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In the whirlwind of discussions with management about the future direction of our SaaS products, it's easy to get swept up in the rapid advancements of AI and lose sight of our Value Proposition. I'm writing this article as a reminder to myself and others to stay grounded and make the best choices for our products, even in the face of external pressures.
A Value Proposition is a concise statement that tells our target users why our product or service is the best choice for them. A meaningful Value Proposition not only addresses users' pain points but also highlights what sets us apart from the competition.
Some key elements to consider when crafting a Value Proposition include: target users, problems solved, unique advantages (Killer Features), and data-driven insights.
When prioritizing our product roadmap each quarter, I always keep the company's development goals in mind. But I've found myself wondering, "How does this differ from our Value Proposition?" "Can I draw a direct parallel?"
After careful consideration, I've realized that the two operate on different levels. Company Goals drive the overall strategic direction, encompassing factors like market share and CSAT over a span of one to three years or more. For example, a company goal might be to provide users with efficient solutions and become an industry leader within X years.
On the other hand, a Value Proposition is closely tied to the tangible features of a product. Extending from the company goal, it could be: Streamlining workflows and allowing users to focus on what matters most through intuitive interface design and task automation.
1. Identify the product's target users
This aligns with the Discovery phase of the Double Diamond framework. Through qualitative and quantitative user interviews and data analysis, we can create Personas.
In B2B, which is my current focus, I believe behavioral patterns and preferred product types are even more crucial than the usual Persona elements like occupation, personality, needs, and pain points. Behavioral patterns should focus on the decision-making process, which involves multiple layers in B2B. Product adoption and promotion rely on long-term relationship building and maintaining product stability to establish brand trust.
Preferred products can be more intuitively explained as iOS vs. Android. In B2B, customers prefer products that can solve their entire workflow, which is why Microsoft can penetrate larger enterprises through Office 365.
2. Clearly propose solutions
With target users identified, it's time to roll up our sleeves and consider which pain points we can address. I also like to use User Journey Maps to break down user issues at each stage and see if they align with interview findings.
This is where we start planning features and figuring out how to respond to users' concerns. Of course, it's ideal to differentiate ourselves by looking at what competitors are doing.
I believe the most important aspect of this stage is achieving internal team consensus – value communication. This allows marketing and customer service units to more effectively convey the product's Value Proposition to users. Of course, this also involves communication strategies, which I won't delve into here.
3. Data-driven validation
Data flows through every step. Even before user interviews, we need to collect some key data points.
For a video editing tool, for example, 70% of people don't use advanced editing features, while only 30% use AI tools like Text to Speech. With this information, we can consider whether the pain points we aim to address align with our plans, while also taking revenue into account. If 30% of users account for 80% of the company's renewal revenue, further discussion and definition of the product's direction is necessary.
The above outlines my general approach to Value Proposition. Of course, the work doesn't end once features are launched. I prefer to validate whether our solutions align with users' pain points and needs after features are live. I also consider whether users request features we decided to forgo due to priorities, scope, or development resources.
Value Propositions should be dynamic, constantly reviewed, and adjusted based on customer feedback and changes in performance / market conditions.
Final Thoughts
Lastly, in product development, emphasizing the product's value proposition takes priority over optimizing metrics. Specifically, in the B2B domain, PMF starts with value proposition-market fit. If customers cannot understand your unique value, you don't have PMF.
By the way, this is the well-known Value Proposition Canvas (VPC) proposed by Alexander Osterwalder, based on the Business Model Canvas but with a greater focus on Value Proposition.
However, to me, the layout seems a bit odd. In the image, everything starts with the customer – what problems we're solving, what value we're creating, and the solutions. Given that we read from left to right, I believe the two sides should be swapped, starting from the circle on the left, moving to the square on the right, with the arrows in between representing the optimal Value Proposition solution.
