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2.5: Value Proposition Examples

  • Page ID
    16186
  • What you’ll learn to do: evaluate examples of value propositions

    If you were asked to evaluate the solution to an easy math problem, such as 24 + 17 = 45, you could definitely say whether it’s right or wrong. If, on the other hand, you were asked to evaluate a painting by a modern artist and judge it “good” or “bad,” you would have to make a judgment based on your own preferences and, perhaps, after reading some reviews by experts or others (who probably wouldn’t agree). Evaluating art is akin to evaluating a value proposition—it’s definitely a subjective process, and others may disagree with you. That said, below are a few pointers that can help you.

    It is easy to recognize when a value proposition is bad:

    • If it is so general or universal that it doesn’t articulate unique value, then it likely isn’t very good. (For years Tony the Tiger promoted Kellog’s frosted flakes saying, “They’re grrrrreat!” It’s a cute catch phrase for a tiger, but it’s not a value proposition.)
    • If a value proposition has so many words that you need to read it twice—or worse, you stop reading and move on—then it’s bad. As noted in the Quick Sprout infographic from the previous reading, it should take five seconds or less to read a value proposition.
    • If the value proposition does not provide clarity about the offering to the target market, then it isn’t providing value. The target customer should understand exactly what is promised.
    • If the value proposition for an offering mimics the value proposition of a competitive offering, it isn’t good. In the technology industry, many critics have poked fun at Microsoft for imitating Apple’s simple marketing language and presentation style. No matter how compelling the value proposition for an offering is, copying it for a competitive offering doesn’t make sense or work. An offering can’t be unique if it’s exactly like something else.

    In this section, you’ll get to review some value propositions that are quite good (in our view). As you read them, them think about what they are doing right and how they could be improved.

    The Value Proposition in Action

    Let’s take a look at some real examples and evaluate them. Are they clear, compelling, and differentiating? Keep in mind that you may not be the target market for all of these examples. Your role as a marketer is to evaluate them from the perspective of the target customer.

    Pinterest

    This value proposition doesn’t offer a lengthy description of what Pinterest is and how it works. It simply states the benefit Pinterest provides to its users.

    Notice the use of the phrase “people like you.” The value proposition connects you to the site’s other users through your own interests. It implies that a friendly community of “people like you” awaits you and is interested in helping you.

    Is the value proposition sufficiently clear to you? Does it give you enough information to know whether the offering is of interest to you?

    The greatest challenge in creating an effective value proposition is striking a balance between being clear and communicating enough value.

    Skype

    The value proposition first highlights Skype’s broad use, which is an important feature for its network-based approach.

    Next it describes the offering. Skype provides more information than Pintarest does about what its offering is—and it highlights the fact that it’s free. Pinterest is also free, but doesn’t disclose this in its value proposition. Is one approach better than the other? Why might a company want to emphasize that its product is free while another does not? In this case, it’s probable that Pinterest conducted research and learned that users expect Pintarest to be free, since that’s the case with many other social sharing sites. In contrast, since Skype is competing with traditional paid services like cell service providers, free access is an important differentiator.

    Again, notice the use of the word “you” in the value proposition.

    Salesforce.com

    The value proposition for Salesforce.com includes the acronym CRM, which stands for customer relationship management software. Not everyone knows this acronym, but Salesforce is confident that its target customers do, and it’s betting that they are seeking such a system to improve sales management processes and results.

    The value proposition cuts to the offering’s core benefit—improved sales results—and highlights its strong (“world’s #1”) market position.

    Uber

    A screenshot of Uber's website. It features a large photo of a woman stepping out of a car and the words Your ride, on demand. Transportation in minutes with the Uber app.
    Source: Uber.com/

    This value proposition is very simple, but it says enough about the value that you may want to learn more about how it works.

    In just a few words, the value proposition explains that you can get a ride when you need it using your phone. It emphasizes convenience in a number of ways by using the phrases “on demand” and “in minutes.” There is also a subtle use of the word “your.” Uber provides your ride. You are in charge.

    Coffee Shop Marketing

    Starbucks is a powerful global brand that brings with it a sense of being cool and new. A stodgy coffeeshop brand in the United Kingdom had to find a different value proposition to convince coffee drinkers that they were worth another try. Watch the video, below, to see what they tried:

    Click here to read a transcript of the video
    >> Given all this coffee-powered cash flying around, you could be forgiven for thinking that setting up a coffee shop chain would be a licence to print money. But you'd be wrong. As the noughties dawned, coffee drinking seemed to be deeply entrenched in the British lifestyle.
    
    >> I got very excited back in 2003 when I saw the latte became a part of consumer price index. And for me that was a sign that this market was really here. That this branded coffee product was part of British lifestyle.
    
    >> Despite this, none of the brands was turning a profit because coffee shops only make money if they can control the fixed costs, like their rents. One company in particular was struggling. Coffee Republic had been the brainchild of brother and sister team, Bobby and Sahar Hashemi. They had grown their business quickly since 1995, taking on locations with astronomical rents where footfall would be high, but their brand was not strong enough to pull in the punters.
    
    >> They were a brand that was wanting to be a Starbucks, but they didn't have the same brand pull of Starbucks, they didn't have the financial covenants, they didn't have the financial clout of Starbucks, so they were going head-to-head with Starbucks on the same premises and actually perhaps a bit of hubris, paying above and beyond what they should have paid.
    
    >> Rents matter because a third of us are more likely to choose a coffee bar based on its convenience than any other factor, meaning landlords can charge a fortune for prime sites.
    
    >> In the land grab, we ended up acquiring sites that, because of the competition or because of the high rents, have not been profitable for us.
    
    >> Coffee Republic was eventually forced into administration. Bobby Hashemi stepped down and today the company is a fraction of the size it once was. The UK coffee market had boiled down to three big brands - Starbucks out in front, with Costa and Nero bringing up the rear. But the landscape was about to change.
    
    >> In the mid 2000s, Costa was a mediocre brand. It was a brand that was a bit lost. It was stuck in the middle, really, it was in no-man's land. It wasn't... It didn't have the coffee credentials of Caffe Nero, it didn't have sexy brand image of Starbucks. The arrival of a new management team in 2007 was actually a pivotal moment in Costa's development. It really was the moment that they put the foot on the accelerator.
    
    >> One of the new managers who put his pedal to the floor was marketing whizz Jim Slater. In 2008, he hatched a plan that would hit Starbucks where it would hurt.
    
    >> There was a general perception amongst the public that all coffee was the same and it clearly isn't. So we commissioned a blind taste test and the results were stunning.
    
    >> It was a robust and well-certified study, and from that we felt confident enough to put advertising out that said that seven out of ten coffee lovers prefer Costa.
    
    >> When the ad campaign was first launched, Howard Schultz seemed undaunted.
    
    >> We serve about 2 million customers a week here in the UK. We are the leader and we will maintain our leadership position.
    
    >> But Costa's adverts had gone for Starbucks' jugular.
    
    >> We wanted to be fairly blatant, and lines like, "Sorry, Starbucks, the people have voted" were quite hard-hitting at the time and they proved very effective.
    
    >> Starbucks was unnerved, and complained to the Advertising Standards Authority.
    
    >> We thought they would complain, and that's why we had to make absolutely sure that the research was totally robust, perfectly legal and would stand to any kind of challenge.
    
    >> The ASA upheld Costa's claims despite Starbucks' contention that the blind test only used cappuccinos and that the test did not prove that Starbucks customers preferred Costa's coffee.
    
    >> There were some level of challenge around the accuracy of it, but that was all upheld and was found to be true, and I guess beyond that, you should probably ask Starbucks.
    
    >> They are very entitled to say what they say, and actually, that's fine, because we've got to concentrate on what we do. We've got to concentrate on our customers and making our business the best it can be.
      
    >> I don't think Starbucks are at all frightened of us. You know, we're a microscopic blip on their proverbial posterior.
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    • Value Proposition Examples. Provided by: Lumen Learning. License: CC BY: Attribution
    • Outcome: Evaluating Value Proposition Examples. Provided by: Lumen Learning. License: CC BY: Attribution
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    • Screenshot Pinterest Website. Provided by: Pinterest. Located at: https://www.pinterest.com/. License: All Rights Reserved. License Terms: Fair Use
    • Screenshot Skype Website. Provided by: Skype. Located at: http://skype.com/. License: All Rights Reserved. License Terms: Fair Use
    • Screenshot Salesforce.com Website. Provided by: Salesforce. Located at: https://salesforce.com/. License: All Rights Reserved. License Terms: Fair Use
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