FATA #13/ Value Proposition
The concept is to focus on value creation versus simple solutions and services. One way to do this is to put your customer's needs before the company’s deliverables.
There are two critical lenses for a great Delivery Manager to look through to decide what functionality a product or service should have: complexity and value.
Complexity- is the effort associated with delivering such a product to the customer.
Value — is the benefit that a customer gets by using a product or service to satisfy her needs minus related costs.
This article will focus on value proposition: what it is and how to design and validate.
Golden Circle model is focused on how leaders can inspire cooperation, trust, and changes.
- Why ? — it’s not about money/ it’s about purposes/goals/beliefs
What is a value proposition?
A value proposition is a statement that classifies measurable profits considered customers can expect when buying a product or service.
Value proposition specifies why a customer should purchase it, and how the value of the product or service is differentiated from similar offerings. Creating a value proposition is a part of a business strategy.
Important factors for Value Proposition:
- Specific/Qualified value
Areas while creating value proposition:
- Who is it for? target customers and target market segment
- Why do they need the product or service?
- What problem does it solve, or what opportunity does it provide?
- How is it unique? What difference will it make? How will it add value?
- Does your product serve a large and growing market ?
Value proposition structure:
Evaluating a value proposition is very similar to evaluating art. It is a subjective process, and others may disagree with you. We can verify by using the following questions:
- What product or service is your company selling ?
- What is the end benefit of using it?
- Who is your target customer for this product or service?
- What makes your offering unique and different?
Successful people and organizations express why they do what they do rather than focusing on what they do.
Your “Why” is a very impactful way to communicate with other humans, define your particular value proposition, and inspire them to act.
Value proposition structure:
- Subheadline or a 2–3 sentence paragraph
- Three bullet points
Value Proposition Design
Value Map and Customer Profile.
What is value proposition canvas ?
The Value Proposition Canvas can be used both for refining an existing offering or launching an entirely new product in the market. The Value Proposition Canvas zooms into the details of two of the builfing blocks of the Business Model Canvas.
Value Proposition Canvas Deep Dive
Create value -> Fit -> Observe Customers
The Value (Proposition) Map -> The Customer (Segment) Profile.
Product and Services
Three components of Value Map: Product and Services, Paom relievers, and Gain creators.
Types of producrs or services:
Different levels of fits:
- Problem-solution fit — provide evidence that customers care about your value proposition or start over with designing a new one.
- Product-market fit — test it with prototype and MVP
- Business Model fit — takes place when you have evidence that your value proposition can be embedded in a profitable and scalable business model.
You do not have a business model fit until you can generate more revenues with your value proposition than you incur costs to create and deliver it.
Value Proposition Validation
Each year more than 30k new consumer producrs are launches, and 95% of them fail.
Validations ways: Pay-per-click advertising, A/B testings, clickable prototype, and MVP.
Prototyping — Desirability -> Feasibility -> Viability
Hypothesiz -> Experiments
Card for testing experiments — https://assets.strategyzer.com/assets/resources/the-test-card.pdf
As a rule of thumb, start cheap when uncertainty is high and increase your spending on experiments with incerasing certainty.
Tips for idea validation:
- Customer say != customers do
Reasons to use pay-per-click (PPC) advertising for idea validation:
- Traffic amount
- Target people
- Raise awarness
- Easy to launch
- Quck validation
The goal of Value Proposition Design is to test as quickly as possible. This process is iterative: to learn, create better designs, and test again. Before investing time and money into a real product, it is recommended to test the idea, To do this, you need extract hypotheses, design tests and experiments, capture learnings, and make data-drivern decisions.