Want to start a new venture but not sure how to reduce the risk of failure? Everything will become clearer if you start by designing the product value proposition. In this post, we show you how to do this by taking into account your organisation's customer profile.
A value proposition (VP) is a statement of the customer value that your company delivers. Why should a customer buy your product or service? How do you solve their problem? What benefits will it bring them? With the concept of building the customer value proposition, you can verify at early stages whether a solution is viable. Instead of focusing on products and features, you take the perspective of customers and create values that matter to them. This has a not inconsiderable impact on the profitability of the business model, as you avoid creating products and services that no one wants to buy.
What are the elements of an effective value proposition? In today's fiercely competitive marketplace, a key determinant of a company's success is how well it identifies, articulates and communicates a unique value proposition to potential customers. What makes the value proposition stand out? Understanding the needs of customers is fundamental.
Find out now how to create a value proposition to increase customer engagement and loyalty.
How do you make your products compelling to your audience? The most successful companies are able to develop a value proposition that clearly articulates the benefits of their products and shows how they solve specific problems. The value proposition should always have the target customer in mind and show how your offering is both unique and better than competitor alternatives. When writing a value proposition, it is also important to understand the specific needs and concerns of the industry and customer group in question. Speaking their language ensures that the value proposition speaks to them. When trying to develop a persuasive sales strategy, be sure to avoid some common pitfalls. For example, the value proposition needs to be more than a simple slogan or statement of brand competitiveness. It
should also not be too complicated, as this may impair the recipient's understanding. Most importantly, it must not simply copy a competitor's approach, it must provide something real that you as an entrepreneur can differentiate yourself with.
The value proposition should first and foremost explain how the product solves the problems of potential customers. This helps to establish the importance of the product. The specific benefits of the product should then be highlighted. Finally, explain why your product is better than the competition, why the customer should buy it from you and not from your business competitor.
One proposal for the VP structure is as follows:
It is worth citing the example of a brilliantly constructed Value Proposition, which was supported by an analysis of its target audience:
The company Uber probably doesn't need to be introduced to anyone, but for the sake of clarity we'll say that they are the company that had the business idea of ordering taxis via an app on your phone. They based it on the ideas of convenience, freedom of movement and cost-effectiveness for the user relative to standard carriers. Today, similar services are already commonplace and the company has had to restructure its value proposition related to the simplicity of ordering into something better suited to the pain points of today's customer.
Their unique value proposition has become the slogan “We take care of your safety wherever you are”.
Uber expertly communicates here that their most important goal is to ensure the safety of their service users, which is further supported by the message contained in the “Community Code” and the listing of other safety-related functions provided to the user. They aim to pre-empt doubts and build confidence in the drivers of this corporation. The change in their value proposition was driven not only by the proliferation of similar services, but also by dangerous incidents (or even procedures) that happened to female taxi passengers.
By doing so, the company aims to address the underlying “pain point” it diagnosed when carrying out an analysis of its existing as well as potential customers.
Moving on, the value proposition, in order to be effective and ultimately achieve the success the company desires, must meet several criteria:
The creation of a value proposition statement can be based on a value proposition canvas - a tool that helps to brainstorm and find connections between what potential customers want and what the new product has to offer.
Can you protect intellectual property? Check: Intellectual property - why do you need to protect it and how do you do it?
Just at the very end, it is worth mentioning the complement to your value proposition. A great basis here will be the use of MVP and Design Thinking methodologies, which are responsible for designing and creating a product that has maximum value for the customer, with minimum complexity. We write more about this topic HERE (hyperlink to article).
It is worth remembering that successful product launches take time and effort, but with the right approach and the right tools, you can achieve success and gain the recognition of your target customer.
Do you have an idea for a new product and want to make it a reality? From device design and prototyping to product development and the implementation of new technologies, we will help you at every stage of your innovation. Take advantage of our free consultation to find out the estimated costs for design, production and implementation.
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