Optimizing Value Propositions for Circular Business Models: The Interplay of Price, Brand, Quality, and Circularity

ABSTRACT Despite the increasing interest in circular business models (CBMs), how they engage customers and other stakeholders is still under‐researched, limiting their broader implementation. This study addresses this gap by examining how CBMs can foster engagement through their value propositions. Through a literature review, we identify four key dimensions of value propositions: brand, quality, price, and circularity. Using a discrete choice conjoint experiment ( n = 365), we assess their impact on customer decision‐making, offering valuable insights for advancing their engagement with CBMs. Our findings offer critical insights: lower prices significantly boost customer engagement, while high‐end brands and high quality also drive higher engagement compared with their lower‐end counterparts. Surprisingly, higher levels of circularity (reduce and reuse) reduce engagement, contrasting with lower levels of circularity (recycling) and linearity. These findings have both theoretical and practical contributions, highlighting how value propositions can enhance customer engagement and unlock the potential of CBMs to drive sustainable consumption.