A value proposition is the promise of value to be delivered; it explains how your product solves the problem/s of your customer, how it improves their situation, and tells the customer why they should buy your product over another. It is what sets you apart from the competition.
Value proposition determines whether someone will want to know more about your product and then finally whether they choose to buy it.
Step 1: Define the Problem
It is a common mistake for people to get so wrapped up in their new idea that they haven’t taken the time to really understand the problem they are hoping to solve. This step will also help you determine whether the problem you have identified is worth solving.
Consider the following questions - the more times you answer YES, the better it is for you:
- Is the problem unworkable? Does your solution fix a problem that has a bigger impact?
- Is fixing the problem unavoidable? Does your solution address a problem that has pressure to be fixed?
- Is the problem urgent? Is it a top priority to your customer?
- Is the problem being ignored? Is there an obvious lack of attention to the given problem? Are there any other products or services in the market addressing the problem?
Step 2: Evaluate Your Idea
The next step starts with a simple question; what makes your idea unique and compelling? Having a product or service that is faster, cheaper and better doesn’t guarantee success. You need to have unique traits to your idea that will make it stand out from the crowd and grab the attention of your customer.
As a team, start a list of every trait or feature of your idea that makes it stand above all of its competitors. Sort the list into groups and determine what types of features are most prevalent and see how they relate to the problem you have identified for your customers.
Step 3: Measure Customer Potential
While your idea might seem brilliant to you, it’s important to consider how easy it will be for customers to learn to use the product. You want your idea to be exciting and new and unlike anything seen before however it also needs to be something that customers are open to and likely to adopt.
For example, if your idea is a new phone app or software, there is a lot relying on your customers ability to use to use the program successfully. Consider social media - the success of Facebook relied on usability and to this day their success is measured by customer engagement. If people found using Facebook too hard, it wouldn’t have become the billion-dollar company that it is today.
A really simple way to measure customer potential is to create a pros vs. cons list. Usually used for decision making, pros vs. cons lists are great for comparing perspectives, points of view and making balanced, informed decisions. To help understand your customers, start a list of pros vs. cons, from their perspective of adopting your product or service (obviously - the most pros, the better!).
Step 4: Build Your Value Map
The value map canvas allows you to map out the fit between what you offer and what customers want. Completing the value map canvas helps you to visualise how you are creating value for your customers.
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