A value proposition is how your service or product solves a problem that your target consumer has, whether the problem is documented or anticipated, with regard to current market solutions. A value proposition can be something as simple as being cheaper, safer, or more convenient – or it can be something more complex such as having superior performance and specs, or more intuitive design and user experience.
One more time…
Basically, it’s a one line pitch for what makes your product or service worth using over your competition’s.
When forming a value proposition, it’s important to consider whether the problem you are solving is either documented and real, or addressing one that will shortly exist. In some cases, the problem is one that the consumer wasn’t even aware of at the time – in which case, you’ve just disrupted an industry.
Other important considerations:
- Is any part of your value proposition based on assumptions?
- What’s your mover position? Are you a first mover in the space, or is it saturated already?
- Is your problem an actual painpoint, or just a “nice to have?”
- How does your product differ from the status quo or alternative?
Theoretical: Fundco’s value proposition to solve problem X is that Fundco’s product is half the price and better designed than its competitors’, who also strive to solve problem X.
Real-life: Dropbox’s (a cloud-based file storage system that syncs across an unlimited number of devices) value proposition to solve the hassle of syncing up files across multiple devices is that Dropbox has a FREE service that eliminates the need for exterior devices such as USB drives, and uses a folder format that we are all already comfortable with.