Design Value Propositions Like User Stories
Write Value Propositions That Capture the Whole Story Using the 3WH Method
To create value propositions that you can use through all stages of the value stream, I suggest writing them like user stories. Once you build your value propositions like user stories, you can include a ‘how’ statement for each to validate ‘how’ your product and development teams will deliver customer satisfaction for each value proposition that you construct. Methodical value propositions can also guide your marketing teams to what resonates with your target markets.
A “user story,” is a product development technique that originated from XP Programming and is now used in Agile, Lean Startup and SCRUM for software development. User stories as taught by most consultancies normally follow this template:
As a <role>, I want <goal/desire> so that <benefit>.
Product development teams complete this ‘role,’ ‘goal,’ and ‘benefit’ template to make clear who the end-user is, the desired objective, and at least the superficial benefit to be built. The ‘role’ is the ‘who,’ ‘goal’ is the ‘what’ and ‘benefit’ is the ‘why.’ As Wikipedia notes, some consider the ‘benefit’/’why’ of this traditional user story format to be optional. For value propositions, the ‘benefit’/’why’ is centrally important. Without understanding customers’ fundamental motivations, developers will not be able to conform their detailed product and/or services user stories to serving customers’ fundamental needs and deliver the satisfaction “user stories” are designed to produce!
Other developers on the other hand have reformulated user stories around the 5-W’s to provide even more specificity:
As <who> <when> <where>, I <what> because <why>.
This ‘who,’ ‘when,’ ‘where,’ ‘what,’ and ‘why’ methodology adds the ‘when’ and ‘where’ to the earlier formulation to provide more detail for the necessary product specification. I think this is two “W’s” too much for methodically creating value propositions that guide your entire company to success.
None of these formulations are optimal for value propositions because they neither:
(1) Differentiate well what are the end-user’s fundamental needs; nor
(2) Provide a clear place where product development teams will insert reasonably detailed product requirements to guide the technical development of new products and/or services and conform them with what customers most value and will actually buy.
To solve this commercial problem, I propose a <who>, <why>, <what> and <how> (a “3WH”) methodology for developing and writing value propositions as follows:
Like with user stories, 3WH empathizes with the customer, but instead of writing value propositions in the voice of the customer, you write them as you would actually communicate with your customer. The anatomy of this value proposition method prescribes that ‘who’ is the customer persona, ‘why’ is customers’ motivation, ‘what’ is the satisfaction customers will receive, and ‘how’ is the call to action for customers to receive such satisfaction from your products and/or services. Here “Who wants…” is a subjective ‘why’ question clarifying customers’ fundamental motive(s), while “You can…” is objectively ‘what’ your customers will actually satisfy themselves with by using your products and/or services.
Your customers’ subjective ‘why’ motive and objective ‘what’ satisfaction must be carefully distinguished since people want to better live in all ways, but consciously or unconsciously act only on specific desires they think will best enhance their interests within their own, necessarily limited circumstances. You ought to develop a realistic value proposition clarifying that pragmatic difference that can be iteratively tested, refined and perfected as you develop your products and/or servicse and go to market.
Note that the last part, “how: by…,” contains the technical function(s) or feature(s) your customers actually buy from your company. However, from your customers’ perspectives, ‘how’ simply solves for ‘who,’ ‘why,’ and ‘what’ (the three “WH” words). Money gets made at this inflection point within the “3WH” methodology, so I separate the three “WH” words from ‘how’ in the examples below.
I further believe this 3WH value proposition methodology is best because:
- First, this method explicitly puts ‘who’ and ‘why’ at the front of the analysis because that is most of what concerns your customers/clients/end-users. ‘Who’ describes your customers’ self-defined identity under the circumstances for which they need your products and/or services. You ought to start this statement with ‘because,’ because your customers’ motivation for buying your products and/or services results from these personas. The ‘why’ statement empathizes with the emotional pain or gain that your customers experience based on ‘who’ they personally consider themselves to be, which they would like removed by or received from purchasing your products and/or services. ‘How’ your company best satisfies ‘why’ your customers need some specific satisfaction is not your customers’ main concern, which many organizations forget.
- Second, this method clearly defines ‘what’ as the substance of that which satisfies ‘why’ your customers want to buy a product and/or service based on ‘who’ your customers consider themselves to be, without dictating your particular product or service methodology. You can see in this article, Four Steps to Lean Startups Using 3WH: Apply 3WH Value Propositions to Develop Your Lean Business, that the Lean Startup methodology fits within the ‘what’ stage of analysis, which can empirically discover ‘who’ the customers are and ‘why’ they buy a given product and/or service. Again, the details of ‘how’ your company provides ‘what’ your customers need is a matter of superior technical execution to be determined by Product and R&D in collaboration with the rest of the organization.
- Third, this method puts ‘how’ as the substance of the technical execution of ‘who,’ ‘why,’ and ‘what’ at the very end to validate ‘how’ your product and development teams are delivering on each value proposition that you construct. Putting ‘how’ at the end provides a placeholder for the more detailed user stories to be created by your Product and R&D teams in the voice of the customer without making those stories unwieldy since the fundamental motivations are contained in the value propositions you create. ‘When’ and ‘where’ of the earlier mentioned user story formulation are contained within ‘how’ of this 3WH value proposition method. You might even start analyzing ‘how much’ to charge your customers at this last stage of the value proposition in the context of competitive substitutes for ‘what’ satisfaction your customers want and can buy from others. Since you may choose not to include ‘how’ in your initial value propositions by leaving it as a placeholder, the 3WH value proposition methodology also provides your product and development team with the option to include ‘how’ in more and more detail with specific user stories of their own design as they create your product and/or service specifications completely aligned with ‘who’ your customers are, ‘why’ they want to buy, and ‘what’ best satisfies them.
- Fourth, designing value propositions as customer-focused user stories allows you to back test each measurement or assumption you made in designing your value propositions once you alpha test, beta test, iterate, and/or launch your product and/or service. If your products and/or services do not meet commercial expectations for any reason, you can isolate the problems as being caused by one or more of the 3WH factors. Once you gather your data from your win/loss analysis, you may ask whether you best identified ‘who’ your customers are, ‘why’ they were motivated to purchase, ‘what’ would have most satisfied them, and/or ‘how’ you ought to have produced, delivered and communicated the benefits of your products and/or services. Each of these anatomical parts of your 3WH value proposition feeds into and successively supports the next, clearly speaking to ‘how’ you ultimately achieve commercial success.
To make this abstract way of thinking more concrete, here is an example of a value proposition using this “3WH” methodology for a company that produces online travel booking systems:
Who: Because you are a high-level business executive with impeccable taste;
Why: Who wants the best services and made to feel pampered when you travel at a level appropriate for your position;
What: You can ask your assistant to book a first class flight;
How: By having him/her logging into and selecting these details with the company’s travel system that you can easily and affordably buy from us.
Importantly, this value proposition illustrates that while the travel system would ultimately serve high-end needs, the person actually using the system would want to get a job done as efficiently as possible through a company’s newly purchased technology in-line with company’s travel policy. Thus, if your company designed travel booking systems, you would design it to fit into the workflow for the assistant while conforming with the company’s policies, and not the executive’s day-to-day activities other than for making the initial request and receiving the results. This means you would most likely optimize your web over your mobile applications. However, you must make sure the reservation can be customized to fit the high-end tastes of the ultimate end-user, which is the company executive, so a mobile application or even just good email formatting through which the itinerary could be delivered would be highly valuable.
Now lets take this value stream one step further from the assistant’s perspective:
Who: Because you are an assistant to a demanding business executive;
Why: Who wants to quickly, accurately and precisely book travel plans as she/he asked so you can feel competent at your job, advance your career, and support your family;
What: You can book the specific travel details of type of flight, location and time of travel, and the executive’s food, seat and service preferences, and have those details provided to the executive in an organized way;
How: By logging into the company’s web-based travel portal with your work computer, inputting the data, applying preferences for the executive that you had previously saved in the system, and having the itinerary and details emailed to h/er as an easy to read, mobile optimized HTML template.
This second value proposition for the travel portal gets further into the technical specifications that your Product and R&D department would further define with their own user stories. This value proposition also includes critical information as to how the system ultimately needs to serve the executive who is not technically the end-user. These details are provided by the SCRUM team and stakeholders to discuss and confirm with customers as you develop them.
Let’s now apply the 3WH value proposition methodology to a more traditional software development example. Such example might normally be written as:
- As a power user, I can specify files or folders to backup based on file size, date created and date modified.
Reformulate this value proposition with 3WH methodology as follows:
Who: Because you are a power user;
Why: Who wants to feel like his/her files are safely retained;
What: You can specify files or folders to back up based on file size, date created and date modified;
How: By logging into our document management system, navigating to the backup console and adjusting the file size, date created and date modified settings.
The above structure should be fairly self explanatory by now, but let’s add one more off-hand example of a value proposition starting with an urban pet owner for a different perspective:
Who: Because you are an urban, value conscious pet-owner who doesn’t own a car;
Why: Who wants to feel like you are feeding your pet well, but not as well as a human;
What: You can conveniently acquire a mid-priced pet food;
How: By going online to our website and selecting the food that is priced between the least and most expensive and has the best reviews.
This last value proposition could be used by either the producer of the pet food, or an online pet food vendor. The producer of pet food for this target market must design the food that provides a profit and avoids any major scandals in regards to its ingredients, but needs not be organic if that adds to the cost. The online vendor must provide an efficient means to sort and filter by price, ingredients and rating. All this can be further built into the final ‘how’ requirements if you choose, and even allows for “non-technical requirements” like food safety if desired.
The placement and promotion of the pet food must also be conducive for the demographic of online pet food shoppers as well for either the producer or vendor, and this 3WH value proposition methodology would allow your marketing team to easily discern this need just by reading this user story. 3WH if used properly ought to better align Sales, Marketing, Product and R&D to improve your go-to-market efforts to make the most money for your company.
Of course, for any actual marketing language you draft, you may reshape this 3WH result however works best for the format and the audience. However, I hope you see how this 3WH value proposition methodology may help structure and clarify the true value, emotion and call to action that you must somehow convey in your external messaging for your target demographics. I hope you agree that this reformulation of technical value propositions as user stories makes the intersection of the customers’ ultimate motivation and the developer’s basic product specification much clearer than it would have otherwise been. These value propositions get down to the essentials of ‘who’ a product and/or service is being built for, ‘why’ such product will be used, ‘what’ actually satisfies the customer, and ‘how’ your company will deliver the most customer satisfaction and profit in return. These value propositions may even inspire and guide the user stories your product and development teams will write in more granular detail.
Thank you for reading!