Most of us work in crowded markets where customers can choose from many different options.
How do you make them aware of your product? How do you get them to see the value of what you offer? And ultimately, how do you get them to buy your product rather than a competitors’?
What are your options? A few common ones people do are to:
- Describe what your product does on your website
- Then spend a ton of money on Google ads to drive traffic to your website
- And, if you have sales teams incentivize them (with money) to push your product when talking to customers.
These are all options that will help raise awareness. But, should this be your focus? Or should you be spending time on developing a product proposition?
One way of summarizing a product proposition is in what’s called an elevator pitch.
Imagine you were trapped in an elevator with a potential customer for 30 seconds – what would you say to them to try and sell your product? Here is an example of an elevator pitch for Product Focus.
It loosely follows the format below:
- For <target persona or segment> who <statement of need, opportunity or problem> our <product name> offers <product description>. This means that <statement of benefit>
- (Optional statement about competition) Unlike <primary competitor or generic solution> our <product> <statement of primary differentiator> because of our <proof points that benefit will be delivered>
We’ll explain some of these terms in the rest of this article. As another example:
- For people with multiple credit card balances who want to consolidate and reduce their monthly payments, our balance transfer service offers 0% interest on all balance transfers for 12 months with no transfer fee. This means that all your monthly payments are combined into one reduced amount to save you money and hassle.
- Unlike our competitors, our balance transfer service is the best on the market because it’s free, we provide award-winning customer care, and all our funds are ethically sourced.
You need a product proposition
Unless you’re clear about who you’re targeting, then it’s easy to waste a lot of time and money chasing people who are never going to buy.
And, if you can’t quickly explain why they should be interested in your product and how it will help them achieve some success then that’s where the contact will end – they’ll bounce off your web page, or they’ll tell the salesperson to leave. What you need is a clear product proposition.
To put it together you’ll need to know answers to these core questions
- Who is your product for?
- What problems/needs/aspirations do they have that your product will help them with?
- Why is your product better than the alternatives they might consider?
- What evidence do you have to substantiate your claim?
Proposition development process
This article contains ideas, tools, and approaches to help you develop a product proposition.
You will see that to be successful, you need to understand your customers, competitors and the market. It’s not always easy to get these insights so usually you’re doing the best job you can with the information you have. Our articles on MVPs and listening posts can help.
Know your target segment
When it comes to thinking about your customers and their problems, you’ll want to focus on a small group of customers with similar issues – your target market segment. This means identifying a group who have similar things they’re trying to achieve, similar challenges, needs, roles, and behaviors. It then makes it easier to target your effort on creating a product that works well for them and to communicate to them as a group.
Your offer to them, your proposition, will answer their question “Why should I buy from you?”
This is sometimes known as segment, target, and position.
Ensure your message is relevant
For complex products, particularly when selling to businesses, there may be many different people involved in a decision to buy. It’s important that you have distinct proposition messages for each of these different audiences, so you always keep a focus on what matters to that particular individual. Some will be interested in price, terms and conditions, others in how they’ll use the product, others in its performance or functionality.
Personas are a really powerful tool to help you think this through.
Personas are a well-described example of each type of user or buyer for your product. When developing propositions, we’re interested in the different people involved in buying the product i.e. buyer personas.
When selling to a business, typical personas include the technology buyer, end-user buyer, and economic buyer.
The technology buyer wants to know about the features and technical details but also how to implement, support and operate the product. The end-user buyer cares about what the product will do for them and how it will make their life better – and how easy it is to learn and use the product. Finally, there is the economic buyer who cares about the business benefits and how the product is going to make the business more money, save costs, improve the brand or reduce risk.
As a B2B example, if you were selling a SaaS finance system to a company, the finance team would be the end-users who care about what the system could do to help them work more effectively. The technology buyer would be the IT Manager who has to support the solution and cares about how powerful laptops need to be and the browser versions supported. Finally, the economic buyer could be the Chief Operating Officer who wants to save money by having a more efficient finance team but also reduce risk and costs from any potential financial errors.
When selling to consumers, the user is usually the buyer – but not always. A parent buying a bicycle for their child cares about value for money and safety, whereas the child only cares about how cool the bike looks or the number of gears.
Propositions aren’t just a bunch of features
As you’re thinking things through, bear in mind that your proposition is not just a bunch of features, it’s an experience for your customer that potentially encompasses many different elements. Take a look at this image from our training – any of these elements might be what differentiates your proposition in the market or what makes it really valuable to your customers – features are just one of the 13 items on the slide.
We can’t be best at everything
Sometimes, your work on propositions can be a disappointing reality check – what you offer isn’t good enough for your target customers. Perhaps your customer experience is poor, it takes too long to deploy, or the support response times aren’t quick enough for a product that is critical for your customers.
Or more likely you’re good at some things and not so good at others. And, even though you’ve got the problems above your price is low, so some customers still buy.
Thinking things through is an important and useful exercise. When you know what’s important to customers, you can put plans in place to move from today’s situation to a more compelling future.
The Customer Value Exercise
The Customer Value Exercise is a quick and concise way to summarize your proposition to a market segment on a one-page template. Start by adding the name of your proposition and your target market segment, then complete the information for each attribute about whether customers think it is important when buying. Then show how you compare against the nearest competitors.
Completing this exercise often reveals how much you don’t know about what your customers value!
Get in touch if you’d like a copy of the template by emailing [email protected].
Product vs proposition
It’s easy to confuse the two terms and sometimes they are used synonymously. A product is something sold to customers – a proposition describes what it is and why they should buy it.
The same product may be sold into different market segments, but with different propositions, for example, an off-road vehicle may be sold to farmers as a tough vehicle that can be used on farm tracks and in fields. The same vehicle may be sold to people in the city as a cool, safe, prestige vehicle.
Also, propositions aren’t just for external audiences.
Without a clear proposition, you shouldn’t even be allowed to start building your product. Often the first thing you need to do is to sell your idea within your business. You need to explain to the leadership team why they should approve the resources to build prototypes, to do market research or to build the product.
Having a clear proposition for the product in the earliest stages of product discovery and innovation helps you get engagement within your organization.
There are many tools to help structure your thinking (our Propositions Journal is packed with ideas – register here if you don’t have a copy). A good start point is to use a canvas, such as Ash Maurya’s Lean Canvas.
The image below gives a high-level view of the content of Ash’s Lean Canvas.
Here is an example of time tracking software.
So what is a product proposition?
A product proposition is a description of your offering to a group of target customers (a market segment) who have a particular market problem. It should focus on the customer benefits and answer the question “Why should I buy from you?”
Ideally, product propositions should …
- describe the market problem
- highlight attributes that are relevant to and valued by our target customers
- have unique attributes that we can maintain over time against the competition
- include some quantification of the value customers will get
Regardless of which approach you choose, proposition development will force you to think about who you’ll be selling to, what problem you’ll be solving and why you think you’ll be better than alternative solutions.
Thinking propositions through and testing them with internal experts and potential customers is a great place to start. Done well, they can make the difference between failure and maximizing your products’ potential.
Proposition development is an integral part of product management.
Read our article on Propositions Development from our Propositions Journal here.