When a customer is considering buying a product, she will start (consciously or unconsciously) relating its features to a possible benefit for her life.
Everything that can make her life better, she’ll consider as a value.
Well, your value proposition is all the value (from your customer’s perspective) you are delivering through your product or service.
WHY IS THIS A FUNDAMENTAL QUESTION?
Because it will guide your team’s efforts in developing a solution that is really connected with your customers’ needs.
You shouldn’t build a startup just based on how cool your idea for a new app or an innovative service is.
Everyone in the startup’s team should focus on generating more value for the customers, but without a clearly defined value proposition, people will do what they think is valuable.
FINDING THE ANSWER…
In his book called “Business Model Generation”, Alexander Osterwalder and Yves Pigneur bring us some good examples of what kind of value can you deliver to your customers:
- Newness: Is your product/service something totally new that may bring customers opportunities that do not exist today?
- Performance: Does your product/service allow customers to be more efficient?
- Customization: Can you bring more customization to your customers’ lives?
- Getting the job done: Is your product/service more effective in solving the customer’s problem?
- Design: Does your product/service have a superior design?
- Brand/Status: Can you bring more status to your customers, just because of your brand?
- Price: Can you offer a lower price for your customers, when compared to similar alternatives?
- Cost Reduction: Does your product/service allow customers to reduce their overall costs?
- Risk Reduction: Does your product/service allow customers to reduce their overall risks?
- Accessibility: Is your product/service more accessible to a specific customer segment?
- Convenience/Usability: Is it easier/convenient for your customers to use your product/service, instead of other available alternatives?
Of course, you can—and you should—try to design your value proposition considering more than one of the values above. Therefore, your value proposition should be a composition of several values you bring to customers through your product/service features. So…
How will your product add value to customers’ lives? By providing them with a more effective and convenient product? By offering them a more customized and risk-free service?
Certainly, the digital revolution is providing us with innovative ways of raising the value for customers in all of the items above.
So, when defining your value proposition, include the following elements:
- A general description of the product you’re offering
- A brief description of its features
- All the benefits your customers will have when using your product
- A long-term vision showing how your product will change the world, after massive adoption
Don’t think solely about the features of your product. Think about the benefits your product brings to your customers too. What will they get that they are not able to get today from current alternatives?
After describing your value proposition, it should be clear to you and for anyone else how your product ads value to your customers.
When you have your value proposition defined, it’s time to focus on the next question:
How Do You Communicate, Sell and Deliver Value To Customers?
Book Recommendation:
Business Model Generation
by Alexander Osterwalder and Yves Pigneur