VALUE PROPOSITION BASICS
• So what is a value proposition?!
• Why do we need a value proposition?
VALUE PROPOSITIONDefinition: A statement that describes what your company,
product or service will bring to your clients
• “Our solution X will help you work better and faster”!
• .. how does that help us develop the product and optimize the sales pitch? Everybody says that.!
• An old adage states that there are only three basic value propositions: save money, save time, waste money/time!
• To define it, a better insight into our customers and product is needed
VALUE PROPOSITION OF OTHERS
• Why did you buy your mobile phone?!
• Why did you buy your car?
VALUE PROPOSITION ELEMENTS
• We’ll use the “Value proposition designer” to define the elements!
• (note: Business Model Canvas is also recommended reading)
Source - concept and pictures
CUSTOMER PROFILECustomer jobs
• the tasks they are trying to perform and complete; the problems they are trying to solve; the needs they are trying to satisfy!
Customer pains
• negative emotions, undesired costs and situations, and risks that your customer experiences or could experience before, during, and after getting the job done!
Customer gains
• the benefits your customer expects, desires or would be surprised by; includes functional utility, social gains, positive emotions, and cost savings
VALUE PROPOSITIONProducts & services
• Which products and services do we offer that help our customer get either a functional, social, or emotional job done, or help him/her satisfy basic needs?!
Pain relievers
• How do our products and services alleviate customer pains?!
• Eliminate or reduce negative emotions, undesired costs and situations, and risks!
Gain creators
• How do we create benefits our customer expects?!
• Functional utility, social gains, positive emotions, cost savings..
EXAMPLE: NETWORK SUPPORTCustomer jobs
• Safeguard from network failure (functional)!
• Can be smug in front of the boss (social)!
• Feels good about network state (emotional)!
Customer pains (if they did it themselves)
• Cost of required backup equipment!
• Required internal resources!
• Incomplete knowledge of network!
• Loss of face!
Customer gains
• Quicker response time!
• Measure of success: uptime, cost!
• More likely to adopt if: cheaper, faster resolution ..
Products and services
• Monitor equipment and repair/replace if necessary according to SLA!
• Maintain a perfect record!
• Timely communication of failures!
Pain relievers
• Shared reserve equipment lowers cost for single customer!
• Minimal internal resources required!
• Lead engineers have an in-depth knowledge of customer network!
• Take the blame!
Customer gains
• Non-stop monitoring and preparedness!
• Ensure higher uptime and lower support cost!
• Try and lower costs and SLAs
WHAT ABOUT THE COMPETITION?
• Our product/service is in competition with others for the same “slot”!
• iPhone/Samsung Galaxy/Nokia Lumia!
• What are the crucial distinguishing elements of our value proposition? Why should the customer choose us?!
• That difference is the basis for your value proposition
EXAMPLE
“World's 5-star airline”“The low fares airline”
Perfect positioning!
A LOCAL EXAMPLE
• “We are good because we are old”?!
• Typical lack of differentiating vision
Source
What about your company?
FIND THE VALUE PROPOSITIONS
Your service Value proposition Main competitor Their value proposition
Some possible value propositions: cheaper, higher quality, longer warranty, changeability, scalability, ecosystem, safety, design, user experience..
BUSINESS FOR ENGINEERS
Jan Isakovic!@iYan
1: Customers and sales 4: Value proposition
2: Product conception 5: Core competencies
3: Minimum Viable Product 6: Company values