Value proposition is probably the trickiest work that a product manager would have to do. Recently I worked with several colleagues on the value propositions for their products and it was fun.
Good value proposition should be a simple one sentence describing the product and compelling enough for readers to take the next step. Yet, it should not be too laden with jargons, "warm and fuzzy feeling", or full of big empty words… Tangible results in one sentence.
I wrote about a process to come up with a value proposition a couple of years back in this blog and now looking back, I don't think it has changed that much. Here's the pictorial view of the process:
The process is simple:
- Market segments: which target market segment(s) that the product will serve
- Key Product messages/statements: these are the benefits that will solve customers' problems
- Features: this is how the product will solve the problems
- Competitors: the main competitors in the target segments
- Competitive Analysis Differentiators: the product's differentiators deriving from the product's strong benefits that competitors do not have
Of course, you can always "word smith" it to make it fit your product and your company brand strategy. Also, what I have found is that the competitive piece is best for your sales force and the rest is the key value proposition for your customers. Here are the two examples that I found:
- Weak value proposition: "ABC Corp. is the premier B2B portal for small businesses looking to grow" – very subjective (premier of what) and did not deliver tangible results to its customers (growing businesses how)
- Strong value proposition: "XYZ Corp. is the exclusive provider of patent-pending project management software for paving contractors, saving US contractors over $34M in 2005" – Market segment is paving contractors; Benefit: saving contractors $34M; Features: patent-pending project management software. It has all the elements above plus a differentiator: patent-pending.
I welcome comments and suggestions to make this process better.