How to Create a Value Proposition in eCommerce

How to Create a Value Proposition in eCommerce

The value proposition of any eCommerce business is the reason consumers buy your products or services. If your business don’t have a clear understanding of the value you provide, you’re putting yourself at an immediate and unnecessary disadvantage. It’s likely that everything starting from your site design to your positioning and marketing will suffer as a consequence.

In this article we’ll discuss how an eCommerce store owner can create and develop a unique value proposition to differentiate his store from the others and also how to write a value proposition.

eCommerce Value Propositions

What is a value proposition?

A value proposition is simply a statement of the different ways you provide value to your potential customers.

It details how you solve major pain-points experienced by your potential customers and how you improve your customer experience by adding further value.

It can also refer to specific benefits, like fast and free shipping, or more general emotional experiences, like ease and convenience.

For example, Amazon solves the fundamental issues of poor product choice and slow shipping by providing a diverse selection of products available with expedited delivery.

But it also further improves the customer experience with a host of extra benefits, such as one-click delivery, gift-wrapping, time-saving features like wish lists and saved items, and an enticing loyalty program.

On a practical level, The value proposition of your company will be expressed as a simple statement describing which problems your store solves, positioning yourself against the competition and highlighting key features.

For example, Etsy provides an opportunity for customers to buy handmade products. One of the major complaints in the eCommerce space is that mass-made products lack the personal touch of handmade products. By providing a marketplace that connects buyers with artisan sellers, it provides a great solution to this problem.

Etsy Value Proposition

What are the differences between a value proposition, a USP, tagline, a slogan and a mission statement?

There are no exact definitions when it comes to this topic. Terms like “mission statements”, “slogan”, “USP”, and “value proposition” are all related and feed into each other.

Let’s have a look at some key terms:

USP – A value proposition is not a Unique Selling Proposition (USP), which refers to a specific unique feature of your eCommerce store. But your USP will be included in your value proposition in terms of the unique value that it provides. One of USP example, is Amazon’s one-click purchasing. The value that it provides is easy and convenience.

Etsy eCommerce Slogan

Mission statement – A mission statement is a short written statement that describes the purpose of the company. Although it needs to be crafted with a marketing mind set, it is rarely intended for the general public. A good mission statement will succinctly rally the troops and make clear an organization’s purpose and ultimate goal. For example, Microsoft’s mission is: “To help people around the world realize their full potential.”

Tagline – A tagline and slogan can often be the same. A tagline is a formal line of “copy” often used in advertising and frequently placed below the logo. Taglines should evoke emotion or compel an action, whenever possible, and go beyond mere description.

Slogan – A slogan is less formal than a tagline and can be a frequently used line or a motto to describe the company or its mindset.

Both mission statements and slogan are very important. But they derive from the value proposition. They’re not the value proposition itself.

Why Develop a Value Proposition?

Is it not good enough to simply rely on the product you sell to provide the value proposition? Surely if you bring enough targeted customers to your site you are bound to sell a few.

Unfortunately, this is a wrong way of thinking that has deemed many online eCommerce stores to fail.

One of the greatest threats to any online store’s existence is similarity. You don’t want to become a commodity. With the abundance of online eCommerce retail stores offering the same product, differentiation is your key tool in attracting buyers and convincing them to buy from you.

Furthermore, even if you sell your own original products offering, often at a lower price, greatly threatening your business’ existence.

A strong value proposition thus becomes one of the most powerful weapons you can employ to defend your online business.

What makes a great value proposition?

Here’s the checklist to make a great value proposition:

  • It should speak directly to your market – A good value proposition should represent your market’s psycho-graphic and demographic details. Products, price-points, and added benefits that provide value to millennial. Always begin from solid data about your market.
  • It should include all what customers already expect – What do customers expect from your eCommerce stores? Your value proposition should replicate the most important benefits that consumers take to grant. If you not include these elements it will likely set you at a competitive disadvantage. Speedy shipping, an easy returns policy, and a rewards program, are common to most successful online stores.
Zalando eCommerce Value Proposition
  • It should encompass at least one clear USP – USP provide one of the strongest parts of your overall value proposition. You should include at least one USP that will apart you from your competitor, whether it’s the ability to cheaply buy high-ticket products like Warby Parker, wholesale purchasing like Alibaba, or extensive choice like Amazon.
  • The “mix” of value should be unique – While you may offer many of the same benefits as other retailers, your “mix” of value should be unique.
  • It should be “obvious” – When a potential customer looks at your value proposition, they should instantly think, “Yes, that’s exactly what I want!”. Don’t over-complicate all things. Your value proposition should be simple, clear, and immediately resonant.

Where Should You Communicate Your Value Proposition?

Your value proposition should be evident to customers irrespective of where they land on your eCommerce store. There are three key places where you should include information about your value proposition:

  • In the header – Include your value proposition in your header, such as in the form of a slogan or key features. Please ensures that it’s visible across your whole store and that most customers will see it.
  • On the homepage – Your homepage is the perfect place for showcasing your value proposition.
  • On your product and checkout pages – Reiterate your value proposition across the whole journey of your customer. Focus on all those aspects that are most applicable depending on what the customer is doing, such as free delivery at checkout.

Create a great value proposition with some simple steps

Creating a powerful value proposition isn’t so easy.

But it’s not also impossible. So it’s important to cover all the necessary elements.

Here’s the simple steps process that you can follow to create a value proposition:

1. Define the problem of market and delights

Don’t forget to include both problems (like expensive delivery and limited product choice) and delights of your market. Along with sufferings, a good value proposition provides customers with greater and more “delightful” benefits. For example, many companies now donate a portion of each sale to charity. Though, this doesn’t solve a major pain-point but it is a nice added benefit.

2. Focus on under-served markets

Including elements in your value proposition that cater specifically to under-served markets enables you to catch those “easy wins” and broadening your potential customer base significantly. For example, many eCommerce stores, like Amazon, offer special discounts to students.

3. Include unique selling propositions

The features you provide should unique to your eCommerce store. For example, Warby Parker, sends five pairs of glasses to customers to sample, providing a greater degree of hands-on choice than their competitors.

4. Create a statement of your value proposition 

Everything should comes down to your value proposition statement. Once you’ve listed the problems you face and the benefits you provide and identified your USPs, it’s time to bring all these together into a few sentences. A statement of value proposition is also useful for aligning your whole company.

Use the following template to build your value proposition statement:
a. A statement should make within a few sentences that summarizes your overall value proposition. This is where you can communicate the key value-points of your value proposition.
b. Use bullet-points that outline USPs, supporting features, and smaller benefits.

5. Put together convincing design, marketing and packaging materials

You should communicate your value proposition in the following places:
a. On your website – On your homepage, in your header and on your product and checkout pages.
b. In your promotional materials – Place your value proposition in your newsletter, online advertising, discount offers etc.
c. Whenever you have a physical interaction with a client – Such as when a package is delivered to customers.

Don’t forget to test your Value Proposition!

The Value Proposition testing framework:

  1. Define who you are targeting and what benefits you are bringing them
  2. Build a simple landing page
  3. Set up a cold email / LinkedIn outreach campaign
  4. Launch outreach to them. 
  5. Evaluate if the offer resonates or fails 

This sounds simple, and it is. 

Value Proposition Examples

The best way to get a feel for how value propositions work and how to get them right is to look at some strong examples which are as follows.

1. Warby Parker

Warby Parker Value Proposition

The value proposition of Warby Parker is:

Save time and money by delivering low-cost frames directly to customers’ doors. Free shipping and free returns always. Constructed with value-of-the-art materials. For every pair sold, a pair is distributed to someone in need.

2. BustedTees

Busted Tees Value Proposition

BustedTees uses “the funniest tees on the web” as their homepage value proposition.

The site appears to only display the value proposition to the first-time visitors, who are more likely to be unfamiliar.

3. NOVO Watch

NOVO Watch Value Proposition

NOVO Watch promises to deliver “timepieces handmade in Alberta from repurposed pieces of history”.

Instantly, you know the difference between a watch from NOVO and their competitors. The value is unique.

4. Studio Neat

Studio Neat creates simple products that solve common and everyday problems. That value proposition is communicated throughout, even though it’s not explicitly stated on the homepage.

Studioneat Value Proposition

When you hover over the cursor on products menu, you will find “Tripod mount for smartphones”, “wood docks for Apple stuff”, “wide-grip stylus”, “make and store simple syrup”, etc.

The same theme is continued on every product pages.

5. Apple

Apple Value Proposition

The key secrets of Apple’s success is their products and the way they market them. Each of their product has its unique value proposition.

The value proposition for iPhone X is pretty simple and very short:

“Say hello to the future.”

6. Uber

Uber Value Proposition

Uber wants you to get to where you’re going without any hassle. Their value proposition shows the reason why the company is so popular.

Create a value proposition for each of your product

Like Apple does for each of its product and service, you should also create a value proposition for each and every product or service you sell.

It helps every product or service compete on its own.

Whenever you wish to discontinue selling a product or service, you can do so easily without affecting other products and services.

Create a Value Proposition: Conclusion

A value proposition is an important element you must have in place before you start eCommerce business. There’s fierce competition in eCommerce.

To compete, you need a value proposition that tells potential customers how your business as well as product is different from others.

Remember that you need to collect emails on your site. If you’ve managed to hook a potential customers with your value proposition, you should collect their email address and continue marketing to them.

You may also like: What to Sell: Trending Niche Products to Sell Online in 2019


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