BUSINESS FOR ENGINEERS: VALUE PROPOSITION

Jan Isakovic!@iYan

VALUE PROPOSITION BASICS

• So what is a value proposition?!

• Why do we need a value proposition?

VALUE PROPOSITIONDefinition: A statement that describes what your company,

product or service will bring to your clients

• “Our solution X will help you work better and faster”!

• .. how does that help us develop the product and optimize the sales pitch? Everybody says that.!

• An old adage states that there are only three basic value propositions: save money, save time, waste money/time!

• To define it, a better insight into our customers and product is needed

VALUE PROPOSITION OF OTHERS

• Why did you buy your mobile phone?!

• Why did you buy your car?

VALUE PROPOSITION ELEMENTS

• We’ll use the “Value proposition designer” to define the elements!

• (note: Business Model Canvas is also recommended reading)

Source - concept and pictures

CUSTOMER PROFILECustomer jobs

• the tasks they are trying to perform and complete; the problems they are trying to solve; the needs they are trying to satisfy!

Customer pains

• negative emotions, undesired costs and situations, and risks that your customer experiences or could experience before, during, and after getting the job done!

Customer gains

• the benefits your customer expects, desires or would be surprised by; includes functional utility, social gains, positive emotions, and cost savings

VALUE PROPOSITIONProducts & services

• Which products and services do we offer that help our customer get either a functional, social, or emotional job done, or help him/her satisfy basic needs?!

Pain relievers

• How do our products and services alleviate customer pains?!

• Eliminate or reduce negative emotions, undesired costs and situations, and risks!

Gain creators

• How do we create benefits our customer expects?!

• Functional utility, social gains, positive emotions, cost savings..

EXAMPLE: NETWORK SUPPORTCustomer jobs

• Safeguard from network failure (functional)!

• Can be smug in front of the boss (social)!

• Feels good about network state (emotional)!

Customer pains (if they did it themselves)

• Cost of required backup equipment!

• Required internal resources!

• Incomplete knowledge of network!

• Loss of face!

Customer gains

• Quicker response time!

• Measure of success: uptime, cost!

• More likely to adopt if: cheaper, faster resolution ..

Products and services

• Monitor equipment and repair/replace if necessary according to SLA!

• Maintain a perfect record!

• Timely communication of failures!

Pain relievers

• Shared reserve equipment lowers cost for single customer!

• Minimal internal resources required!

• Lead engineers have an in-depth knowledge of customer network!

• Take the blame!

Customer gains

• Non-stop monitoring and preparedness!

• Ensure higher uptime and lower support cost!

• Try and lower costs and SLAs

WHAT ABOUT THE COMPETITION?

• Our product/service is in competition with others for the same “slot”!

• iPhone/Samsung Galaxy/Nokia Lumia!

• What are the crucial distinguishing elements of our value proposition? Why should the customer choose us?!

• That difference is the basis for your value proposition

EXAMPLE

“World's 5-star airline”“The low fares airline”

Perfect positioning!

A LOCAL EXAMPLE

• “We are good because we are old”?!

• Typical lack of differentiating vision

Source

What about your company?

FIND THE VALUE PROPOSITIONS

Your service Value proposition Main competitor Their value proposition

Some possible value propositions: cheaper, higher quality, longer warranty, changeability, scalability, ecosystem, safety, design, user experience..

BUSINESS FOR ENGINEERS

Jan Isakovic!@iYan

1: Customers and sales 4: Value proposition

2: Product conception 5: Core competencies

3: Minimum Viable Product 6: Company values