Value Proposition Design
Any promise, which a company makes, of the value to be delivered to its customers, is known as a value proposition. It is essentially the reason given to a prospect for purchasing or consuming the company’s product/service. Creating, refining, and then testing these value propositions is, therefore, called value proposition design.
From the above definitions it is clear that the ability of an individual to offer value through a new feature, service, or an innovative product such that the prospects are convinced that this particular product or service will better fulfill the needs, as compared to other similar offerings, is known as his value proposition design skills. These skills mainly encompass the ability to make decisions regarding the jobs a product or service will get done for the prospects, how the product/service shall provide that value, and the extent to which the pains and gains of customers will be impacted.
Why is value proposition design important
Every company struggles to create the products and services that the customers really want. After all, that is the key to increasing sales. Value proposition design is important for bringing out the desired results from these struggles because it is helpful in designing, testing, and successfully delivering to the customers the value that they want.
By simplifying complex ideas and organizing information such that all practical and important details are highlighted, the value proposition design helps organization understand the customers’ needs in a very simple way. Consequently, organizations are able to design effective value propositions and come up with profitable business models, which target the most pressing needs of the customers directly. Since it ensures that the most important assumptions and hypothesis are tested, value proposition design minimizes wastage of time as well as the risk of failure.
How to improve value proposition design skills
Here is a guideline that any individual seeking to improve his value proposition skills must follow:
- Conduct a thorough market research. When attempting to improve your value proposition design skills, your top priority should be conducting a thorough research in order to identify customer pains and needs. Only then will you be able to figure out the job(s) that you wish to get done for your customers through your product/service. The ideal value proposition design, i.e. an offering that minimizes customer pains and maximizes their gains, will automatically result if you try to understand your customers and empathize with them.
- Ensure a good fit. In order to improve your value proposition design skills, you must ensure these three types of fit: problem-solution, product-market, and business model fit. In simple words, you must have evidence that your potential customers really do care about the jobs that you intend to get done for them, the pains you wish to minimize, and the gains that you plan to maximize. Also, you need to make sure that your product/service actually provides the value that you intend to deliver and it’s not just a stated benefit. However, most of all you should be sure that the value proposition you have designed is a good fit for your business model i.e. it is a profitable and scalable idea.
- Make prototyping a habit. It is always better to ensure that once it is launched, your customers will be convinced of your product/service’s superiority over other substitutes. Therefore, you must test your assumptions and hypothesis through prototyping. Developing rough and inexpensive model or sometimes even launching a limited edition can be a great idea to reduce the risk of failure and minimize potential losses.