5 Steps to Creating a Value Proposition That Sells

If you don’t have a clear value proposition you won’t capture your target audience’s attention and attract new customers. Here’s a guide to creating a value proposition for your startup that engages your audience and generates new business.

If your target audience can’t understand what your startup does in eight seconds or less, you’ve lost them to another ad, opportunity, or the competition.

And here’s why…

Eight seconds is roughly how much time you have to capture your audience’s attention.

Whatever you say within that time frame must get your target customer interested in learning more.

A strong value proposition in one sentence

A startup’s value proposition should explain in one simple sentence what problem your business solves, how you solve it, and why you’re better than the competition.

Let’s look at Facebook’s value proposition

Facebook is a social media platform that helps people communicate efficiently with their friends, family, and coworkers by connecting them through an easy-to-use online platform.

Sounds familiar, right?

Now, let’s look at the value proposition of a B2B service like Salesforce.

Salesforce is a productivity tool that helps businesses improve their sales results by collecting and analyzing customer information and creating quality sales management processes.

Also, pretty clear.

One company can have two value propositions

Your startup can have two separate value propositions if your product or service appeals to distinct types of customers.

The ride-sharing app Uber, for example, has two such value propositions – one appealing to users and one to drivers.

Uber is a car-sharing service that allows city residents to travel conveniently, 24 hours a day, seven days a week, by calling a ride with one click and tracking the driver.

Uber is a car-sharing service that helps automobile owners earn income using their vehicles to transport passengers by making their availability visible to potential customers.

Each of these value propositions appeals to a unique target customer.

You should never have two value propositions for the same target customer as this will confuse them and muddle your message.

Your value proposition is the heartbeat of your startup

A clear value proposition sits at the heart of every successful business.

A startup without a clear value proposition is like a boat without a steering wheel or rudder.

If you’re rudderless, the waves and not your vision are what will decide the long-term success of your company.

If your value proposition is clear, it’s also likely that you will have…

  • A clear business identity
  • A well-defined target audience
  • An easy-to-understand product or service
  • A compelling customer message

In this guide, I take you through a 5-step process to help you create a clear value proposition for your startup that sells.

Download the companion worksheet here so you can do the exercise yourself here.

Step 1: Understand the Customer Problem You Solve

Step 1: Understand the Customer Problem You Solve
Picture by mohammed_hassan on Pixabay

Your first step is to articulate your target customer’s problem or need.

For B2B startups, your customers will most likely be worried about:

  • Increasing revenue
  • Saving costs
  • Building awareness
  • Boosting efficiency

If your startup solves a customer problem that impacts their bottom-line – meaning it increases revenues or saves costs – it’s more likely your target prospect will need your service.

If your startup solves only nice-to-have problems, it’s likely you’ll have a more difficult time selling your service.

Businesses that provide “need-to-have” solutions tend to thrive and even survive downturns, while startups offering “nice-to-have” solutions only flourish when the economic climate is positive.

When articulating your customers’ needs, make sure you write problem statements in your customers’ voices.

Look at how my client, BotsAndUs, defined their customer problems.

This UK-based startup provides cargo warehouses real-time insights by using autonomous robots to measure, track and find goods without workflow disruption.

Here are some problem statements their target customers – managers of cargo warehouses – say to themselves:

  • “I need a way of managing customers who under-report their cargo size because it means I lose money.”
  • “I wish I could move goods within my warehouse from point A to B more efficiently and quickly.”
  • “I wish my warehouse managers could find cargo as soon as possible.”
  • “I wish I could make better use of my cargo space.”

With your problem statements ready, it’s time you identified your target customer.

Step 2: Identify your target customer

Step 2: Identify your target customer
Picture by Alex_Mile on Pixabay

Describe the type of customer who says the problem statements you’ve listed in step one.

B2B startups should follow a two-level approach.

First, identify the company you want to do business with that has the problems you want to solve.

Some typical ‘facts and figures’ that you might want to use include the target company’s industry, revenues, number of employees, or geographic location.

Next, determine the individuals in these organizations who either make a buying decision or influence the buying decisions.

Typically, you can identify these people based on their job role, function, or title.

In addition, make sure to determine what feelings and emotions your target customer might have.

Perhaps, they value safety and reliability above all else or they are very cost-conscious and need to feel like they’re getting good value for money.

Remember: your customers are people too, so don’t neglect this side of them.

Now that you’ve identified your target customer, come up with a simple way to describe your company, product, or service.

Step 3: Describe your company, product, or service

Step 3: Describe your company, product, or service
Picture by mohammed_hassan on Pixabay

Many startup founders use confusing terms to describe what they are selling.

Saying your business is a ‘fully-integrated, AI-driven, end-to-end marketing technology’ sounds cool, but just reading it will give your customer a headache.
What’s more, a majority of your customers won’t understand what you do and simply move on.

My advice is, keep it simple!
Give your company, product, or service, a descriptive name that says in plain English what you do.

Are you a…

  • Loyalty marketing platform
  • E-commerce service
  • Digital software tool
  • Business application developer
  • Video technology provider

Avoid buzzwords only industry insiders understand to make sure your target customer immediately understands what your company, product, or service does.

Now that you’ve clearly identified your business and whose problem it solves, you must communicate the value your company, product, or service delivers.

Step 4: Decide your business’ key benefit

Step 4: Decide your business’ key benefit
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Start by listing all the ways your target customer’s business, work, or life would improve as a result of using your product or service.
These benefits will most likely be related to step one, where you listed what problem your business solves or need it fulfills.

Here’s a quick reminder…

  • Saving time or money
  • Improving efficiency
  • Access to resources
  • Creating awareness

My client, Syndicast, is a marketing platform that promotes new song releases to radio stations worldwide.

Here are some benefits they listed:

  • We reach radio music program directors, especially in mid-range radio station
  • We provide access to 1,800 radio stations in 88 countries
  • We enable airplay on stations and streaming services that generates royalty revenues

These are all practical benefits that your product or service could provide.

Make sure you also cover the emotional benefits your service delivers.

Remember: you’re marketing to human beings with feelings, not robots.

We know people often make decisions based on emotions first and then justify them with logic.

Step 4: Decide your business’ key benefit

Step 5: Determine your startup’s competitive advantage
Picture by sasint on Pixabay

List all the reasons why your target customer should buy your product or service over that of your competition.

In my experience, your competitive advantage will likely come from HOW you offer solutions to your target market’s problems.

Your competitive advantage could be a unique method, process, or technology.

My client, Logiscool, is a coding school for kids and teens.

Their competitive advantage is their unique teaching method that combines visual coding with text-based coding to create the most effective and fun experience tailored to any age or knowledge level.

Sometimes, your competitive advantage may simply be one of the benefits you’ve listed in step four.

A word of warning: make sure you don’t make price your competitive advantage!

This strategy often leads to a race to the bottom because there will always be other companies willing to lower their prices to gain market share.

To ensure your competitive advantage will last, make sure it meets these three criteria:

Your competitive advantage should be …

  • Meaningful – it’s something your target customer values.
  • Deliverable – it’s something you can actually implement
  • Defendable – it’s something you can protect versus your competition.

The last point is often the most difficult standard to meet, but if you have unique intellectual property that you can legally protect, maintaining your competitive advantage will be easier.

Put the pieces together to build your value proposition

Once you have completed all five steps, capture the essence of each one into a single word or thought – something I call a ‘building block.’

Use these as building blocks to create a value proposition that explains in one single sentence what problem you solve, for who, and why you’re better than the competition.

Let me illustrate this process through Voxeltek, a manufacturer of digital dental technology.

When we applied my 5-step process to their business, we created the following building blocks:

  • Problem/Need: I’m losing customers because I can’t produce digitally prepared dental appliances easily and inexpensively.
  • Target Customer: dental technicians ready for digital workflow.
  • Company Description: dental technology manufacturer
  • Key Benefit: They provide a simple and easy introduction to the world of digital dental lab technology.
  • Competitive Advantage: End-to-end system, low running costs, quick ROI.

We applied these building blocks to the sentence structure below and created this value proposition.

[Company Name] is a [product/service definition] that helps [target customer] to [key benefit] by [competitive advantage].

[Voxeltek] is a [dental technology manufacturer] that helps [dental technicians] to [easily introduce digital workflow] by [providing an end-to-end lab system with low running costs and a quick return on investment].

You should see a clear connection between the five steps, the building blocks, sentence structure, and the final, one-sentence value proposition.

Test, record, and revise as needed

You’ll need to validate your value proposition in the real world by testing it in your direct conversations with customers and by using it in your sales and marketing materials – your website, emails, and presentations.

Record the feedback you hear from customers and business partners.

After a while, you’ll start hearing the same points over and over again. Some might not understand your company description, while others may feel like your key benefit is actually different from what you originally thought it would be.

Adjust your value proposition to reflect the feedback you’ve gotten from your various conversations and experiences with customers.

Sometimes, letting go of some initial assumptions will be tough, but force yourself to do it anyway.

Keep in mind that getting your value proposition right is a process.

Don’t get discouraged if you don’t get it right the first time.

Eventually, you will create a value proposition that resonates with your target customer.

You’ll know when you’ve gotten it right because you’ll start gaining traction with potential customers, hear fewer objections and you’ll start closing deal after deal.


Are you ready to create a value proposition that sells?

Contact me to see how I can help you scale your B2B sales globally by creating a clear value proposition for your business.

Creating a clear value proposition is Module One of The Launch Code, my step business development framework that helps B2B startup founders add 3-5 new clients each month by adapting corporate planning, sales, and management techniques to an entrepreneurial environment.

Click here to book a 30-minute call with me and see if you qualify to participate in my personal mentoring program.