Value propositions and positioning statements that say something

Read the home pages of ten small businesses in the same market and most will say roughly the same thing: quality, great service, tailored solutions, passionate team. None of it is false, and none of it helps a customer choose. A value proposition and a positioning statement are two short pieces of internal work that fix this. One describes why a specific customer should care. The other pins down how you differ from the alternative they would otherwise pick.

This guide covers the Value Proposition Canvas from Strategyzer, Geoffrey Moore’s positioning statement template, and how to test both with customers before they reach your website.

What a value proposition is

The phrase is usually credited to Michael Lanning and Edward Michaels, then consultants at McKinsey, in a 1988 staff paper. Wikipedia’s article on the value proposition quotes the paper: “A business unit promises customers some value, a combination of benefit and price.”

Two parts of that sentence matter. It is a promise, so it has to be kept in the product and service, not only the copy. And it combines benefit with price, so a value proposition that ignores cost is incomplete. A value proposition is written for a particular customer segment. If you have three segments, you probably need three.

The Value Proposition Canvas

Strategyzer’s Value Proposition Canvas is a one-page tool for matching what you offer to what a customer needs. It was introduced in the 2014 book Value Proposition Design, announced by Alex Osterwalder as the second book in the Strategyzer series. The announcement describes the canvas as “a zoom in to two blocks of the Business Model Canvas”, the companion one-page tool for a whole business model.

The canvas has two halves.

Fill in the customer profile first, from research rather than guesswork. Then fill in the value map and draw lines between pain relievers and pains, and between gain creators and gains. Items with no line are either things customers do not care about or needs you are not meeting.

Fit is the goal: the value map addresses the jobs, pains and gains that matter most to this segment. Strategyzer is blunt about this: “Fit is a claim until customers confirm it.”

Geoffrey Moore’s positioning statement

Once you know what you offer and to whom, you need to say how you differ. Geoffrey Moore’s Crossing the Chasm, first published in 1991 and revised in 1999 and 2014, gave marketers a template that is still widely used. TechTarget’s summary sets it out like this:

For (target customer) who (statement of the need or opportunity), the (product name) is a (product category) that (statement of key benefit, that is, compelling reason to buy). Unlike (primary competitive alternative), our product (statement of primary differentiation).

Each slot forces a choice:

• Target customer: one segment, described narrowly enough that you could find them.
• Need: the problem or opportunity in their words.
• Category: the shelf you want to be on in their mind. This tells them what to compare you with.
• Key benefit: one reason to buy, not a list.
• Primary alternative: what they would do if you did not exist. Often this is a spreadsheet, a freelancer or doing nothing, rather than a named competitor.
• Differentiation: the one thing you do that the alternative does not, and that the customer values.

The statement is an internal tool. It keeps the team, agencies and freelancers aligned, and copy is written from it. It rarely works as a headline as it stands.

An example (illustration only)

A two-person agency manages product feeds for small online shops: the data files that send product details to shopping ads and marketplaces. Their current website line is “Expert feed management to grow your e-commerce business.”

They fill in the canvas for one segment, Shopify stores with 200 to 2,000 products and no in-house marketer.

• Jobs: keep products showing in shopping ads; launch new products in ads quickly.
• Pains: products disapproved without warning; not knowing which errors cost sales; agency reports full of jargon.
• Gains: fewer products missing from ads; a short weekly summary; not having to learn feed rules.
• Pain relievers: daily error checks; fixes made before the store owner notices.
• Gain creators: a one-paragraph weekly email in plain English showing products live versus products in the store.

Their positioning statement becomes:

For Shopify store owners with a few hundred to a few thousand products and no marketing team, who lose sales when products drop out of shopping ads, the Feed Care plan is a managed feed service that keeps their catalogue live in ads without them touching a spreadsheet. Unlike doing it themselves with a feed app, Feed Care checks the feed daily and fixes errors before they cost sales.

The new headline drawn from it: “Your products, live in shopping ads. We fix feed errors daily so you never have to.”

Testing with customers

A value proposition is a set of assumptions until customers confirm it. Value Proposition Design pairs the canvas with tools from customer development and lean startup. Strategyzer’s announcement describes a Test Card for designing experiments that “validate or invalidate the assumptions”, and a Learning Card for recording what you found.

Simple tests a small business can run in a week:

1. The repeat-back test. Read your positioning statement to five people in the target segment. Ask them to explain in their own words what you do and who it is for. If they cannot, it is not clear yet.
2. The ranking test. Show customers your list of pains and ask them to rank the top three. Check whether your pain relievers address the ones they rank highest.
3. The landing page test. Publish two versions of a page with different value propositions and compare sign-ups or enquiries from the same traffic source.
4. The sales call test. Lead with the new proposition on real calls for two weeks and note which phrases customers repeat back.

The interviews behind the customer profile matter as much as the tests. Ask about recent, specific events rather than opinions about your idea.

Common mistakes

• Writing for everyone. A proposition for all customers ends up as a list of generic virtues. Pick one segment per canvas.
• Starting with the value map. Teams describe their product first and then find pains to match. Do the customer profile first.
• Listing every feature as a gain creator. Only include what addresses a pain or gain the customer named.
• Naming the wrong alternative. Your real competitor is often a spreadsheet, a part-time freelancer or putting the job off.
• Differentiating on things customers do not value. Being the only provider with a feature matters only if buyers want it.
• Publishing the template as copy. “For X who Y” reads as a planning document. Write the headline from it.

When to use these tools

Use the canvas when you design a new offer, enter a new segment, or notice that sales conversations keep stalling at “why you?”. Use the positioning statement whenever several people write about your business, so they work from one sentence. Revisit both when a new competitor appears or your customer research turns up pains you did not expect.

Neither tool replaces evidence. A neat canvas built in a meeting room is a hypothesis. It earns its place once real customers have confirmed the pains and responded to the promise.