Value Proposition vs. Positioning Statement – What’s the Difference?

Value propositions and positioning statements are the beating heart of your branding. All of your efforts–whether you’re sales or marketing–come down to connecting your product with these powerful words. Ultimately, your value proposition and positioning statements determine how your market sees you, how you are different, and who should be your customer.

Value propositions

When communicating what your product does for customers, the core message should always refer to the value proposition.

What is a value proposition?

A value proposition is the big-picture statement that addresses the most essential question in a prospect’s mind: “What’s in it for me?”

The answer might be found in your go-to-market (GTM) strategy because it is central to all kinds of decisions that your company needed to make even before it started to sell.

Remember Microsoft Zune? Yeah, didn’t think so. Microsoft designed their MP3 player at a time when Apple’s iPod had already been on the market for five years. The iPod wasn’t perfect, but Microsoft failed to look at the related customer pain points and create something . As a result, Zune’s proposed value was essentially nil and Microsoft killed the project. We don’t know exactly how Zune’s GTM worked, but having an insightful value proposition could have saved Microsoft millions.

You might think based on the Zune story that a value proposition needs a unique product behind it. But value can be based on many different factors:

• Customer benefits: time-saving, cost reduction, increased productivity
• Utility: special features, robust technology, quality, convenience
• Added-value: complementing an existing product, for example, by being an addition to a prospect’s technographics setup
• Market segment: expanding to additional markets by finding new uses for a product

Example of a value proposition

There are two things to keep in mind when creating a value proposition:

Brevity: The ultimate target of a value proposition is the customer. Keeping yours short and clear will allow them to immediately understand what you’re all about.

Fit: But what is the customer looking for? The answer lies in an Ideal Customer Profile, which gives you insight into their pain points and needs (and how they can benefit from your solution).

A good example of a value proposition is from Bitly, a URL-management platform:

Make every connection count. Create short links, QR Codes, and Link-in-bio pages.  Share them anywhere. Track what’s working, and what’s not. All inside the Bitly Connections Platform.

Bitly’s proposition explains why it’s valuable, mentions a few important features, and describes why it is easy to use – all in a few short sentences.

Positioning statements

Just as it is difficult to come up with a totally unique product, it’s also nearly impossible to sell in a market without competition.

What is a positioning statement?

Positioning statements help you understand where best to “locate” your brand in the minds of prospects compared to  the competition. Emphasis on the word “brand” – because we all know that demand for a product stems from more than just what the product does.

A positioning statement is like a simplified version of a competitive strategy. And like a value proposition, a positioning statement should be simple (even thought strategies are often anything but). To craft a strong positioning statement, you should consider how your brand is set up in terms of:

• Who should use it
• Product differentiation
• Price
• Competitive features
• Brand and social values

Of course, not all of these dimensions need to be covered in a positioning statement.

Another essential piece of a successful positioning statement is follow-through by the entire organization. A common failure point for many companies is promising great customer care, but not following through .

Even for marketing and sales people, a positioning statement has real meaning. For instance, let’s say that you have a SaaS product. If “who should use it” turns out to be large companies, you’ll need to design a strategy around enterprise SaaS sales instead of SMB sales. Plus, if the product has a high price compared to other vendors, you may need an Account Based Selling method.

Example of a positioning statement

Gro Intelligence is an analytics company that serves the agricultural and climate industries. Its positioning statement is:

Develop a holistic data-driven understanding of your impact as a business in the agriculture or climate science industries with Gro Intelligence. We offer live data, machine learning, and domain expertise to provide honest answers where ecology meets economy.

Their statement hits many highlights, as it:

• Specifies their market and the service they provide
• Introduces what seem to be technological differentiation features
• Mentions social values

What are the differences between a value proposition and a positioning statement?

If you had to boil down the distinction between value proposition and positioning statement, you could say that:

• A value proposition is why you appeal to buyers
• A positioning statement is where you fit when compared to competitors

If you’re on a sales team, you need to be very familiar with both concepts. If a prospect asks, “what is this good for?” you’ll rely on the value proposition. And when they ask “why is this better than what I already have?” you can list aspects of your positioning statement.

What is the relationship between value proposition and positioning?

Good products are always evolving, but they have to start somewhere. If yours began as part of a GTM need, chances are that the value proposition was decided first. Then, your team figured out how product value determines where you fit in the market.

However, from that point on, these two concepts influence each other. For example, you might discover that you’re not competitive on price, so you knock yours down – but then you need to eliminate a few features to save money, which changes the value proposition. In short, the constant cycle of product refinement (value) and feedback from the market (positioning) means that you can’t change one without changing the other.

Key takeaways

• A value proposition answers the basic question that any business is sure to ask – “What’s in it for me?”
• A positioning statement is a way to place your brand in the minds of prospects in comparison to similar companies.
• Many sales teams define value propositions first, but experience in the market means revising both it and the positioning statement regularly.