After finishing my Indian Institute of management Kozhikhode’s Executive Management Programme, I was really looking forward to applying the knowledge and the skills. One of the areas that sounded interesting to me was product management. So, I enrolled into Indian school of business’ product management programme.
Currently, I am going through it, and I have been super excited from the new learnings. While I was doing research on a topic, I ran into a YouTube video from Harvard innovation labs by speaker Michael Skok about value proposition. I loved the learnings from it and if you are interested in product that not only sells but also resonates with your audience? Then you will love the learnings I am going to share here.
1. The Cornerstone of Success: Importance of Value Propositions
Compelling value proposition is the secret sauce, which is a solution that solves a problem that’s valuable for your customers. This factor itself is the heartbeat of your business!
2. Tailoring Your Value Proposition: Know Your Audience
It is critical to know who is facing the problem you are resolving i.e. target audience who will be benefited most by this solution. Understanding your target audience is like having a GPS for your business journey. By pinpointing their specific needs, you can craft a value proposition that hits the mark.
3. Crafting Winning Value Propositions: Frameworks
I really admire the 4Us framework shared by Michael in the video. Its great way to verify if a problem is worth solving in the form or product or a service. Ask if a problem you are trying to solve meets the criteria of one of the Us as below:
- Unworkable– e.g. the challenge faced by new iPhone users when the device first launched. Users struggled with activating their phones and accessing iCloud services for contacts and calendars, leading to widespread dissatisfaction leading changes within Apple and in industry.
- Unavoidable– e.g. the impact of the COVID-19 pandemic, which led to widespread adoption of masks and health safety measures, demonstrating how certain health challenges are unavoidable.
- Urgent-e.g. the menopause problem in mid-age women, which was being driven by one of the groups as innovation project in the video, for women undergoing the symptoms its urgent.
- Underserved-e.g. the Kenyan coffee market, where Kenyan consumers, particularly those with lower incomes, could not afford Kenyan coffee products and had to resort to cheaper alternatives. This situation indicated a gap in the market where the local population’s needs for affordable, quality coffee was not being met.
So, if answer to the U question(s) is yes, then it’s a problem worth solving.
4. Tapping Into Hidden Desires: Latent and Aspirational Needs
Another important aspect deals with latent needs of the customers as an example iPad which started as a nice-to-have product but gradually became a must-have product hence discovering and understanding the latent and aspirational needs can transform your product from a want to a need.
5. The Ecosystem Effect: Dependencies and Integration
Understanding your customer’s existing ecosystem is crucial e.g. when we think about EV (electric vehicles) we must also consider its dependency on availability and accessibility of charging stations. The convenience and practicality of having an EV is significantly diminished, if there is no network of charging stations. Therefore, customer may not opt for EV (buying or renting) due to such concerns, especially for long trips.
6. Standing Out in a Crowded Market: The 3D Breakthrough
Achieve market differentiation with a 3D breakthrough – disruptive, discontinuous, and defensible products. That’s how you break through the noise and capture attention. Disruptive innovations fundamentally change market dynamics, making products more accessible. Discontinuous innovations represent significant technological leaps, creating new markets or altering existing ones. Defensible products have a sustainable competitive edge, often through unique technology or strong brand identity. This strategy is pivotal for companies seeking leadership and innovation in their industries.
7. The Ultimate Test: Evaluating Business Viability
Finally, does your value proposition have legs? Assess its viability with the ‘gain/pain ratio,’ this is an important evaluation tool for product viability, balancing customer benefits (gain) against costs or difficulties (pain).
A successful value propositions typically offers high gains compared to pains, therefor enhancing customer appeal. This ratio guides product design, focusing on enhanced benefits and minimize drawbacks in it. It’s most helpful in decision-making regarding prioritization of features, pricing strategies, and marketing. More focus on maximizing user benefits while addressing potential inconveniences. This is crucial for businesses to develop products that customer would love and resonate with, ensuring greater customer satisfaction and product adoption.
Call to Action
Inspired to turn your idea into a success story? Share your thoughts or ask questions in the comments below. Let’s start a conversation and keep the innovation train moving!
Reference : https://youtu.be/q8d9uuO1Cf4?si=ekys7Py8V9cxVFle