Customer value proposition

In marketing, a customer value proposition (CVP) consists of the sum total of benefits which a vendor promises a customer will receive in return for the customer's associated payment (or other value-transfer). In marketing, a customer value proposition (CVP) consists of the sum total of benefits which a vendor promises a customer will receive in return for the customer's associated payment (or other value-transfer). Customer Value Management was started by Ray Kordupleski in the 1980s and discussed in his book, Mastering Customer Value Management.A customer value proposition is a business or marketing statement that describes why a customer should buy a product or use a service. It is specifically targeted towards potential customers rather than other constituent groups such as employees, partners or suppliers. Similar to the unique selling proposition, it is a clearly defined statement that is designed to convince customers that one particular product or service will add more value or better solve a problem than others in its competitive set. A good customer value proposition will provide convincing reasons why a customer should buy a product, and also differentiate your product from competitors. Gaining a customer's attention and approval will help build sales faster and more profitably, as well as work to increase market share. Understanding customer needs is important because it helps promote the product. A brand is the perception of a product, service or company that is designed to stay in the minds of targeted consumers. Customers often use “mental shortcuts” to make purchase decisions, meaning that they rely on brand familiarity to make faster decisions. A customer value proposition is a promise of potential value that a business delivers to its customers and in essence is the reason why a customer would choose to engage with the business. It is concise statement that highlights the relevance of a product offering by explaining how it solves a problem or improves the customer's situation, the specific value against the customer's needs and the difference to competitors. The promise of value is often expressed as a solution that the business provides to help a customer solve a problem. This way of thinking about customer value proposition has been popularised by books such as the Lean Startup. It also argued that this view is simplistic as it misses the nuances of human emotions, which can have a big impact on the way customers perceive value. Customer Value Proposition is a complicated principle however, it is the main theory behind the existence and the survival of a business or a company. Value proposition means that extra values and benefits should be added to the firm's products. Due to the high rate of competition between businesses with similar products in the market, value proposition enables companies to differentiate the brands from each other helping the customers to choose the most valuable brand of product which will provide them with most benefits and advantages. Once the business receives the attention they require from their target market through the use of customer value proposition they can increase their sales and gain more profit along with the number of consumers. For a business to have customer value proposition, there is a set of key components that businesses needs to focus, discuss and follow in order to gain and achieve success. The key components are: 'developing a customer value proposition starts with an analysis of customers' needs, competitors' offerings, and the firm's strength to be outstanding within the share market.'