How to define your value proposition
Before I get into this properly, I just want to dispel any confusion about what your value proposition means.
What is the value of a value proposition?
- It helps you gain clarity over the real value your product / service delivers.
- It helps to align teams and departments behind a single vision.
- It minimizes the risk of failure upon launch.
A value proposition is a statement that answers ‘why’ someone should do business with you. It should convince a potential customer why your service or product will be of more value to them than similar offerings from your competition.
Defining your value proposition
The first step is understanding your target audience in more detail. You can use the ‘Value Proposition Canvas’ to help you focus. You need to understand what your customer needs to get done (Jobs), what pains they have and what gains your product / service can deliver.
You may need to create multiple maps for different customer segments depending on your audience. Although each customer segment may vary, you need to get a sense of the top priorities for each. To do this rank the jobs, pains and gains you identified in order of importance, in one list.
Tip: At this stage use your best guess to determine what is important to your customers. You will define this later with some research.
The second step is to take a look at your business. For each customer segment you detailed previously, list out all the relevant products / services, then all of the specific pain points your products / services alleviate and any gains that your products / services offer that customer.
Then follow the same process of ranking each by importance as you did for the customer segments.
Tip: What you should have now is 6 comprehensive lists ranked by importance: Jobs, pains, gains, products/services, pain relievers and gain creators. Plus a value map for each segment.
The third step is identifying ‘fit’. Create a new map with the most important elements from your lists and begin ticking off all the items that match. Go through each map and put a check-mark on the items that match up and a cross next to those that don’t.
Tip: If you don’t have any matches you need to seriously reevaluate your business model.
You can’t solve every problem for every customer, so don’t worry about the crosses in your list. Focus on the most important checkmarks.
Tip: The crosses highlight potential areas for future development of your product/service.
At this point you can begin prototyping value proposition ideas and testing them with real customers. You’ll also want them to align with your business model and direction of the business.
A subject for another blog!
You can download the Value Proposition Canvas here to begin trying this yourself. If you need any help we’re on hand to offer advice or to help facilitate a workshop.
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