A value proposition is a statement that explains how your product solves problems. These problems affect a specific market and user. Your solution (your product) needs to be uniquely differentiated in this market. This is why we’re always talking about your product solving an obvious unmet need. What’s lesser known by those looking to achieve success in their product business, is that people aren’t buying your product; they are buying your value proposition. This is because your value proposition speaks to them. It helps them understand why they can’t live without your solution (product). So how do you build a strong value proposition for your product business?
How to create a compelling value proposition
You will need to have answers to the following questions to have all the information you need to build a strong value proposition.
What problem does your product solve?
If you conducted adequate market research then you’ve found not one, but lots of problems that need to be solved. This is the time to get focused. Lots of product businesses lose their way at this step by trying to be all things to all people. That unfortunately means you’re nothing to no one. Instead, focus on one problem – the biggest one. Target the biggest problem that affects the largest number of people and go from there.
What area of the market suffers from this problem?
If the problem you are about to solve is helping fix cars, who is that problem experienced by? Mechanics or just regular everyday drivers? Both of these markets experience these problems. On one hand you’ve got DIYs (do-it-yourselfers) and on the other you’ve got trained professionals that do it all day. Are you helping one, the other or both? I feel compelled to mention again that you should pick one. Niche to get rich. However, whether you help one, the other or both, your value proposition needs to clearly state who you’re helping and why.
How does your product solve this problem?
Identifying the problem is one thing, solving it is another. Your value proposition will need to explain how you solve this problem. Don’t break out the blue prints for this conversation. Product management tough love: no one cares about your technology. Don’t bring it up unless you absolutely must. Instead, describe for people in layman’s terms how you go about solving their problem – now this they care about! Don’t confuse, just explain and in a simple and straightforward fashion.
What benefit comes from using your product to solve my problem?
Changing habits is hard. So if I’m going to use your product to try and solve my problem, there better be a good reason. Be prepared to speak to what we refer to as the ROI (return on investment) for your product. Following that car fixing product example, is my car expected to run longer, perform better, save me money, skips visits to the dealership? Help me understand why I need your product.
How is your product differentiated from the competition?
Your product will never be the only one on the market. In fact, this is a well known anti-pattern – you never want to be the only one in your market. So competition is a good thing; however, you still need to be able to explain how your product is different. Is it faster, cheaper, better? It’s great to be able to say these things, but you need to be prepared to back it up with proof. How exactly is it faster and better? Remember to explain it to me like I’m five. Simplicity is key. Stay away from the tech jargon.
In summary, a strong value proposition will effectively describe the problem your product solves and why that’s important. If you can do these, you are off to a great start.
Keep in mind that your value proposition will evolve over time. Don’t feel like you need to perfect it before you test it – this is a mistake. Instead, test constantly and use the feedback to make it stronger over time. A well constructed value proposition can be the difference between a successful product business and a failed one.
Visit our website at NxtStep.io for more information on how we can help you refine your product’s value proposition, or contact us at hello@NxtStep.io. For more product advice, subscribe to our newsletter or YouTube channel.