If You’ve Heard About Value Proposition for the First Time

Terminology, templates, canvases

Benefit − cost = value

“Value proposition” is a two-word term. Firstly, let’s figure out the meaning of its components in the simplest way possible. Value is cost subtracted from benefits. Roughly speaking, the value of a juicer equals the delight of fresh juice minus the amount of used electricity and water for washing. The value of being a designer is a designer’s salary minus living expenses.

Consequently, the value exists if benefits outrun costs. And the more benefits overwhelm costs, the more attractive a product or service is. For instance, the more powerful camera a smartphone is equipped with, the more desirable it is for Instagram users. The easier you start using a mobile application, the more time you spend with it.

And here we come to the second word — “proposition”. Value, especially that of a design solution, is not obvious for customers and end-users. We need a medium to inform clients about the benefits they may get if they start using our website, application, wearable device, etc.

The value proposition is a promise of the value to be delivered. By means of a text, video or picture you promise your audience they will enjoy what you offer to buy, install or subscribe to. If the value of a product is not articulated well, even a unique, cutting-edge, out-of-the-way, first-class, disrupting idea will be overlooked.

Value proposition as a phenomenon has been existing for ages, but only recently business people started thinking about it. Nowadays value proposition exists on the overlap between branding, business strategy, marketing, and design. There are three main points it explains.

  • Customers: who is it designed for?
  • Product or service: why is it the best choice?
  • Seller or producer: why should customers get it from you?

Experience beats features

There is a trick with the value proposition — you are not what you sell. A product doesn’t equal a producer. A design doesn’t equal a designer. One can be a savvy designer but have a weak value proposition of design services. Being a nice guy is not a profession. So, take a look at the slogan below.

E.g.: Simple fix for Dell laptops.

How probable is it that people choose this company among a hundred similar laptop-fixing firms? That’s why this is a poor value proposition. Just fixing laptops is not unique or self-explanatory. And how about this?

E.g.: We fix Dell laptops in just two hours.

That’s a stronger value proposition statement. They sell a deal — a unique speed of fixing, which others don’t offer. Of course, if this speed is not exaggerated boasting. Strong value proposition statements often are based on the experience, not features. But not every kind of experience counts.

E.g.: Our pizza is the tastiest!

Really? Every pizza pretends to have the best taste. It’s unproven boasting that is hard to believe.

E.g.: You get hot pizza delivered under 30 minutes or it’s free!

This is Domino’s Pizza value proposition. Unlike others, they sell responsible delivery service, not just an ordinary pizza.

Articulating a value proposition

Although the value proposition is pretty vague, it can be distinguished in brand slogans, landing pages, POS materials, packaging.

Brand slogans. A slogan is not a synonym to company’s value proposition, but it often expresses its main idea. On the other hand, a slogan is too short, and can not precisely express all the promised benefits.

Landing pages. A well-designed landing page includes a value proposition statement and illustrates it by video overviews, real-life photos, pieces of client’s feedback, and a beneficial deal. If a landing page is composed well, the audience will see why money asked for a product are worth it.

Point-of-sale materials and packaging. Flyers, brochures, stickers, flags, etc. support a value proposition and show different aspects of a product. High-quality packaging can tell about a product even more than a product itself, for instance, simple recipes on the packs of cereals or schemes of layers on the boxes with Teflon-coated frying pans.

Needless to say, this is not the entire list of value proposition carriers. It also includes case studies, portfolios, promo copywriting.

Alright, now we know how value propositions look like. But how can you create one? There is a number of templates, or formulas, for value proposition statements. You can easily find them on the web. I picked the most interesting ones below and composed own examples.

1. Geoff Moore’s template

  • For… (target customer)
  • who… (need)
  • our… (product)
  • is… (product category)
  • that… (benefit).

Canva app. For non-designers who create cards, posters, and presentations our web application is a free graphics editor with over 3500 templates.

2. Venture Hacks’ pitch

  • … (prominent example)
  • for … (new domain).

Dribbble. Twitter for designers.

3. Steve Blank’s XYZ

  • We help X (target users)
  • to do Y (need)
  • doing Z (method).

Inspect mode in Invision. We help front-end developers to check interface specification by clicking on a mockup in a browser.

5. Vlaskovits & Cooper’s CPS

  • Client: who?
  • Problem: what?
  • Solution: how?

Sketch app. Client: experience designers. Problem: a complicated process of assets production and passing design to development. Solution: a low-weight application with embedded export options.

6. David Cowan’s pitch craft

  • Problem scale
  • Product
  • Differentiation
  • Credibility

Framer app. Over 100 user testing sessions are conducted worldwide. Half of them fail because of prototype limitations. We offer a tool that enables designers to build realistic prototypes. This tool is used by Dropbox, Airbnb, Disney, and Netflix teams.

7. Eric Sink’s template

  • The most … (superlative)
  • … (label)
  • for … (qualifiers).

Behance. The most popular portfolio platform for designers.

8. Guy Kawasaki’s VAD

  • Verb
  • Application
  • Differentiator

Principle app. Make a high-fidelity clickable prototype from your Sketch mockups in just an hour.

Alexander Osterwalder’s canvas

However, the value proposition is more complex than it might seem. It’s defined by many business factors, which are hard to keep in mind all at once. Alexander Osterwalder, a Swiss business theorist, and researcher, developed the value proposition canvas. It can be described as a map of forces that influence the value proposition of a product or service and should be taken into account. The canvas consists of the product side, and the customer side.

A

This canvas is usually filled in during the initial — discovery — stage of a project. Design team organizes a workshop with stakeholders, and they figure out all the significant aspects of a value proposition through special exercises. Participants pin sticky notes to a large canvas sheet on a wall. Then they summarize their findings and convert handwriting into a fancy PDF, which can be used by the team in the future. Below are brief descriptions of each canvas cell meaning and the examples of what potentially would be put in those cells if such a workshop occurred in one of the global companies.

Product side

A

Customer side

A

Peter Thompson’s canvas adaptation

Alex Osterwalder developed a general canvas applicable to different areas, but in terms of the modern digital world, it might not be that easy to use. Peter Thomson, a New Zealand-based brand strategist, adapted Osterwalder’s canvas by usual digital vocabulary and adding more empathy to users. For example, he replaced “gain creators”, “pain relievers”, and “customer jobs” with “benefits”, “experience”, and “needs”. Let’s dive into Thomson’s canvas structure. It also has two sides — for the product and for the customer.

Product side

Features are available functions, options, and actions of a product. They often are represented visually in the product interface. You can find corresponding buttons, text boxes or icons.

E.g.: Sync across devices, autosave, minimalistic interface (Notion app).

Benefits are the results of using features, simply saying, user’s everyday tasks and challenges that become possible or easier owing to the product.

E.g.: Viewing the same stuff on all devices, easy to start using, editing by multiple users simultaneously (Notion app).

Experience is a metaphorical expression of what a product is for its users — the way they perceive it.

E.g.: Memory extension, digital workspace (Notion app).

A company, product, and ideal user are self-explanatory and stand for the basic parameters of what a value proposition is developed for. Ideal user is synonymous to the target audience.

E.g.: Company: Notion Labs. Product: cloud-based collaborative workspace. Ideal client: a representative of the digital or creative profession.

Customer side

Needs are rational triggers of buying. They are often connected with the user’s income, workplace, family, conditions of living.

E.g.: Free videos uploading, sharing videos via social networks (Youtube).

Wants are emotional reasons to choose a product that can contradict needs. A person might need a capacious minivan but wants a Formula 1 bolide.

E.g.: Popularity, becoming a video blogger (Youtube).

Fears are hidden risks of switching to a product. It’s what may make a user be reluctant to use this product and even switch to alternatives.

E.g.: As of July 2017, Vimeo has 8K 360 video support, whereas Youtube supports only 4K 360 videos (Youtube).

Substitutes are competitor’s products or workarounds people use if a proper product doesn’t exist yet.

E.g.: Vimeo, Facebook, Twitch (Youtube).

Value proposition usage

Selling design services

The value proposition is significant if you are selling your personal design expertise to an employer or if your design team tries to acquire a new client.

You can take one of the templates and compose a compelling resume summary or add a promo message at the beginning of your portfolio. Moreover, you can align the direction of the resume and portfolio with the value proposition of a company where you want to work or with the value proposition of a project you wish to be assigned to.

Design team positioning

A value proposition workshop is not only a method to get the necessary information for effective design, but also a nice way to show your skill of business thinking. Proposed to a customer, value proposition techniques help to build the common understanding of a product and show that you are a digital businessman, not just an artist.

Improving the client’s product

During everyday talks with a customer and project team, you deliver and explain various design solutions. Value proposition methods help to make this process simpler and avoid much resistance. If you remind of fears, needs, wants, experience, which your solution is based on at the beginning of the presentation, stakeholders are more likely to accept your proposal without bombarding you with questions. Moreover, a properly reasoned design solution is less likely to be revisited in the future.

Employee value proposition

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Recommended reading

This article gives high-level knowledge that can not make you a value proposition practitioner. I recommend the following materials for a better understanding of what is under the hood of great products and services.


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