A quick introduction to basic business concepts aimed at engineers and all who wish a simple and quick explanation. Part 4 in the series is covering the concept of a value proposition.

1. BUSINESS FOR ENGINEERS:
VALUE PROPOSITION
Jan Isakovic!
@iYan

2. VALUE PROPOSITION BASICS
• So what is a value proposition?!
• Why do we need a value proposition?

3. VALUE PROPOSITION
Definition: 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

4. VALUE PROPOSITION OF
OTHERS
• Why did you buy your mobile phone?!
• Why did you buy your car?

5. 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

6. CUSTOMER PROFILE
Customer 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

7. VALUE PROPOSITION
Products & 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..

8. EXAMPLE: NETWORK SUPPORT
Customer 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

9. 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

10. EXAMPLE
“The low fares airline” “World's 5-star airline”
Perfect positioning!

11. A LOCAL EXAMPLE
• “We are good because we are old”?!
• Typical lack of differentiating vision
Source

12. What about your company?

13. 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..

14. BUSINESS FOR ENGINEERS
1: Customers and sales 4: Value proposition
2: Product conception 5: Core competencies
3: Minimum Viable Product 6: Company values
Jan Isakovic!
@iYan