What is a Customer Value Proposition?

We are all familiar with this term, however, because so few organizations actually manage to define and clearly articulate their unique (and differentiating) customer value proposition, it’s worth taking a moment to explore this important concept. In fact, your customer value proposition is more than a concept – understanding what will attract your customer to your company and what will compel them to do business with you are critical elements for the ongoing success and growth potential of your enterprise.

Let’s take a closer look.

What does your customer want from you? Is it a thing?  Is it a thing delivered in a very specific way? Is it to feel a certain way when they interact with you and/or when they use your products or services? Is it all of the above? If your goal is business success then you need to know the answer to these questions.

Once you do, you can develop your plan for giving current and future customers what they want, how they want it, in a way that makes them feel the way they want to feel.

This magic formula is your customer value proposition.

A clear and compelling customer value proposition helps you by creating a pool of loyal, repeat customers; attracting new loyal customers at a lower cost (through word of mouth and referrals by current loyal customers); and increasing the amount spent per loyal customer.  All this drives revenue growth. And, when you implement the business model that properly supports your customer value proposition in a cost-effective way, you grow your bottom line as well.

The First Half of Your Customer Value Proposition – Giving Them What They Want, How They Want It

What are the specific product or service features you offer? How does your product or service look, feel, and even smell? What does your product or service do? Product or service features make them stand out from the crowd and, in combination with the way you create and deliver your products or services to your customer, help attract customers to you.

When customers get what they want, how they want it, in a way that makes them feel the way they want to feel, they perceive value. When customers perceive that they are receiving value from a product or service, and the company that provides it, they are attracted to the company and what it offers.

It is important to realize, however, that different types of customers want different things from the products or services they buy and the companies they buy them from. The key is to match what YOUR customer wants with what you give them and how you deliver it.

When you do, you deliver the right value to the right customer and this is the foundation of business success.

The Second Half of Your Customer Value Proposition – Making Them Feel the Way They Want to Feel

Also called “the customer experience”, making customers feel the way they want to feel when they buy from you is dependent on two things: the nature and the quality of the interactions they have with you, and their perception of those interactions.

Each interaction you have with your customers gives you the chance to either delight or disappoint them. If you’re smart, you’ll design “what” and “how” elements into every touch point or interaction they have with you. However, you must also build a certain amount of flexibility into your design so you can accommodate to unique customer points of view and successfully deliver the right feel to each individual customer.

No matter how well you design your customer interactions, and what your objective measures of performance say about those interactions, your customer’s perception of their experience when dealing with you is the only reality that counts. Your customer’s experience of you is a combination of how the costumer consciously and subconsciously sees an interaction. Individual customers have a positive experience when (1) you deliver the experience you have promised; and (2) the experience meets the practical and emotional needs and expectations of that customer.

The key to designing and delivering a successful customer value proposition is starting with a clearly defined target customer. This gives you someone to get to know really well, allowing you to develop an intimate understanding of their evolving wants, needs, and expectations and what they value. With this information, you can identify and create products and services that will suit your target customer AND you can design a customer experience that will appeal to them on an emotional level.

When your customer value proposition is successful in giving your customers what they want, in the way that they want it, and in a way that feels right, you are providing your customers with an irresistible level of value.

And, for savvy companies, providing an irresistible customer value proposition is the key to acheiving breakthrough business growth.


  1. Kevin Madu
    Apr 28, 2012

    I like this article.Designing a winning customer value proposition is increasingly going to be the strategy that separates the men from the Boys in the battle for survival between organisations.I also believe that applying the principles of market led Quality(LEQ) and innovation could facilitate efforts to deliver customer value to both existing and new customers.

  2. bala
    Apr 28, 2012

    This is true and perfect. Understanding customer requirement is the skill but employee deal with less patience. Can you give suggestions to implement this to SMEs.

  3. Sandy Richardson
    Apr 28, 2012

    Hi Kevin: I agree with you – a clearly defined customer value proposition that diferentiates your company in the eyes of the customer is what will help a company achieve sustainable business success. I would love to hear more about market led quality. Sandy

  4. Sandy Richardson
    Apr 28, 2012

    Hi Bala: if you give me a little more information about what tips you are specifically looking for, I’ll see what I can offer. Thanks, Sandy

  5. Niko Holmen
    May 27, 2012

    I heard a couple of guys talking about this in the New York subway so I looked it up online and found your page. Thanks. I thought I was right and you confirmed my thoughts. Thanks for the work you’ve put into this. I’d love to save this and share with my friends.

  6. Unique Value Proposition
    Aug 23, 2012

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