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The value proposition is the single most important element in a brand’s positioning strategy – and often defines its success (or failure) in the market.
The value proposition is a statement which articulates the value that the brand promises to deliver to its customer. It seeks to answer the question “Why would a customer buy this?”. It must be distinctive and persuasive in order to convince a potential customer to buy from the brand; rather than sounding similar to other competitors in the market.
The most basic of value propositions will only focus on articulating the features and benefits of a product, enabling customers to understand it’s functional benefits. This is a surefire way to position the brand as a commodity and not gain significant market share.
To really win in the market, brands need to go deeper with their value propositions. This means explaining the problem that the product or service solves and, how it can create positive gains and improvements in its customer’s lives.
Why is a value proposition so important?
If produced well, this can help to improve brand awareness and preference. It is critical that the promise of the value proposition can be delivered to customers on a consistent basis – this will lead to loyal long term customers.
Great value propositions are built from a robust set of customer insights – knowing what the customer wants and articulating the value proposition in a way that strongly resonates with them.
What is the value proposition canvas?
The value proposition canvas is an excellent tool which can be used to align a product or service more closely to its target customer’s needs. It was initially developed by Dr. Alexander Osterwalder as a framework which helps businesses to build robust customer value propositions.
It can be used when there is a need to polish an existing offering or, when a new offering is being developed.
Customer profile map
In the first section of the value proposition canvas, a customer profile must be created for the target customer – this will reflect the customer’s individual jobs, pains and gains.
- Customer jobs – The social, functional and emotional tasks that customers are trying to achieve – this includes desires that they need to satisfy and problems that they are trying to solve.
- Gains – The benefits that target customer desire and, the things that will delight them if they get their job done well.
- Pains – The negative experiences, risks and emotions that the customer experiences by not getting their job done.
Value proposition map
The second section of the value proposition canvas focuses on how the business’s product or service can align with the customer by helping them get their job done, alleviate their pains and create positive gains in their life.
- Gain creators – How the product creates positive gains and how it will benefit the customer.
- Pain relievers – How the product will remove the pains from the customer’s life.
- Products and services – The products and services which the business is offering to the customer and which provide pain relief and gains for those customers.
Achieving the fit between a customer and value proposition
A fit is achieved when the product solves the most significant pains and, delivers significant gains to the target customer. It is important to validate the hypothetical customer value proposition with real-life customer data (or with data from prospective customers if the brand is just launching).
The jobs-to-be-done theory was created by Clayton Christensen in 1999 through his best selling book, The Innovator’s Solution. It is closely related to the value proposition canvas but, takes a more fundamental look at the customer’s motivations behind purchase decisions. This is based on the idea that people will purchase a product or service to get a “job” done. With the jobs to be done theory, brands are more likely to create solutions that will win within their industries.
When brands put the jobs-to-be-done theory into practice, they give themselves a competitive advantage in the marketplace:
- Consumers will buy products and services to get the job done.
- Brands can move beyond functional benefits and can then talk about the emotional (gains) that their product or service offers to customers.
- Customers default to using the brand to “get the job done” – building brand loyalty.
- Product development teams can focus on a more meaningful measure of analysis regarding what matters to customers – how well did we get the job done?
- A better understanding of the customer’s job-to-be-done makes marketing more innovative and effective.
It is good practice to consider the customer’s “jobs-to-be-done” so that the right solutions can be offered.
Jobs-to-be-done can help develop a product innovation strategy
Product innovation should act like a compass which points the brand in the direction which delivers the most value for the customer. The jobs-to-be-done framework (and value proposition canvas) can be used to guide product innovation. This is achieved by keeping the brand focused on the most important thing – the core functional job that the customer needs to complete.
Best examples of value proposition
Stripe’s “Web and mobile payments, built for developers”
Stripe is an online payment tool which allows businesses to accept and manage online payments. Its target market is business owners and developers. The primary benefit that Stripe offers is “simple and streamlined payments”, with emphasis on the brand’s simple to use products.
Uber’s “Get there: Your day belongs to you”
Uber is the world’s most successful ride-hailing app and, it hits its target consumer right where the problem lies; the elimination of problems when travelling. Uber’s proposition focuses on its customer’s needs by including the word “you”.
Target’s “Expect More, Pay Less”
Target zeroes in on cost-conscious shoppers who are looking for quality items. Their value proposition shows shoppers that they can get quality products at affordable prices. It hits the right balance between quality and affordability.
Skillshare’s “Learn a New Skill Each Day”
Skillshare’s target market is those customers with creative minds and entrepreneurial spirits who are looking for affordable and easy to learn online courses. They hit the market by providing a quick and focused on-demand learning experience via bite-sized lessons.
Evernote’s “Remember Everything”
Evernote targets students, busy individuals and professionals. Its app allows easy organisation for notes, photos, audio clips and other data – enabling its users to organise all of their ideas in one place. Evernote enables users to organise all of their important ideas so that they never forget an idea or project.
Spotify’s “Music for Everyone”
Spotify made sure to include every music lover out there with their fun proposition. It does not single out any particular segment because it provides music to suit everyone’s taste.
Bitly’s “Shorten. Share. Measure”
Bitly’s value proposition features exactly what it has to offer – no more, no less. It focuses on three important elements in link management and, it works because it removes any unnecessary language.
Creating a good value proposition can enable a brand to sharpen the way they articulate their offering to customers and increase the likelihood of gaining market traction (or growing market share). Developing this requires an understanding of exactly what customer’s issues and needs are. The value proposition is ultimately the articulation of how the brand will deliver on the customer’s needs better, cheaper and faster than the competition do.