According to Shopify, a value proposition is the value you promise to deliver to your customers post-purchase. It’s ultimately what makes your product attractive to customers.
Uber – The smartest way to get around.
Lyft – Rides in minutes.
Target – Expect more, pay less.
Walmart – Save money. Live better.
You can see how the value propositions of competing products play a huge part in positioning. For example, I would expect Lyft rides to be faster than Uber’s. I would also expect Uber’s experience to be more optimized since they claim to be the smartest mode of transportation.
I expect to pay a bit more at Target than at Walmart, but that the slightly higher price points are justified by better quality.
The beauty of value propositions is not just to be customer-facing. They also power decision-making within the company. If I’m working at Target as a shoppers’ assistant, then I wouldn’t claim that we have the lowest prices. Instead, I would bring to the shopper’s attention the value that they would get out of buying their items at Target.
Until validated, however, value propositions are merely hypotheses. They’re assumptions about what people value.
How, then, should we go about validating our value propositions so that we take them from being assumptions to being facts?
Quick answer: we run experiments.
Elaborate answer: read on.
Tre is a living room table with removable trays that adapts to the way you chill. It’s designed by a living room multitasker, for fellow multitaskers. If you eat while binge-watching Netflix, double screen live games, or always find yourself typing away on your laptop while a re-run of Friends plays in the background, then this table just might be for you.
For the past year, I’ve been slowly but steadily developing this living room table. Pinning down its value proposition was (and still is!) one of my highest priorities – and I wanted to do it the right way.
My value proposition, which is a hypothesis at this point, lies within the removable trays. Each table comes with two trays: a big tray and a smaller tray. How you chill in your living room dictates how you’ll be using the trays. For example, if you were eating takeout while watching Netflix on your iPad, then you’d use the big tray for food, the slot in the back to prop up your iPad, and the small tray to keep your phone close by.
In order for me to validate this value proposition, I’d have to run an experiment. Are people multitasking in their living rooms? Does this arrangement of removable trays work around people’s habits and behaviors? Does it actually help people multitask better?
Notice something remarkable: there is no mention of the table’s base. How does the table stand up? Also notice that there is no mention of materials. Are the trays made of Grade A aluminum or lacquered wood?
The reason there is no mention of these aspects of Tre is because they aren’t part of the value proposition. It’s not that they aren’t important, they’re just not part of what differentiates Tre from other living room tables.
Since I know what Tre’s value proposition is, I can simply test for that exclusively. My initial prototypes were simply hacked Ikea side tables. I was testing for the interchangeability of trays. Did I care for materials? Nope. How the table stood up? Nope.
What this means is that we need to stop testing ideas and instead test our value propositions hypotheses and disregard everything else. I continuously see teams wanting to prototype their products. Why? Are you worried you can’t engineer your product? If you aren’t, then there is absolutely no reason to prototype your full product.
There’s this fear of people stealing our ideas. And while ideas are a dime a dozen, you actually don’t have to reveal your product to start testing its value proposition!
Figure out what your value proposition is. Frame it as a hypothesis. Test that.