1-Sentence-Summary: Value Proposition Design opens up a new perspective of what added value in a product consists of, how to find and target your market correctly, how you can design a product successfully, bring it forth to your prospects and have them be excited to buy it, all through the creation of a customer-centric business
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Favorite quote from the author:
The central aspect of any business is the product or service that it sells. Without it, there’s no operational flow, no margins, and no business whatsoever. So when opening up a company, or expanding and creating new products, you ought to ask yourself a series of questions. You will also need to go through many strategic steps to ensure the success of your endeavor.
The central question is “How do I create something that provides value for my customers?”. Centering your business around the clients is one of the most powerful tactics a company can adopt, a fact that’s proven by leaders worldwide, such as Apple or Amazon. Buying from these corporations is an easy process that finishes up successfully almost every time.
But when something occurs, such as the courier misplacing your order, they always provide outstanding support. In today’s competitive world, understanding the importance of building a customer-friendly business has never been a more actual subject. For this reason, Value Proposition Design by Alexander Osterwalder has got all the right tactics and concepts you need to learn.
Here are my three favorite lessons from the book:
- To create a valuable product, you must first empathize with your customer.
- The components of your product are responsible for the added value it brings forth.
- A good way to enter a market is by analyzing it beforehand and then presenting a prototype first.
To fully understand these lessons, we must go through each one, read between the lines carefully, absorb the information, and explore practical ways of implementing it. Let’s start with the first one!
Lesson 1: Empathize with your customers and learn about them, so as to create the best product that you can
In designing a successful product or service, you must first put yourself in the shoes of your customer. Try to figure out a way to solve their daily problems in the most convenient way. Essentially, people have two types of jobs: functional and social jobs. Functional jobs can be buying groceries, whereas a social job is something a person does to impress others.
For a functional job, a person needs reliable items to solve their issues rapidly and conveniently. For a social job, such as creating a trendy, cool outfit, a person needs a different set of products and services. As such, the next step is identifying the customer’s pains, or where they struggle to find solutions for their problems. The first type of customer pain is an unwanted outcome.
When you don’t get what you expected, it can be pretty frustrating, right? Maybe you bought something that you thought would fix your problem, but it didn’t. The second problem implies obstacles faced in the way that prevent you from doing a job. The last customer pain is risk, which happens when a job is not performed. Address these types of customer pains with gains, which are the things a customer hopes to get.
Lesson 2: Determine the value proposition of your product by designing its components
Now you know which are the main customer pains that you can address. It’s time to get to the main part: designing and crafting a product or service to address it. A good product has both a tangible and an intangible part. The tangible part is, obviously, the product itself, whereas the intangible one can be a warranty.
More recently, products come with a digital component as well, such as an app linked to them which improves their functionality. Now that you have these three components in mind, it’s time to think of ways to alleviate your prospect’s pain points with your product. Which component will come in as a solution to their problem, while all others just keep on adding extra value?
You can try to identify exact situations where your product will come in handy. This way, you might also figure out how things can go wrong or where you should improve your product. Think of ways to exceed your customer’s expectations. You also need to assure your support in every step of the process, and even post-purchase.
Lesson 3: Study the market before you enter it with a prototype
You now have an idea of your product value proposition and how it can alleviate your customer’s pain points. You can then start studying the market to materialize your idea. Doing so before you actually create it can help you find flaws in your concept or help you find more valuable features to add to it.
As such, you can start studying your market by going online and looking for articles, news and even Google Analytics tools to help you gain insights. Another way is to empathize with your prospects and put yourself in their shoes for a day, studying what problems they face in their daily activities, from brushing their teeth, to preparing breakfast and getting dressed up for work.
If you’ve managed to come up with some significant insights and create an idea about your customer base, it’s time to build a prototype that you can present to all your family and friends for review. A prototype allows for initial flaws in design to be fixed, such as pain points that haven’t been addressed or things that are poorly constructed in your product.
Getting people to interact with your product is an essential step that allows people to validate or reject your product in its initial phase. Don’t spend too much time building your prototype, as the point of it is to test your idea and see where it needs adjustments, so it doesn’t have any monetization purposes yet.
The Value Proposition Design Review
Value Proposition Design is a hands-on guide that teaches you how to build a successful product from A to Z, from the idea to the prototype. This book addresses multiple perspectives, such as customer centricity, the importance of added value, how to address pain points when it comes to your prospects, and many more! If you’re looking to materialize a concept, create a product that will sell, and find ways of becoming successful in your business, this is the book for you.
Who would I recommend the Value Proposition Design summary to?
The 25-year-old who wants to open up a business and doesn’t know where to start, the 37-year-old business owner who’s looking for ways to improve their organization and grow it, or the 42-year-old project management leader who wants to approach a successful direction for their current endeavor.
Last Updated on May 19, 2023