WHAT IS A VALUE PROPOSITION AND WHAT IS THE USE OF IT?
A value proposition makes clear what use (value) your product or service (proposition) has for your (potential) customer. Simple right? True, but in practice we notice that there is something more to it.
“Poets de Schoen B.V. has the largest selection of shoe polish in the world”.
Does this warm you up? We neither. In any case, we hardly ever buy shoe polish and if we do buy it at all, we mainly experience choice stress here. Yet there is already an element of a value proposition in this….
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At Duodeka, we regularly draw up and adjust value propositions. It helps us with new products (propositions) to:
To clarify the target group (customer).
Shape our marketing
Determine a price point
TRENDS
When we think about a value proposition, we first start thinking about general and higher trends. We believe that your proposition should be in line with longer-term trends. This also ensures that your product will not be overtaken by reality tomorrow.
Some examples of trends we see in the world of software development:
Speed
Software is delivered faster than ever
Interoperability
Software links (integrates) with more and more systems
Standardization
More and more is available ‘out-of-the-box’
Your proposition must therefore be in line with this and, better still, respond to it.
WHAT IS YOUR PRODUCT OR SERVICE
Of course it is good to know what exactly your product or service is. Try to make this as concrete and extensive as possible in the first instance. Name at least 7 possibilities of what you can do with your product or service.
For Poets de Schoen B.V. could you think of: cleaning shoes, having shoes glazed, painting faces, reselling shoe polish, etc..
WHO IS THIS RELEVANT FOR
You then need to determine for whom these options are relevant. First write down in general terms what type of customers can benefit from this.
For Poets de Schoen B.V. you could think of: shoe shiners, consumers, wholesalers, etc.. Here you immediately see a big difference in potential customers, namely: the end customer (consumer), the supplier (shoe shiners) and the B2B store.
WHAT ARE THE ALTERNATIVES
To be able to position yourself better, you also have to map out which alternatives there are.
For Poets de Schoen B.V. you could think of: buying new shoes, not cleaning shoes, cleaning shoes with a wet cloth, etc..
VALUE PROPOSITION = RESPOND TO PAIN POINTS
Now that you have all this clear, you want to know which pain points your (potential) customers experience. You can brainstorm about this yourself, but in our experience it is always better to discuss this and ask people themselves these questions.
You want to know which pain points they experience anyway, but also specifically which pain points they experience with regard to the alternatives mentioned. These conversations will give you insights that you would otherwise never or hardly have access to. They also help you determine the price you can charge and help you prepare your marketing texts.
For Poets de Schoen B.V. can you e.g. think about: buying new shoes is expensive and time consuming, dirty shoes don’t make a good impression, etc.
NOW REALLY CHOOSE YOUR CUSTOMER
If you have all this clear, you can really start choosing a customer. Think back to our first example:
“Poets de Schoen B.V. has the largest selection of shoe polish in the world”.
If Poets de Schoen B.V. If you want to target the consumer, you immediately see that this is not really a good value proposition. I don’t hear many consumers say: “Hey, what can I choose from little shoe polish….”. However, Poets de Schoen B.V. focuses on the supplier (shoe shiners), then it may already be a better proposition.
For the consumer, Poets de Schoen B.V. position themselves as follows:
“Put off buying those new shoes for a while and save money.”
“Look like the little man with shoe polish from Poets de Schoen B.V.”
VALUE PROPOSITION CANVAS
In this blog we have described how we proceed with the preparation and validation of a value proposition for new products that we want to bring to the market.
There are of course many more possibilities, theories and models to be found (online). For example, take a look at Frankwatching’s blog about the Value Proposition Canvas. This can be used after you have completed the Business Model Canvas. The image below is also from Frankwatching.