Why Should I Buy From You? Part 2 – The Value Proposition

Why Should I Buy From You? Part 2 – The Value Proposition

The battle to convert site visitors into customers is hotting up and many websites will fail by not understanding the issues that affect customer behaviour.

In part one of this article, we looked at recent research that demonstrated what factors were most important to site visitors when deciding whether to make a purchase. As it became apparent that price was the major factor, and that postage meant online sellers were competing with traditional stores, the issue of an effective price point has become crucial in beating competition.

But if online businesses are solely competing on price, eventually, profit margins will be shaved so much that price differences will be nominal and profits will suffer. If all the competing online stores have prices within the same narrow band in an attempt to stay competitive, there is nowhere left for the marketer to go. Or is there?

How does an online seller remain dominant in their field without relying on chasing price reductions in order to maximise customer conversions?

How Does a Customer Define Value?

To understand the problem, we need to analyse the notion of value. The literal definition is “relative worth, merit, or importance”. Of course there are other meanings, mostly concerned solely with price or how much an item may be exchanged for. But although most marketers focus on these other definitions, a customer is actually considering the first definition when they are comparing your offer to the alternatives available.

By this, I mean to illustrate that there is more than a simple monetary value at play here, and this can help you to determine additional ways of adding value to your offer without affecting the price, so as to create a greater ‘worth’ for the customer.

This is called a ‘value proposition’ and it is the main reason why you stand out from your competition.

One of the most commonly cited examples of a successful value proposition comes from Domino’s Pizza. When Dominos first opened forty years ago, they were entering a marketplace already teeming with pizza delivery franchises. Dominos knew that to simply compete on price would invite disaster, as price competition was too fierce. So they looked at how to increase the value of their offer.

You get fresh, hot pizza delivered to your door in 30 minutes or less — or it’s free.

We’re all familiar with the value proposition they settled on, especially as it was so successful, other chains had to adopt similar promises to stay competitive. The reason it worked, was that Dominos added the extra value of time. By ordering from dominos, you were probably not spending any less than from Pizza Hut or any of the other chains, but you were assured of a fast delivery. That assurance was valuable, and therefore made the worth of the Dominos offer greater than the competition’s.

Sadly, because a pizza delivery driver was killed in a car accident trying to live up to this promise, Dominos had to stop using this campaign. But by this stage, it had been successful in helping Dominos grow into a world-wide franchise and the second largest pizza chain in the United States behind Pizza Hut.

“When your package absolutely, positively has to get there overnight

Another famous value proposition from FedEx. By identifying that the customer didn’t want just fast delivery but also valued a guarantee of urgent delivery, FedEx became the leading overnight courier in the world.

“The milk chocolate melts in your mouth, not in your hand

M&Ms tapped into a customer need by realising that a chocolate that didn’t make a mess, particularly with children, would be a snack of choice among consumers.

So what can we learn from these value propositions?

Firstly, none of these examples mention price. Price is not even a factor in deciding a value proposition and if your marketing strategy revolves around price, you may need to address this. The price needs to be within a competitive range of your competitors, to avoid customers dismissing your product without looking any further. Remember, customers look at price first in making their decisions. But assuming your customers have identified your product within this acceptable price range, then other elements will decide where they buy.

They also don’t mention customer service, which is so often used as a selling point by marketers that it is virtually worthless in adding value. A customer assumes they will receive quality service when they purchase a product – otherwise they won’t come back. Therefore, advertising customer service as a value proposition does not make your business special but simply meeting the accepted standard.

What these three value proposition, and others besides, do achieve is a focus on a separate identified customer priority. By knowing your likely market, you can determine what they will also value and incorporate that into your value proposition.

Designing a strong value proposition can be difficult for an established product line or brand. This is because a strong value proposition may even mean performing some changes on your business model or product range. Do not be afraid of this. If your current business model does not allow for a value proposition that elicits a strong customer response, then a staunch refusal to not change but continue with other marketing campaigns means you are playing with a handicap.

But sometimes change isn’t necessary. Sometimes, the benefit to the consumer is inherent within the product or service but no one has identified and promoted it before. M&Ms are an example of a product where the value proposition was devised after the product was created when it was realised that their product had a quality that was valuable.

This means analysing your current products from a consumer point of view. Resist the temptation to want to dictate to customers what they want and make sure you give them what they want instead.

Once you have identified this value proposition for your product or company, then make sure this is publicised throughout all of your marketing. Sometimes, it can take a while for a value proposition to take off as customers slowly realise the implications of what you are offering so it can be advantageous to contain some explanation in your marketing material. But the message must be simple.

Buy from me instead of my competition and you will receive more value for your money.


  1. Very interesting – thanks Jonathan

  2. give more examples of value propositions relating to garment industry

  3. Paul Quesada says

    Good stuff.
    One nit-pick:
    Value Proposition = “No chocolate mess!” (this is the ‘benefit’)
    Tag Line = “Melts in your mouth, not in your hand” (this is merely a ‘feature’)