Value Proposition Design is the new hit methodology for innovating products and services that people truly need because they help them achieve what they want.
A value proposition is any promise made by a firm about the value that will be delivered to customers. It is simply the justification offered to a potential client for buying or using a company's product or service. Value proposition design is the process of creating, filtering, and testing these value propositions.
Based on that, the ability of an individual to offer value through a new feature, service, or innovative product in such a way that potential clients are convinced that this particular product or service will better fulfil their needs than other similar offerings is known as value proposition design skills.
Why is it important?
Every business strives to provide products and services that people truly want; which is a key instrument for increasing sales. Simplifying complicated ideas, structuring information and highlighting all practical and vital features, the value proposition design easily helps organizations understand customer demands. Accordingly, companies can create effective value propositions and viable business models that precisely address the most pressing demands of their customers. Value proposition design saves time and reduces the chance of failure by ensuring that the most critical assumptions and hypotheses are tested.
How to Design Your Start-up’s Value Proposition
Offering an amazing product or service does not always ensure the success of your start-up. Firms like Uber and Airbnb relied on strong, well-articulated value propositions. The successful design of a value proposition will highlight what your company does and why it is particularly positioned to solve the concerns of customers. Startups that fail to develop a good value proposition have a hard time attracting investors, consumers, and other stakeholders.
Building your start-up value proposition requires the following steps:
- Know your target audience
To create a value proposition that matches customers, you need to take a closer look at audience demographics such as gender, location, income, and job status.
- Your current client base
You need to focus on the features of your product or service, which your existing clients value the most. Also, you need to understand if they share the same traits or interests.
- Competitors
You need to identify the types of competitors, which attract your customers and if they miss out a niche market of high-value clients.
- Pains
Make a list of the issues that consumers bring to you and connect them to the value that your products/services deliver. Make an effort to convey this value with precision and clarity. Meanwhile, you need to highlight that you address something that practically every client is concerned about and are willing to resolve the pain points in detail.
- Show what makes you different
This step requires examining your business very well so that you can focus on the features, which no one else has like a customized software algorithm that allows you to deliver one-of-a-kind outcomes or a unique business model…etc. Consider what makes your start-up the right and only choice, and whether or not using such information in the value proposition makes sense. If you are not able to define what sets you apart from your competitors, you will need to come up with something new.
- Talk the way your customer does
Remember that the goal of your value proposition is to engage with your customers, not to show off industry jargon, buzzwords, and dry technical explanations.
To discover more about your customer speaking habits with regard to your product, conduct focus groups, send questionnaires, participate in forums, and monitor them on social media. Make a list of often-used terms, phrases, and syntax to utilize later while writing content.
- Write your value proposition
Upon collecting all the required information, you can start writing your value proposition. Don’t forget that it should include both: text and visuals.
Essentials of Value Proposition
To sum up, your value proposition should effectively reflect the needs of the customers and hence, you need to focus on the following essentials:
- Focus on functions, pains and gains, which are the most important to customers.
- Focus on unfulfilled tasks, unresolved problems, and unrealized gains.
- Examine functional tasks and address emotional and social ones as well.
- Consistently measure success in the same way that customers do.
- Focus on functions, pains, and gains that a lot of people have or for which some people are willing to spend a lot of money.
- On at least one dimension, outperform the competition significantly.
- Make your value proposition a unique one, which is difficult to copy, and is an integral part of great business models.
- Make multiple value propositions for the various types of clients, who interact with your product/service.
Positioning
It is simply the act of developing your proposition and image to stand out in the minds of potential clients. In other words, positioning outlines how a brand differs from its competitors and where, or how, it appears in the minds of consumers.
Internally, your positioning statement is very crucial to the rest of the process: aligning teams, employing the appropriate people, generating the best product, articulating the value of your work. Everything else will be easier, if you get your positioning right from the start!
What are the most successful used methods to position your start-up?
- Identify the market that your product or brand will compete in.
- Determine the dimensions that characterize the product's “space.”
- Collect data from potential and/or existing customers on their perceptions of each product/service.
- Analyze the mindshare of each product/service.
- Check the current position of each product/service in the product space.
- Determine the optimal mix of features for the target market.
- Examine the product's compatibility with the market.
Conclusion
In short, you need to design a unique value proposition and communicate it clearly in all possible channels. If you do not explain why customer should buy from you, you will lose the majority of them! To create a compelling value proposition, you should consider clarity, division of text and visuals, in addition to testing. Consumers will know why they are engaging with your brand and how it will give the benefits, they require if it has a well-defined value proposition. It also aids in the development of your brand's identity and differentiation from competitors.
If you are struggling to design your start-up value proposition or improve it to meet customer requirements, talk to our team of experts.