I’ve heard that a good value proposition is critically important, but what is a good value proposition? My name is Barry Horwitz, and I’m a growth strategy consultant.

Elements of a Strong Value Proposition

The key to being successful in the business is to have a really powerful and strong value proposition. A value proposition has several key elements. The main one is the problem or the opportunity. What’s the issue you solve? What’s the new thing you make possible that wasn’t possible until now? Why is that important? Why is it something people need to help them?

The problem also has to align with a specific audience. Who are the people that have this problem or who will jump on this opportunity? How do you find them? Are they unique sets of people you can reach in various ways? How do you show that you know who they are?

Companies that Have Great Value Propositions

The problems in a specific audience are the keys to your value proposition. For example, you may have heard of Dollar Shave Club. They identified the issue that the main wet razor brands have been getting more and more expensive, and people are starting to be concerned about pricing. So their value proposition is clearly stated: “A great shave for a few bucks a month”. What are they really trying to solve? There are a lot of young men who shave every day and are concerned about paying a lot for replacement plates. The business model is to get them less expensive blades frequently and solving that problem turns out to be pretty compelling.


Another example is Zipcar. Zipcar is a different value proposition than, say, your standard rental car or other ways of getting around: “Wheels when you need them.” If you live in a city you don’t want to have the expense of storing a car that you don’t use very often, these are cars you can rent by the hour. You can reserve quickly online. “Wheels when you need them.” It’s a very straightforward value proposition. It’s changed the way rental cars are done for an audience that didn’t used to have that option.


Finally there is another approach you can think about Uber, a pretty well-known one. The value proposition there actually is on two sides. On the one side is the riders: tap your app and a car arrives! It knows where you want to go. It has a GPS that gives the driver help in getting you there and the payments are already taken care of. There’s no cash necessary. The other side of that value proposition is the value proposition that causes there to be uber drivers. If you have a car and a smartphone and a little spare time, you can make some extra money. That’s a value proposition for becoming a driver.

A value proposition has the problem or the opportunity, a specific audience that cares and will pay for it, and all of those pieces need to come together. Who cares? What is the problem? Why is your solution the one that people will pay for? That’s what makes for a strong and compelling value proposition.