At its core, the value proposition of your product or service must provide quantifiable benefits to your customers. Customers would evaluate your product based on their perception of the benefits your offering brings.
To oversimplify this complex question, the basics of how customers (directly or indirectly) quantify the value of your offering lie in one or more of the following three categories:
- Monetary Value - your offering saves or makes your customers money.
- Functional Value - your offering provides practical benefits to your customers, such as saving time, reducing your efforts, etc.
- Emotional Value - your offering makes your customers feel better.
HBR has broken these three categories into their version of The Elements of Value >