Getting to the CORE of your Value Proposition
Everyone that works in a product organisation in a product manager or product leader role must have come across the term “Value Proposition” at some point. There are many frameworks around that can help you to build a value proposition. Some of the most well-known examples are the Value Proposition Canvas (a.k.a.) Pains-Gains model, the Product Vision Board or the Value Proposition that is described in Crossing the Chasm. Harvard Business School has also defined a model with 3 components to map a value proposition. Myself, I’ve been trained at Philips with the TIA-BRtBS-model from Outside In, and have seen plenty of examples based on something that was called the “Value Proposition House” (and looked like this).
So many choices, which one to pick?
As you can see there are plenty of models to build your value proposition. How do you decide between the different models to use? Or better yet: why would you even use a model to begin with?
You want to use a model to build your value proposition as it supports a reflective process to challenge your own thoughts.
The honest answer is: it doesn’t matter. No one really cares if you map out your ideas or thoughts in a value proposition canvas. (Of course this may be a required process that your organisation wants to see). The reason why you want to use a model to map out your value proposition is that it can help you to build better products. Many of these models help you to bring focus to your product development. It helps you to structure your thoughts and reflect on the product that you are building. It helps you to answer the question: “Why”. The nice thing about any of these models is that it can structure your thoughts.
The real value for any of these models is in the thought process that it facilitates.
Why you shouldn’t pick any model
The purpose of building a value proposition is that you can set your north star. This is the product that you are building. You’ll use the results to align all your development efforts, sales pitches and marketing collateral. Essentially you want to have everyone in the organisation tell the same story.
As with any model there are two major risks that you run: (1) people don’t know the model so you have to spent the majority of your time explaining the model instead of the contents, or (2) people are completely evangelical about a specific model which means they cannot accept that you’ve selected this specific model. In both cases the model distracts from the actual contents.
Therefore it might be better not to pick any model at all when you present the results of your value proposition.
But wait? How do I then get my value proposition across?
Get to CORE
There are two examples that I find strong when it comes to presenting Value Propositions. Geoff Moore describes how you can explain any value proposition with a single sentence. You fill out the blanks for the specific product or service that you are working on.
For [target customer] who [needs or wants X], our [product/service] is [category of industry] that [benefits]
Steve Blank has even dummied that down to the much simpler sentence:
We help [X] to [Y] by [Z]
Peter Sandeen wants to cut out even more and says you only have to answer two questions. Answering these two questions makes you skip all the marketing trash.
(1) what makes you valuable and (2) how can you prove it?
The beauty of using these simple sentences is that you can use them everywhere. They are easy to remember. You can put them on a slide. You can keep repeating them until everyone is sick and tired of them. But…that is exactly what a value proposition should be. Everyone should have the value proposition embossed in their brains. Value propositions should focus all the efforts of a product group on serving that single purpose.
So, why are you proposing something else? Isn’t that yet another model?
Well, to be honest, I have trouble remembering all of these models. Since there are so many I tend to confuse things or mix things up. That’s why I have created an acronym for myself that I find easy to remember and that helps me to address the most important aspects of a value proposition.
I only have to remember that the value proposition is the CORE of any product (team). Whereby CORE refers to the following items
Customer
Who is the target audience for this product? If you want you could even quantify this with market intelligence data. Always try to think in behaviors that categorize this group, not in demographics. (Example: ‘Customers that want to find a taxi ride from their current location’ would be the target customer for Uber)
Offer or Opportunity
What does your company offer to these customers? Or what business opportunity do you see for these customers. It doesn’t necessarily have to be a product. It could also be a service. Or it could be a better way to organize a company. (Example: ‘We provide a mobile application that matches drivers to rides and provide accurate information on your scheduled ride’ would be the offer of Uber).
Reason to believe us and buy from us
How do you convince that customer to purchase from you (and not from a competitor)? Be specific. This is where you describe how you will tackle the opportunity you see. (Example: ‘Everyone can be qualified as a driver for Uber. Searching for a ride can be done in several seconds as we know the user’s location. Payment for the ride to the driver is guaranteed by us’ could be reasons to buy from Uber).
Excellence
Finally, state where you outperform others. This can be at any moment in the value chain. (Example: ‘We have the largest pool of drivers, are the easiest and fastest to search for a ride, provide you with the most accurate feedback on when you can expect your ride, and are the simplest to pay’ could be reasons why Uber excels compared to other taxi firms)
So there you have it. You’ll be able to build great value propositions if you just remember that it is the CORE of any product. I hope this acronym serves you as well as it has served me.
I’m happy to hear your thoughts about this article, value propositions or product management. Do no hesitate to leave a comment.
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