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What is Value Proposition Design

stockicebergOften expressed as a condensed statement representing the "elevator pitch" for your company, your value proposition statement is just the visible tip of the iceberg.

Your Value Proposition is much more than a marketing or positioning statement for promotional purposes. Expressing the very foundation of your business, it emerges from a rigorous and comprehensive analysis of several factors. Design starts with a solid understanding of your target customer, their needs, goals, and motivations. Then, the individual components of your market offering(s) must be connected to specific customer needs. In situations where you might be simultaneously serving multiple customers, a multi-dimensional Value Proposition may be needed to be effective.
The way your offering(s) connect with your customers' needs must also take into consideration what your competitors are doing.  Creativity and innovation are needed to develop elements that are not only compelling to the customer, but also provides distinctive differentiation from your competition. Potential areas of innovation include finding new ways to meet specific needs, adding features to address unmet customer goals, or reaching beyond just functional needs.  Any identified potential enhancement must then be validated with customers to assure the Value Proposition is truly delivering what matters to them.  This is often done in a cyclic pattern of customer feedback and value proposition changes to arrive at a final compelling and competitively superior result. feedback
 
The resulting design activity is a messy, non-linear, iterative process involving a continuous back and forth between designing prototypes and testing them to evolve a high quality, compelling, and competitive superior Value Proposition.  If you haven't been through such a process, then you are likely not to be among the 5% of business that have a high quality value proposition, and likely to be in the 2/3 of companies that will fail to survive 10 years.  messy process
 

What Can Value Proposition Design do for Me

Value Proposition Design helps you tackle the core challenge of every business ― creating compelling products and services customers want to buy.
person

Gain clarity in what creates value for your customers.

Value Proposition Design provides a structured approach for understanding the more subtle patterns of what creates value for your market segments.  This knowledge and insight will allow you to be more effective in innovating competitively superior products and services that directly target your customers’ most pressing and important needs, points of pain, and desired gains.
team

Leverage the skills and experience of an aligned team focused on the customer.

Equip your team with the shared language needed to conduct more strategic and meaningful conversations, get aligned, and focus their different perspectives on the customer. This will produce actionable outcomes beyond just technology, products, and features, with a focus on creating real value for your customers and unique differentiation for your business.
team

Minimize the risk of market failure and avoid wasting time on ideas that don’t deliver value.

Value Proposition Design provides a structured approach for relentlessly testing the assumptions and hypotheses underlying your ideas in order to reduce the risk of failure. This will allow you innovate and test bold ideas and shape them to customer needs, and assure their customer value before investing the considerable effort needed to implement your plans and ideas.  You only invest in the ideas with the highest probability of success.
winning product

Grow your business by delivering what customers want

Value Proposition Design help you innovate and deliver compelling, competitive superior value propositions that delight and attract customers, and stand out from the crowd. The result provides the foundation for driving business growth.
 

Who Can Benefit from a Design Effort

You can benefit from Value Proposition Design whether you are creating something from scratch on your own or you are part of an existing organization.  A start-up entrepreneur will deal with different constraints than a product manager within an existing organization.  However, the techniques of Value Proposition Design apply to both contexts.  Depending on your starting point they are executed in different way to leverage different strengths and overcome different obstacles.

NEW VENTURES - Individuals or teams setting out to create a great value proposition and business model from scratch.

new venture Main Challenges
  • Produce proof that your ideas can work on a limited budget.
  • Manage involvement of investors (if you scale your ideas).
  • Risk running out of money before finding the right value proposition and business. model
Main Opportunities
  • Use speedy decision making and agility to your advantage.
  • Leverage the motivation of ownership as a driver for success.

ESTABLISHED ORGANIZATIONS - Teams within existing companies setting out to improve or invent value propositions and business models.

Office Building Main Challenges
  • Get buy-in from top management.
  • Get access to existing resources.
  • Manage cannibalization.
  • Overcome risk aversion.
  • Overcome rigid and slow processes.
  • Produce big wins to move the needle.
Main Opportunities
  • Build on existing value propositions and business models.
  • Leverage existing assets (sales, channels, brand, etc.).
  • Build portfolios of business models and value propositions.

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