By Jaryd Hermann, Founder and CEO of mywecast.com
As a founder or product manager, your product is your means of transferring value to users and customers.
Creating and distributing a product that fails to convey its value is as bad as creating a product that has none. And the effect of succinctly communicating true product value is reflected in the company's wealth -- which can subsequently be measured in revenue, users and other metrics such as market share and brand recognition.
I argue that the bedrock of creating a successful product and being able to market it is writing a concise, effective and persuasive statement that sums up the purpose and benefit of your product: the value proposition.
1. Research and understand your customer.
When you’re creating a brand new product or feature, you have a set of assumptions as to why it’s a good idea -- one of these, and certainly the most important, is that the target customer is experiencing a problem (pain point) and is in need of a solution.
This is what you think. Unfortunately, this isn’t workable data off of which to make actionable decisions. Product decisions need to be data-driven from quantitative and qualitative customer research.
This topic is an entire article in its own right, but in short, without doing research and understanding your customer, you will only be writing a value proposition for yourself and taking an unnecessary gamble that it applies to the intended customer, too.
2. Create a value matrix.
A value proposition is the tip of an iceberg. It’s what is visible at a glance to the team, stakeholders and, most importantly, your customers. It’s the summation of your research and insight.
I’ve too often seen “value propositions” pulled from thin air because they sound cool. To stick to my iceberg analogy, this is the equivalent of a small piece of ice bobbing around with zero substance.
As someone responsible for your product, it’s your responsibility to be able to justify that tip of the iceberg with a solid mountain of ice below. I’ve found that one of the most useful methods in helping articulate that iceberg to myself and everyone else is by using a value matrix -- a simple three-column matrix that I will explain further below.
3. Write out key pain points.
In the first column of your matrix, list what your customers care about -- the key pain points that you’ve identified your customers have. These will include some of your initial hypotheses, as well as new insights you’ve gained by speaking to users and from market, customer and competitor research.
Here’s an example of how to phrase a pain point: (X) is an important concern for (customer) when (Y), i.e., “Safety is an important concern for travelers when booking accommodation.”
4. List the product value for each.
Your list of pain points tells you what the customer cares about, and what your solution needs to solve to be valuable.
In the second column of your matrix, you address how your product will solve each of the pain points. This is where you highlight the value of each feature.
This step is also exceptionally useful in helping with feature triage, especially at the stage of creating an MVP. You will no doubt have myriad feature ideas that you’d love to have in the product. This step is a validation gate -- if a feature doesn’t directly solve a pain point, it doesn’t get priority.
Here’s an example of how to phrase a feature's value: (X feature) will be used to increase/decrease (Y problem), i.e., “Peer reviews will be used to increase travelers’ trust when booking accommodation with a stranger.”
5. Prioritize and craft one message.
The first question users asks themselves (for most of us, subconsciously) when seeing a product is, “Why should I care?” Using your product, even a free one, is an investment.
With your “what” and “how” arguments in place, you can write your value statement -- the sentence that communicates the “why” to your customer -- in the third column.
Not all pain points and product benefits need to be listed here. This is not the time to cram everything in and bombard prospects with information. Less is more. You’re communicating one key value to hook your customer's curiosity and make them want to discover more.
Avoid buzzwords and superlatives. Who cares if it’s “the best” if they have no clue what it is. Get across exactly what your product or service offers. Test it on friends and family. Ask them to tell you what they think the product does.
Your value proposition is usually the first thing a lead will see, and efficient communication will help make sure it’s not the last.
Jaryd Hermann. Learner, Optimist. Founder and CEO (mywecast.com). Writer at The Startup, The Data-Driven Investor, and theunlearnt.com