours" can add weight to your proposition. Proof reassures potential customers that you can deliver on your promises.

Steps to writing your value proposition

Crafting a value proposition that resonates with your customers is best done with a step-by-step approach. Here's how to write a clear and effective value proposition for your small business.

Step 1: Understand your audience

The first step in writing a value proposition is knowing exactly who your target customer is. Without a clear understanding of your audience, it's difficult to address their needs or speak their language.

Start by defining your ideal customer based on demographics, behaviours and needs. Are they young professionals, busy parents or small business owners themselves?

To get an even clearer picture, create customer personas – fictional profiles that represent different segments of your target market.

For example, if you own a landscaping business, one persona might be "Helen", a working parent who needs her garden maintained but has limited time. Understanding her pain points (lack of time, desire for a beautiful backyard) will help you tailor your value proposition to her specific needs.

Step 2: List the benefits of your product or service

Next, make a detailed list of the wide range of benefits your product or service offers. What problems do you solve, and how does your business make life easier for your customers?

Remember, benefits are different from features – focus on what the customer gains from using your service, not just the characteristics of the product.

Once you have your list, prioritise the benefits that matter most to your customers. Think from their perspective: What would make them choose you over a competitor?

For instance, if you run a small IT support business, a key benefit might be "24/7 availability to reduce your business's downtime". This benefit speaks directly to the customer’s need for reliable, uninterrupted operations.

Step 3: Identify your unique differentiators

To stand out, you need to highlight what sets you apart from competitors.

Start by researching similar businesses in your area or industry. What do they offer, and how can you be different or better? Maybe your business offers faster delivery, exceptional customer service or specialised expertise that competitors lack.

For example, if you own a local catering company, your differentiator could be that you source all your ingredients locally and offer customisable menus for dietary restrictions – an attractive option for eco-conscious customers or those with specific dietary needs.

Identifying these USPs will help you position your business more effectively in the marketplace.

Step 4: Create a clear, concise statement

With your audience, benefits and differentiators in mind, you can now create a simple, compelling value proposition. Here's a helpful formula to follow:

"We help [target customer] by [solving a specific problem] with [product/service benefits]."

For example, a local bakery might write: "We help busy professionals enjoy fresh, high-quality baked goods on the go with our convenient online ordering and same-day delivery service." This statement is clear, focuses on solving the customer's problem and highlights the benefit and differentiator.

Keep your value proposition straightforward, avoiding complex language or jargon. The goal is to make sure any potential customer can instantly understand the value your business provides. A short, simple statement that's easy to grasp will have a much bigger impact.

Refining and testing your value proposition

After crafting a succinct value proposition, you must refine and test it to make sure it resonates with your target audience. Here's how to get feedback and give your value proposition the biggest possible impact.

Get feedback

One of the best ways to improve your value proposition is by seeking feedback from real customers and peers. Start by reaching out to existing customers through surveys, asking them how they perceive your business and what value they think you offer.

Questions like, "What made you choose us?" or "What do you see as the main benefit of our service?" can help you gauge whether your value proposition lines up with customers' expectations.

You can also gather informal feedback through conversations or by monitoring online reviews and social media comments. Pay attention to how customers talk about your business – this language can help you refine your marketing messaging to reflect how people naturally describe the benefits they experience.

Don't hesitate to ask trusted peers or mentors in your industry to review your value proposition and provide insights on its clarity and effectiveness.

Test different versions

Once you've gathered feedback, you may want to test different versions of your value proposition to see which one resonates best with your audience.

A great way to do this is through A/B testing on marketing materials, such as your website, email campaigns, brochures or advertisements.

For example, you could test two different value propositions on your homepage and track which version leads to more customer enquiries or sales.

Alternatively, if you're running online ads as part of a digital marketing strategy, try using different wording or benefits in separate ads to see which attracts more clicks or engagement.

By testing and measuring the performance of each version, you can fine-tune your value proposition to make sure it's as clear, compelling and effective as possible.

This kind of message testing is a key step that allows you to optimise your value proposition over time, ensuring it consistently appeals to your target audience and helps drive growth for your business.

How long does a value proposition need to be?

There's no hard-and-fast rule, but it's worth trying to write a headline, a supporting subheading or paragraph, and three bullet points listing your product or service's key features and functional benefits.

Online travel agent TravelLocal does this well:

A better way to book your perfect holiday

Tailor-made by trusted local travel agents

At TravelLocal, we believe the greatest holidays take local know-how. The kind you get from actually living somewhere.

That's why we connect you with the best local travel agents based in your destination. They create trips tailor-made just for you.

And because it's a TravelLocal holiday, you have the reassurance of 100% financial protection and 24/7 support.

A slight variation comes from east London coffee roastery Perky Blenders, whose super-impactful value proposition melds the supporting paragraph and bullet points:

Coffee at home

Letterbox friendly.
Coffees to suit all tastes.
We grind it how you like it.
Sustainable packaging.
Great customer service.

A further noteworthy example belongs to parking app JustPark, whose solution to a particular pain point is articulated using a blend of functional and emotional benefits:

Find parking in seconds

Choose from millions of available spaces, or reserve your space in advance. Join over 3.5 million drivers enjoying easy parking.

Wherever, whenever
Choose from millions of spaces across the UK
Find your best option for every car journey

Peace of mind
View information on availability, price and restrictions
Reserve in advance at over 45,000+ locations

Seamless experience
Pay for JustPark spaces via the app or website
Follow easy directions and access instructions

Where should value propositions be used?

First and foremost: your website. Make it front and centre. It's designed to be shared with customers directly, so roll it out across any other marketing channels too.

What's the difference between a value proposition and a tagline?

A value proposition explains, in relative detail, how your product or service is relevant, why it's valuable and how it's different from everything else that's out there.

A tagline, by contrast, is a catchy phrase associated with a brand: L'Oréal's "Because we're worth it", or Nike's "Just do it". In other words, a brand accessory.

That's not to say taglines can't articulate elements of the value proposition – Airbnb's "Belong anywhere" being a stand-out example.

Relevant resources

• What is a business USP and how do you build one?

• Five tips for conducting brilliant competitor analysis

• Why your competitors are also your friends