value-proposition-examples

Value Proposition Examples You Can Learn From

A value proposition is one of the key building blocks for any business model. It is the benefit both in terms of gains or reduced pains a potential customer, or key partner might experience.

Indeed, the value proposition isn’t just a promise and payoff for customers, but that is also very important to connect key players (employees, distributors, partners and more) both internally and externally to the organization.

What is business value?

There isn’t a single definition of value. But that is somewhat relative, and we need to ask “to whom?”

For instance, when it comes to the business world, value can be created for investors, for shareholders, for partners, employees, customers, and more.

Thus, depending on the interactions the company has with several stakeholders, at each interaction, the company has the chance to create and capture business value.

For what matter we might define business value as:

The payoffs that a stakeholder (partner, employee, customer, user or any other key player for the organization) gains from interacting with a company.

Business value isn’t intended just as monetary value. Business value is also created when from the interaction, there is no money exchanged, yet the interaction has an economic benefit for someone else.

For instance, Facebook is a media business, which offers a free platform to its users. Thus, (as of now) there is no exchange of money between Facebook and its users. However, the actions users take on the Facebook platform are valuable for businesses willing to capture some of that value by advertising on Facebook‘s newsfeed.

What is a value proposition then?

value proposition might be defined as anything the is valuable to a set of key partners and players for the company’s business model. Indeed, a value proposition is the glue that keeps together the company’s business model in the long-run and what makes it sustainable.

The value proposition in a linear vs. platform or scaled business

It is essential to distinguish between a value proposition between a linear business vs. a more complex, platform, or scaled business model.

Indeed, it would be a mistake to believe that a value proposition is the same for a small organization vs. a business which has scaled up and it has already hundreds if not thousands of employees and hundreds of thousands of customers.

A larger, complex organization will have multiple value proposition for as many players it has that are critical for the company’s business model.

Three value proposition examples

For the sake of this analysis, we’ll look at the value proposition of three large organizations:

That is why we’ll look at companies that offer “multi-sided” value propositions. Or more variations of a core value proposition, based on the key players the company interacts with.

Apple’s value proposition

apple-value-proposition
Apple is a tech giant, and as such, it encompasses a set of value propositions that make Apple’s brand recognized, among consumers. The three fundamental value propositions of Apple’s brand leverages on the “Think Different” motto; reliable tech devices for mass markets; and in 2019, Apple also started to emphasize more and more about privacy to differentiate from other tech giants.

Read: Apple Value Proposition In A Nutshell

Amazon value proposition

Amazon Value Proposition
A company like Amazon has multiple value propositions, as it serves several target customers in different markets. With its mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online and endeavors to offer its customers the lowest possible prices,” Amazon value propositions range from “Easy to read on the go” for a device like Kindle, to “Sell better, sell more” to its marketplace.

Read: Amazon Value Proposition In A Nutshell

Google value proposition

business-model-canvas

For a tech giant like Google, which has a sophisticated business model, based on a hidden revenue generation, there is also a multi-sided value proposition.

Some of those would be:

  • Users: a free search engine for billions of users around the world. Users get a free, seamless engine that helps them find an answer to anything. Google also provides now advanced features that enable a very advanced and rich experience to users. Among all the partners Google‘s users are the most important. Even though users don’t pay for Google search, they are at the core of the overall Google business model. Without users, Google would not have a business model in the first place.
  • Businesses advertising on Google: The core of the Google business model is advertising, focused on targeted text-based ads for businesses offered via the AdSense network. Before Google existed,d there was no way for marketers to know in details all the conversion metrics of their ads. While Overture was the first in offering CPC advertising, Google managed to scale it up at massive levels.
  • Publishers: Before Google disrupted the advertising world and took over the digital advertising market, a few established publishers could make money via advertising. With its AdSense network, Google also allowed small publishers to monetize their content. 
  • Developers: in a world where AI and machine learning have become critical to create products that people want, developers have become even more important than publishers  – I argue – for the development and evolution of Google‘s future business model.

DoorDash Value Proposition

 
how-does-doordash-make-money
DoorDash is a platform business model that enables restaurants to set up at no cost delivery operations. At the same time, customers get their food at home and dashers (delivery people) earn some extra money. DoorDash makes money by markup prices through delivery fees, memberships, and advertising for restaurants on the marketplace.
  • For restaurants, more exposure for their brands and an additional revenue stream
  • For dashers, the ability to earn income flexibly. 
  • For eaters, the comfort of having food delivered straight to their doors.

Vroom Value Propositions

Vroom is an e-commerce platform for used cars. Its value propositions are in line with its key partners: 

  • Car buyers, get a curated, wide and reconditioned inventory, with a set of value added services (insurance and more), together with the car purchase. 
  • Car sellers can get the easy valuation of the car, and in case also a simple set up process to sell the car directly to Vroom. 

Honey Value Propositions

how-does-honey-make-money
Honey earns affiliate commissions from stores when users find savings, as the purchase is confirmed. Honey also makes money with its Honey Gold earning a commission when the member visits a partner store while it offers members a digital coupon to apply at purchase. PayPal acquired honey in 2020 for a $4 billion cash acquisition.
  • For members Honey makes available discounts, to shop conveniently in many shops, part of the network. 
  • For stores, part of the network, they get additional exposure on the platform, thus attracting more potential customers. 

Udemy Value Propositions 

udemy-business-model
Udemy is an e-learning platform with two primary parts: the consumer-facing platform (B2C). And the enterprise platform (B2B). Udemy sells courses to anyone on its core marketplace, while it sells Udemy for Business only to B2B/Enterprise accounts. As such, Udemy has two key players: instructors on the marketplace, and business instructors for the B2B platform.
  • Instructors get an additional income stream, and the ability to work flexibly, with a scalable product, like a course. 
  • E-learners get access to the Udemy marketplace, with a wide variety of courses, usually available at an affordable price. 
  • Companies get access to a whole library of courses, so they can reduce the training costs for employees and an smoother transition with the company, as they have unlimited learning resources available for their growth.  

Discord Value Propositions

how-does-discord-make-money
Discord makes money in several ways. From its Discord Store, where users can buy premium games, to the seller shops, that primarily works with a 90/10 revenue share for developers and game sellers. And the ability for sellers to get more visibility on the platform by adding features to the game visibility.
  • Gamers get a platform where they can interact with other gamers.
  • Developers get an ecosystem where they can make money by developing games on the platform. 

Craiglist Value Propositions

how-does-craigslist-make-money
Craiglist is a local posting website that enables people to post any sort of classifieds on the platform, mostly for free, except for some categories of ads and the advertising of vehicles on the website. Therefore, craigslist monetizes based on some premium categories of listings (like job postings or apartment rentals).
  • Users get access to a free website that has any sort of listings, from jobs, to rents and sales of used items. 
  • Companies get mostly free postings on the platform, except for a few categories of products where the listings is paid.

WordPress Value Propositions 

how-does-wordpress-make-money
WordPress.org became the most popular CMS and blogging platform in which the Foundation owns the trademark, and revenues come from donations. The Foundation holds a public-benefit-corporation who manages the revenues coming from WordPress events and conferences. Automaticc – the business arm – monetizes premium tools built on top of WordPress.com (a premium platform) through freemiums.
  • Website owners get an easy to set up blogging platform for free, with the possibility to expand its capability with plugins and extensions. 
  • Developers get access to an ecosystem where they can develop their own tools to be hosted on the WordPress marketplace and build a business around that tool.

Key takeaways

  • A value proposition is a key building block for any business model
  • Value is created not just from the monetary standpoint
  • Larger, more complex organizations will have also multiple value propositions

Business resources:

 

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here

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