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Business for engineers part 4: Value proposition

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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.

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Business for engineers part 4: Value proposition

  1. 1. BUSINESS FOR ENGINEERS: VALUE PROPOSITION Jan Isakovic! @iYan
  2. 2. VALUE PROPOSITION BASICS • So what is a value proposition?! • Why do we need a value proposition?
  3. 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. 4. VALUE PROPOSITION OF OTHERS • Why did you buy your mobile phone?! • Why did you buy your car?
  5. 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. 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. 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. 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. 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. 10. EXAMPLE “The low fares airline” “World's 5-star airline” Perfect positioning!
  11. 11. A LOCAL EXAMPLE • “We are good because we are old”?! • Typical lack of differentiating vision Source
  12. 12. What about your company?
  13. 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. 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

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