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Hook, Line & Sinker: How to Create Value Propositions That Work

Posted on 3.31.2015

By Isaac Rothstein, Infinite Conversions

There is a reason why value propositions should form the cornerstone of a website’s conversion rate optimization initiative – they are what make people buy from a business.

The stronger the company’s value proposition, the greater the number of conversions that will result – so it’s not something to take lightly.

Even minor changes to a value proposition can diminish conversion rate, so it needs to be on-brand and grab people by the scruff of their necks to make them believe that what is being offered will be invaluable to them. So, how so does one create an effective value proposition? First, they need a working definition…

A value proposition is all about perception and motivation. The company’s product or service has a perceived benefi t as well as a perceived cost. The amount of motivation created that is needed to make the conversion happen is the amount of perceived benefit, minus the amount of perceived cost. To put it in a formula:

+ Motivation = Perceived Benefit – Perceived Cost

Notice how it is perceived benefit and perceived cost. Perceptions are much more important than cold, hard facts, which is where a compelling value proposition comes in.

The benefits of the company’s product or service will be different for different people. In order to promote the product or service in the most effective way possible, it’s essential to find out which benefits are perceived to be the most important across the broader audience.

Say for example there’s an auto company launching a new, environmentally friendly model of one of their most popular cars. Some people might consider the environmental factor as being the key benefit while for others it will be the lower insurance costs, and still others the lower fuel consumption. For the company to create the best value proposition for its new model, it needs to determine which of the benefits is actually perceived to be the most beneficial to the greatest number of people as it will give that company the greatest chance of maximizing conversion rates and ultimately sales.

Finding the Best Value Proposition

Every marketer understands the concept of “What’s in it for me?” Customers do not necessarily want to hear about all the bells and whistles of a product, but rather how a product or service will benefit them directly.

As explained above, the benefits of the company’s product will mean something different to different people, but it’s not suitable to emphasize everything as the more that is emphasized, the less that will be said.

The company needs to work out which features are the most important to the greatest number of its customers. So, how does this start? Always be testing…

The marketing experts of the pre-Internet days helped companies predict which features of a new product or service were likely to be the most appealing and may have validated their considerations by using customer surveys and focus groups. These days, there’s a much more accurate way to measure customer expectations - testing.

By using testing, a company can accurately gauge its customers’ reactions to the different value propositions it feels the company is able to offer. It is easily observable to realize what’s going to work best, with statistical information available to support its findings.

Value proposition testing works for all kinds of businesses, not just startups. Electronic Arts – a leading player in the video gaming industry since 1982 – used value proposition testing for the launch of the third installment of one of its most popular games, and one that had sold nearly 5 million copies already. By using value proposition testing, the company was still able to increase the conversion rate of players registering with their site by 128 percent. So, how does a company decide what to test? There are three questions to ask:

[A] What do customers want from the product or service?

[B] What features does the product or service have?

[C] What features does a similar product or service from its competitors have?

The company can use the answers to understand how it can come up with a value proposition, or at least a range of value propositions that it can test. Three considerations for creating a value proposition include:

1. Parity

This is where [A], [B] and [C] intersect. These are the features that the business offers that are important to its potential customers and that are also offered by its competitors. The company’s customers need to be made aware that they can at least get the same features from its product or service that they can from competitors. This is expected, however, so it is unlikely to make a significant impression.

2. Irrelevance

This is where, in the list above, [B] does not have anything in common with [A] or [C]. These are features of the product or service that are not seen as a priority by its potential customers.

3. Difference

This is where [A] intersects with [B], not including any intersections with [C]. These are the features of its product or service that are important to its potential customers, and are not already offered by competitors.

As the reader may have worked out, it’s “Difference” where he or she wants to concentrate their attention. It is the features not offered elsewhere and that are desired by its potential customers that will most likely cause customers to take the call-to-action and result in conversion.

Testing Value Propositions on Landing Pages

The first experience with a company’s branding that customers typically receive is with its landing page. This makes the landing page the ideal place to test value propositions. The company can use multiple landing pages, but the points at which it should test are always its website entry pages.

If it split-tests its range of value propositions with people landing on its site for the first time, it’ll reduce the exposure of its propositions to people who have already judged the company and have moved on to the consideration stage of the purchasing journey. They’ve already associated a value with the product or service, and therefore their inclusion will skew results. Using new visitors gives the company a blank canvas from which it can draw conclusions.


Throw It Back!

Check out four value propositions worth re-thinking at wsm.co/4vprops


Once the company feels it has learned enough from the conversion rates gleaned from its different value propositions, it can validate these insights by moving to other audience target groups to see the value proposition’s effect.

There’s more to landing page testing than simply increasing landing page conversion rates. When it undertakes a strategic approach, doing so can provide plenty of useful marketing insights.

Offer What Competitors Can’t

The company’s value proposition is the best way of selling itself. It’s no good just saying “please buy my product … it does X, Y and Z.” It’s essential to work out what the potential customers expect, what the product can offer that will interest them and what the product offers that its competitors can’t.


Isaac Rothstein is an analyst at Infinite Conversions, focusing on improving website’s real-world financial metrics through conversion rate optimization.

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