A value proposition framework for product managers
As a product manager, you’ll definitely have plenty of stakeholders to manage and communicate with – business stakeholders, technology teams and, crucially, customers. To ensure that you are able to get support from all your internal and external stakeholders, communicating in a simple and effective way about what you are looking to achieve is key. In order to keep all these people happy and involved, one of the first things you need to get clear about is your value proposition.
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This template is part of our VFQ Product Management online course. On this course, you’ll take a structured process to navigate through the complexity of starting from an idea and transforming it into a value proposition and product that users love.
What is a value proposition?
Simply put, a value proposition is a communication of the benefits that your product or service can bring to the customer and the organization. There are many different ways of capturing this information. A good value proposition has considered the following elements:
Need – this describes the underlying customer/user need or problem that you’re looking to meet or solve. This is perhaps the most important part of your value proposition. You’ll have heard the people say that we’re looking for “problem-solution fit”… identifying the problem is the first step. To validate the need, you’ll have to do customer research.
Approach – here you’ll explain how you intend to solve the problem for the customer/user. The solution part of problem-solution fit. Experiments, MVPs, testing and prototyping will all become useful when figuring out the shape of your solution.
Benefits – what benefits can your customers/users expect? Why are these benefits so compelling? This is all about the value your idea has in the life of those that will experience it. In this respect, the most fundamental question is what will it cost to develop the solution and what benefits (monetary or otherwise) will it bring. Remember at this stage your business stakeholders are looking at investment opportunities, not just interesting ideas.
Competition – simply put, how are you different to the rest? What sets you apart from them? Competition means you need to differentiate. On top of this, we would encourage you to think about the alternative ways in which customers/users are meeting a need with alternative solutions today – these may not just be your direct competition. Below is a high-level outline of the value proposition for Airbnb.
How will being clear about my value proposition help me?
By having these four elements clear and captured concretely, you’ll be able to better communicate with all your stakeholders. In short, you’ll be able to sell your idea to them, as a customer, a development team or a business stakeholder. Although it’s may appear a simple format (and if you’ve been doing your job right, you’ll find it relatively easy to complete), it’s powerful in focusing you in on the things that matter most to your stakeholders. It also keeps things at a sufficiently high level such that even if one of your stakeholders is purely interested in the business benefits, you’ve got that covered. But you’re also able to share a more holistic view of your idea.
What next? Validate the need.
As with most things in the world of ideas, some of the things you record on your value proposition will be entirely based on assumptions. How do you know that X is the need? It’s up to you to make sure that the need really exists, that the approach will work, that the benefits are real and that you can compete with the competition. This is the most fundamental aspect of your value proposition. Understanding the need and making sure that it exists. Uncovering a customer or user need requires you to do some research and gather some insights.