What is A Value Proposition?
A value proposition is a set of promises you make to a market. It defines how you want to create value with an offering. Some promises matter and some don’t. You must know the difference between the two to be successful. Winning value propositions converge on one main promise. You have to focus your attention on the promises that matter the most. To focus you must have an approach that lets you see, share, and do what matters right now.
What Is An Offering?
An offering is an intersection of two things. First of all, there’s a solution that you choose to sell. Nothing matters more than the products or services that you choose to sell. Maybe you sell a combination of both. The dynamics are the same. You sell a solution to a problem. Second, you must select a market you think you can win. You can’t win unless you choose the right market. Your value proposition must match the market you choose.
A market is the intersection of two things. First of all, you must select a customer. Decide who you think wants or needs your solution the most right now. The point is to make their lives better. Second, there’s the main competition that you must face to sell your solution right now. Nobody has to buy what you choose to sell. You must be much better than the main alternatives. There’s no room for error. It’s survival of the fittest. You must focus.
A customer is the intersection of two things. First of all, there’s a group of people you think wants or needs to buy what you sell. They make up a population. This group has a shared view of your solution. They talk to each other. Second, to define your customer means to select a region where the group of people you want to sell to live. A region may include more than one geographic location. How you sell must be the same for each location.
There must be a trifecta. The way people perceive your solution must be the same across a region. The choices people make must be the same across a region. The way you win must be the same across a region. Focus on selecting the customer who matters most.
Nothing matters more than your offering. It’s the way that you create value and succeed. You must seek to have the best possible solution for the market that you choose to serve.
Promise Fundamentals:
To create value and succeed your offering needs to meet two key requirements. First, a customer needs to experience it. Second, your offering must keep promises that matter.
A promise is a specific commitment to the way your offering will and won’t create value.
A promise has three parts. First, there is its direction. Second, its path. Third, its type.
The first part of a promise is its direction. This is the purpose of an offering’s promise. Each promise has two possible directions. It is either maximizing or it is minimizing.
A maximizing promise is focused on making life better. This means that the promise your offering makes is kept by maximizing your customer’s experience with the offering.
A minimizing promise is focused on making life easier. This means that the promise your offering makes is kept by minimizing the customer’s barriers to experiencing the offering.
A maximizing promise has two possible paths:
- Flexibility is the customization that the customer gets.
- Quality is the functionality that the customer gets.
A minimizing promise has two possible paths:
- Price is the cost a customer pays to get the offering.
- Delivery is the time a customer waits to get the offering.
The third part of a promise is its type. There are two possible types of promises:
- Objective refers to a promise you can measure directly.
- Subjective refers to a promise you can’t measure directly.
Each promise that an offering makes always has three key parts. A promise has two possible directions. Each direction has two possible paths. Each path has two possible types. This means that each offering has eight possible promise options.
Conclusion:
Every offering makes promises. Some of these promises matter and some of them don’t. To win you must prioritize the promises that matter and ignore the ones that don’t.
