top of page

A Value-Based Value Proposition

The advent of value-transparency, is shifting the primary responsibility of product marketing. As more organizations adopt buyer-centric approaches in their go-to-market plans. “Value advocacy” is becoming the number one role that most in product marketing must play. There are three keys to advocating value on behalf of your buyers.

Elevating buyers' value perception

Buyers acquire solutions when their perceived value of a benefit is greater than its price. Therefore, the primary role of product marketing is to elevate a prospect's value perception to the level which justifies the true value of an offering. However, a buyer’s opinion of a solution's value could be highly contextual and it influences their willingness to pay. This why it is all the more critical for product marketing to formulate effective and segmented value propositions.


Buyers acquire solutions when their perceived value of a benefit is greater than its price.


Formulating a successful value proposition

The success of a value proposition hinges on demonstrating the real benefits of a solution. Even when the solution benefits are well quantified, no buyers are willing to pay handsome sums for solutions that are unfamiliar to them. Therefore, it is essential that the value proposition effectively communicates the real benefits that a solution provides to the way buyers work, play, or live their lives.

Value-based Pricing Strategy Blog by Pricing Innovations

A complete value proposition has four elements

  1. It competes with the competitive offers and alternative solutions

  2. It elevates the users' and buyers' willingness to pay

  3. It justifies the true value of a solution's benefits

  4. It engages the buyer in how benefits will be realized


It is essential to demonstrate the real benefits that your solution provides to the way your buyers work, play, or live their lives.


Segmenting the value proposition for different 'Value Stacks'

For a value proposition to be successful, it should be formulated by using the above four elements but coming up with "a" value proposition is not enough. Value propositions must be constructed for each of the segments to which a solution is offered. Buyers in each segment may have a different "value stack" and value the many attributes of a solution differently. For example, when picking a mode of transportation, some riders may value duration of the journey over comfort whereas others may value the minimization of the walking distance. As riders in the same segments share similar value stacks, the mentioned segments could choose to ride the metro, an Uber, or a bike, respectively, over the other options. It's critical for a value proposition to be formulated for the needs of the shared personas that make up a segment.

Value based pricing blow by Pricing Innovations

Figure 2. Different segments have different value stacks.

A value-based approach is critical in formulating a successful value proposition. The value-based approach helps marketing and sales teams to drive their prospects’ willingness to pay to the level which validates a solution’s true value. The process of quantifying the value – benefits estimation, helps to effectively communicate and justify your offering in relation to the competitive offers and other solutions.

Ready to begin your own pricing innovation?

Recent Posts
Search By Tags
bottom of page