Is your value proposition aligned with customer needs?
Are your customers or partners satisfied?
Are your products and services hard to replicate?
Does each of your product or service offer great value for money?
Business Analysts working in startup environments or in the strategy function of businesses will often be faced with situations where they are required to define the value proposition of products or service, in collaboration with business owners. Business owners looking to define their business model will also need to consider what their value proposition is in order to grow their customer base.
A business or idea can’t just be different or unique for the sake of it. The value proposition defines the “reason-for-being”, that is, why it exists. Businesses have heard this call over and over again but some still struggle to grasp it or clearly define it.
The value proposition is the reason why customers turn to one company over another, and can be viewed as the collective attribute(s) or a bundle of services/products that satisfy the unique needs of the specific customer segment a business serves.
What Is A Value Proposition?
A value proposition represents what a customer is willing to exchange for having their needs met - BABOK® Guide
A value proposition may be tangible or quantitative, in the sense that a business could be helping their customers save time, save money or increase revenue. It can also be intangible or qualitative, that is, the business may be delivering superior customer experience or delivering a flawless product design – attributes that solve key customer problems.
This post highlights key steps to identifying a unique value proposition. So, if you’re a BA looking to define the value proposition of a business, here are some tips for getting started.
1. Understand the target audience's pain points
Contrary to what some may think, it doesn't start with identifying the solution. Rather it begins with having clarity of the problem the target audience is looking to solve. Keep in mind that this isn't always as obvious as you may think it is. For this reason, you need to understand customers. Once you have clarity on what your customers actually want, it will become easier to identify their views on what they are looking to accomplish by using a specific product/service, and identify ways of delivering the service or product in a manner that resonates perfectly with the target audience. This will be the business’ “reason-for-being” in the eyes of its target audience.
2. Study the competition
It's interesting to note that not every business pays attention to its competition. Caught up in the 'uniqueness' of their idea, they are led to believe their solution is better or different. It's good to have this confidence, but it's erroneous to think others may not have something similar or more effective. Hence, it's always wise to study the competition and rank where a product or service stands against competition. Business analysts should spend some time studying the level of competition posed by other products or services, and define ways to stay ahead of the game.
3. Validate the value proposition
The ultimate measure of uniqueness can't be found in the boardroom. It's in the hearts and minds of the target audience. Do not be afraid to take it out to them to research the appeal, relevance and uniqueness of the value proposition. They may embrace, reject or trigger the need to change portions of it. Where possible, do not allow poor sales figures to tell you you've got it wrong.