Value Proposition – Should it be Problem focused or Result focused?

By Subraya Mallya - August 2014 | Topics - Product Management

Bringing a product to the market is difficult. Convincing others to buy the product or use the product is even more.Result based Value Proposition It is critical that the positioning of the product and messaging the value it delivers is done right. The Value Proposition of a product or service has a major impact on the success of the product in the marketplace.

Note: Product here is a proxy to a product or service or a hybrid solution.

It all starts with a problem. A problem that is faced by the creators of the product in personal life or in a business situation. It could be a problem that has long been not solved or a problem created by an event. Then the creators of the product will seek out others to see how prevalent and widespread the problem is. After establishing the need and expectations of the product, the creators embark upon the journey of creating a product that completely or partially solves the problem.

Now that the product is created, how does one market and sell it? How do you convince people/companies to make a decision to buy your product? Needless to say, the product needs to have demonstrable, quantifiable value. But how do you message it?

I have been working with a few startups and helping them refine their value proposition and product strategy. The question came up about Value Proposition as to how should a company articulate it. Some companies choose to highlight the problem and the degree of pain it causes to create a sense of need. Some choose to go with the value delivered by the product. Which is the correct way? Is one better than the other?

It is the classic Cause-and-Effect thing. Highlighting the problem establishes the resonance and helps you identify the target market of potential buyers and maybe, even the person who signs the check. But then again, many of them might be just fine with the existence of the problem. They might not have the appetite, budget or inclination to fix it. It is a negative thought process. Companies usually find workarounds for problems and not always try to eradicate a problem. But highlighting the incremental value your solution delivers, the discussion changes. It goes from a negative to positive.

Let us take a couple of examples in non-software/non-technology world.

  • A fitness center never says “We will help you find how unfit you are” but rather their message focuses on “we will help you get fitter or healthier and then all the great things you could do when fit”. Even though the message is targeted at the same audience, reiterating the problem does not motivate the buyer into buying. An unfit person might not be motivated to going a gym. But getting them to think about all the things they could do gets them thinking.
  • A doctor would never say “let me help find what is wrong with you” when they try to get you to take a physical. Instead they say – “let us find ways to get you improve your health”. Diagnosis is just the cause and not the effect.

I see that lots of companies in the performance improvement, security, big data, governance space tend to focus on creating a fear about something going wrong rather than painting the picture of what is possible and the gains to be had as a result of using their product. Highlighting the issues always creates a push-back or resistance in people. Not to mention the reminder of switching costs involved in replacing an existing technology, if that were the case. That is human tendency. More so in companies that are big and have a lot of inertia.

Highlighting the positive impact of the value delivered would encourage companies and individuals to think beyond what could go/is wrong and consider all the incremental possibilities that could materialize.

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