Price is what you pay. Value is what you get.
—Warren Buffett, American investment entrepreneur and philanthropist
Investopedia defines a value proposition as “a business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.” (See Figure 1.1.)
The word consumer in the definition is inherently interchangeable with business to accommodate both business and consumer purchases. The second sentence in the definition defines the foundation and the reason consumers or businesses purchase specific goods and services—to add value or solve problems better than other available offerings. If the statement convinces the purchaser that value is added or a problem is solved, then the purchase benefits both buyer and seller and a transaction should naturally occur. Well done, Investopedia!
In summary, the value proposition defines what the organization does and its purpose for being—to add value and benefit the purchaser. Unfortunately, articulating a value proposition is a challenge for most of us. You ...