Product propositions are like your product's quick sales pitch. They clearly tell:
- The good stuff users get.
- Why you're cooler than other companies.
When your product's awesome features match what users really need, that's a win! When planning your product, think about the main thing that will pull users in. It's not just about saying what your product does, like "Slack is for chatting." It's about how your product makes life easier in a unique way. Like, "Slack helps businesses chat better, reduces email mess, and works well with other apps."
The importance of having a compelling product value proposition cannot be overstated. Before we delve into the process, let's start with a real-life example. Imagine the world of search engines. When Bing was trying to compete with Google, it didn’t just want to be another search engine; it wanted to provide value differently. Hence, Bing promoted features that it can do a little bit different: like its daily changing background images and integration with Microsoft's products. The idea was not just to replicate Google but to offer something distinctive.
Once you start building your product, sharing your product proposition will help your developers and designers understand the “why” behind what they’re building and help them develop user empathy. Sticking to the value proposition will create a much more focused product experience for your users.
Ideally, a good value proposition model will help push your product closer towards product/market fit. Using a framework is meant to reveal potential knowledge gaps in about your customer, leading to parts of your product that won’t stick.
But, how does one determine what makes their product unique? What steps should they take to ensure that their product stands out ? There are different strategies to formulate it. We will consider it in this article some of them.
1. Lean methods based on Kano model (product centric approach).
- The Product Value Proposition Template
This blank template is your starting point. It's a guide to list down what you offer, and how you compare to others in the market. You can read in more details about each element and how to create them in a blog post about Kano model.
In short, to understand the elements:
Must-Haves: These are basic features that customers expect. For instance, in the world of smartphones, a good battery life is a must-have.
Performance Benefits: How well does your product perform a certain task? If we talk about electric cars, the range of miles they can travel on a single charge is a performance benefit. Here, Tesla might boast a higher range compared to other electric cars.
Delighters: Unique features or elements that make customers prefer your product over others. Using the smartphone example again, Samsung's Edge display could be seen as a delighter when it was first introduced.
- Scoring & Analysis
Once you've listed down the benefits, it's time to rate how your product and your competitors' products fare. An existing product can be rated based on current specifications, but if it's a new product, list down the target scores. Very popular method is to rate based on T-Shirt size (XS,S,M,L,XL)
A practical example? Visualize a music streaming app:
- Differentiators and Opportunities
The main objective is to determine your product's key differentiators. In this example, MusicWave prioritizes superior audio quality and couples mood-based playlists with virtual concerts, a delightful blend of Spotify's and Apple Music's unique offerings.
Tying this back to customer needs, perhaps MusicWave research indicated that customers were frustrated with bad music discovery algorithms and audio quality or they wanted to focus on clients with desire to have high quality virtual concerts in their houses. presenting an opportunity for them to tap into this underserved need.
- Forecasting the future
To combine it with your product vision your forecasting becomes a powerful tool. Your value proposition is not just a reflection of the current market but can be leveraged as a predictor of the future. By revisiting and reshaping your value proposition template, you can effectively predict upcoming market trends and position your product for future success.
Analyzing your product strategy in this way ensures that you’re not just solving for current market conditions and reduces the risk that the path you’re heading down will end up being suboptimal in the future.
2. Roman Pichler’s extended product vision board (Customer centric approach)
Product Vision Board, conceived by Roman Pichler, a leading figure in agile product management and lean methodologies. I
Roman Pichler's unique approach to your product’s value proposition doesn’t look at it from the lens of your user, but of your business. Some of the business-centric questions it asks are:
- Is it possible to develop the product?
- How will it benefit the company?
- What are your product’s business goals?
- How can you monetize your product and generate revenue?
- What are the costs factors to develop, market, sell and service the product?
The extended version delves deeper into these core areas, expanding on user insights, potential features, and benefits. It also takes into account the "big picture" by considering influences from market trends and potential competition.
- Examples
- Target Group: Individuals aged 25-60 looking to practice yoga at home.
- Needs: Guided, personalized yoga sessions without visiting a studio.
- Product: A mobile application with virtual yoga instructions and AI-powered personalization.
- Business Goals: Achieve 500,000 downloads in the first six months; maintain a 4.5+ rating on app stores.
- Extended Elements:
- Trends: Rise in at-home workouts; growth of the health and wellness tech market.
- Features: Virtual reality sessions, real-time posture corrections, AI-driven personalization.
- Benefits: Flexibility to practice anytime, personalized feedback, immersive experience.
3. Crossing the Chasm’s value proposition model.
The term "Crossing the Chasm" might sound familiar to those involved in the tech and startup sectors. It's a concept from a classic business book written by Geoffrey A. Moore. The book and its ideas have become staple knowledge for businesses, especially those in the high-tech domain. One of the fundamental concepts Moore discusses is the value proposition model. Let's delve into this a bit more simply.
- The Chasm
Firstly, "The Chasm" refers to a critical gap between the early adopters of a product (those innovative individuals who are keen to try new things) and the early majority (a more pragmatic group who need some convincing before they buy). Many tech products face challenges in crossing this chasm. They may be popular among tech enthusiasts but struggle to gain traction in a broader market.
More about product adaptation cycle you can read here.
- The Value Proposition Model
To help businesses successfully navigate this tricky transition, Moore provides a value proposition model, which can be summarized as follows:
a. Target Customer: Clearly identify who your product or service is for. This isn't just about demographics but understanding the problems and needs of this particular segment.
b. Compelling Reason to Buy: Why should this target customer invest in your product? This has to be a significant, tangible benefit that prompts them to make a purchase.
c. Whole Product Concept: This refers to the complete package a customer gets. It's not just the product itself, but all the additional elements like customer service, after-sales support, and complementary products or services.
d. Competition: Recognize who you're up against. But rather than just listing competitors, understand what makes you unique and better.
e. Positioning Statement: Craft a concise message that communicates your product's unique value in the market. This statement should encapsulate everything from your target audience to how you stand out from competitors.
So lets sum up: Here’s Moore’s original 6-step value proposition formula:
- For (target customer)
- Who (statement of need or opportunity)
- The (product name) is a (product category)
- That (statement of key benefit - that is, compelling reason to buy)
- Unlike (primary competitive alternative)
- Our product (statement of primary differentiation)
- Why It Matters
This model is crucial because many tech products and innovations falter when trying to move from niche popularity to mainstream success. By refining their value proposition using Moore's model, businesses can ensure they're delivering a product that not only appeals to early adopters but also resonates with a broader audience.
In essence, "Crossing the Chasm" and its value proposition model is a roadmap for businesses to transition from early market success to broader, mainstream adoption.
- Examples:
Healthtech
- For primary care physicians in urban clinics,
- Who struggle with patient data management,
- Our product, MedSync,
- That centralizes patient data securely in real-time,
- Unlike traditional paper filing or isolated digital databases,
- Our product offers a cloud-based, HIPAA-compliant platform with integrated AI-assisted diagnosis tools.
EduTech
- For high school educators focused on blended learning,
- Who are searching for interactive content for STEM subjects,
- Our product, STEMify,
- That offers interactive 3D simulations,
- Unlike conventional textbook diagrams or YouTube videos,
- Our product provides an immersive AR experience synced with the school curriculum.
AgriTech
- For medium-scale farmers in temperate zones,
- Who want to optimize crop yield and reduce water usage,
- Our product, AgriOptima,
- That provides tailored irrigation schedules and crop analytics,
- Unlike traditional farming methods or general weather apps,
- Our product uses satellite imagery and IoT sensors for precision agriculture.
Conclusion:
Sergey
In our ultra-competitive age, a lucid product value proposition can propel you from obscurity to the limelight. This clarity fosters alignment within your team and crafts a compelling narrative for your clientele. By embarking on this meticulous analysis, you dodge the pitfall of launching a redundant "me too" product, ushering in genuine value for your audience. There is no one-fit-all approach, so you can always experiment.
