This is a continuation of my ‘Aha’ moment and experience at the crush workshop discussed in the immediate past blog. The focus here is on another interesting concept I learnt; the value proposition. Simply put, this is a statement which identifies clear, measurable and demonstrable benefits consumers get when buying a particular product or service.
Ideally, the value proposition should convince consumers that the product or service you are offering them is better than others on the market. Visually, the value proposition canvas looks like this;
The value proposition introduces a company’s brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business (Investopedia). Successful business should resolve a problem or an underlying need. Consequently, the value proposition canvas is based on the customer’s underlying need that should be fulfilled by the product or service offered. It is the value that one creates for the customer based on their pains, jobs and gains.
The value proposition has certain essential elements that I will explain in detail below;
Product or service:
This is ideally what the entrepreneur is offering to the customer as the solution to the problem which is either a service or product. Satisfying customers with the solution is the source of value creation because customers are always looking around for products/services with the best possible value.
This is the problem that the customer is thinking about, what keeps the customer awake and requires a solution. These jobs can be emotional, functional or social et cetera. The entrepreneur must think critically on what needs to be done to accomplish the task to satisfy the customer’s need.
What would make the customer happy in terms of value, simplified as what they are looking to benefit out of using the product or service.
What are the problems that the customer needs resolved or wants to avoid? The gains and pains may not seem important but they are powerful in decision making in a customer’s mind.
What value will the customer obtain from the product or service that you are offering?
What are those product/service features that will remove current frustration from the customer?
By using the value proposition canvas and following the steps above, an entrepreneur is able to understand the customer’s needs, frustrations, thoughts, preferences but also biases which make judgment and decision making easier while saving turnaround time.
The value proposition therefore gives reassurance to the customer that the business will give them the best possible value. It also makes them feel that they are actually gaining more from the product or service which they will not gain from the other competitors in the market.
It is also important to show the unique selling point of the business which should be convincing in addition to competitive pricing which are all vital to business success.