5 - Optimize Your Value Proposition

Your value proposition is central to your success as a business: it is the reason that customers do business with you - and the only reason they choose to do so. You offer them something that is more valuable to them than what they have to do in order to obtain that value. Specifically, it's "what they have to do" and not "what they give you" because the price is not their only consideration.

A customer who buys vacuum cleaner has to drive to a store and then drive home, take the item out of the box, dispose of the packaging, install a bag, plug it into the wall, turn it on, push it around, empty the dust cup, change the filter, and a myriad of other things in order to get the benefit of buying the vacuum. Some of these costs can be mitigated (buying online and getting free delivery), vendors may be willing to mitigate other costs (first year's supply of bags and filters free), but no vendor is willing to cover all the costs to the customer.

Likewise, the value your firm offers them in return is not limited to ownership of the product, but includes all of the functional and nonfunctional benefits they will derive from its ownership and use, for the duration of its lifespan.

You advertising, as well as every aspect of your interaction with a prospect, provides them with information that has the potential to influence their decision to buy from you or not to do so, and provides a customer with information that can motivate them to keep or stop giving you their business.

The Value-Proposition Equation

On the macro-level, if all the perceived benefits of your product or service outweigh the perceived costs, a prospect will be motivated to buy. On the micro-level, if the perceived benefits of taking a specific action (such as clicking a link) outweigh he perceived costs of taking it, he will be motivated to take the action.

Maximizing the appeal of any call to action therefore requires influencing the perception of the customer - to make the benefits to them seem high and the cost to them seem minimal by comparison.

Perception Filters

The author takes a lazy swipe at the subject of perception - in that it is an individual phenomenon and that different users will interpret the information you provide them in ways that will be inconsistent with your intent. He then babbles a bit and admits in the end that he has no practical advice to offer, just "keep the filters in mind."


(EN: It gets much worse as the chapter progresses - and I have the sense that the author may not be authoritative on anything outside of optimization testing. He attempts to explain various concepts related to marketing and psychology in a way that makes it clear that he doesn't understand either subject particularly well. I expect that going forward I will skim the chapter and others, skipping anything that does not relate to his area of expertise.)