May 12

How To Design A Value Proposition Like Apple and AirBnB

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Awad Makkawi

Founders see the value in what they produce as clear as daylight.

But a value proposition design that's intentionally compelling and easily understood by investors and customers is a lot trickier.

We ask ourselves over and over "how can I present my product in a way that would convince people the same way I'm convinced?"

And we think of catchy value proposition  examples like this:

Airbnb value proposition design

Or this:

Apple value proposition design

And this:

Quickbooks Value proposition design

Because deep down

We know that we absolutely can have a value proposition design that's just as catchy but we just can't put our finger on it.

That's because most founders use a DIY approach and don't follow a proven process.

Which is what we'll cover in this article.

Let's go!

Value Is Not What Most People Think

Let's start with what value is not? 

It's not your slogan or your positioning statement.

Nike - Just do it

McDonalds - I'm Lovin' it

These are slogans and say nothing about value.

Creating value means the product you're offering to the customer would otherwise cost more than the fair value being exchanged. 

For example:

Cafu value proposition design

If a customer wants to fill petrol in her car, what options does she have?

She will have to drive to gas station, possibly wait in a queue, wait for the gas to be filled, pay and then continue on her journey. 

Cafu's model creates value by saving her time, money and providing convenience.

Here's another example, Property Finder.

Property Finder value proposition design

What option do customers have when searching for their next home?

They have to physically visit a bunch of houses without knowing what they look like, the neighborhood, the cost or a bunch of other filtering criteria.

But when you "house hunt from home" 

The value is clear for customers.

Save time in visiting houses you'd never consider, save effort, money and find the right home faster.

What Value To Create?

People buy, use or consume products and services when they believe that doing so will serve their needs and create value.

That's why in his book The Value Mix, Guerric de Ternay, explains that value is the result of 2 things coming together:

  1. A need or want for your target audience
  2. An offering to that market to address their needs or wants

This second part is what your value proposition design is about.

In other words:

It is your explanation of how you "propose" that your product or service can solve customer needs. Your promise to deliver a result.

Hence why we say:

"The one who understands the customers needs best, wins"

This value created can be quantitative or qualitative and can come in different forms for customers:

  • Newness
  • Exclusivity
  • Performance
  • Cost savings
  • Efficiency (time saved)
  • Customization
  • Getting the job done
  • Brand/Status
  • Price
  • Design
  • Convenience
  • Risk reduction

But crafting a truly effective value proposition, means aligning it with the business model.

How Does Your Value Proposition Align With Your Business Model?

"Why should I buy from you?"

This is the question going through customers minds that a good value proposition will answer. 

In the book Kotler on Marketing, Kotler explains that customers think in a certain way:

WIIFM also known as "What's In It For Me"

Or "What do I get for paying that amount?"

Meaning that when they come across a value proposition, they are likely to think about it in one of the following ways financially. Am I paying:

  • More for more
  • More for the same
  • Less for more
  • Less for much less
  • The same for less
  • More for less

This is one side of the table - the customers side.

But there is another.

A business creates value for its shareholders and owners too.

Which is why the best value propositions are designed to fit with the business model.

When designing a business model there are 3 core factors to consider around value.

How value will be:

  • Created
  • Delivered 
  • Captured

If any one of the above is missing, the business will not be viable.

IDEO one of the worlds most recognized brands for business design thinking helped present this concept.

Ideo business design

After identifying a need and creating value for customers through a product/service that solves that need, the business must then deliver that value in a way that aligns with the proposition.

For example:

Take a look at Pandora's value proposition.

Pandora value proposition design

Listen anytime, anywhere.

This means that Pandora has to be able to deliver their value everywhere: 

Desktop, tablet, mobile, iOS, Android, Amazon, online, offline etc. 

And in each of these delivery channels it must be able to capture a portion of the value it is creating for customers.

If Pandora didn't work offline and didn't capture value offline then the proposition would not be aligned with the business model.

Here's Why Your Value proposition Can Make or Break Your Business

You've heard that site visitors spend a few seconds on your landing page before making a decision to stay or move on right?

Or how about the goldfish memory one about reduced attention spans on social media?

Well there is a way to counter this lack of interest. 

It's with a value proposition that taps into customers biggest pains to get their attention.

And get it fast.

In fact, InvespCRO is able to increase website conversions by up to 90% through improving and testing value propositions that resonate with customers. 

Value proposition design and website conversions

And that's not all.

Conversion wizard Peep Laja from CXL says this about the importance of your value proposition to your business:

Value proposition design and conversions

There is no shortage of positives for designing a compelling value proposition:

  • Attract more customers, partners, suppliers and employees
  • Convert more customers
  • Increased customer engagement and loyalty
  • Higher sales
  • Outperform competitors
  • Improved ROI on marketing messages
  • More authority and brand power
  • Enhanced market positioning
  • Command higher price points and margins due to differentiation
  • Catalyst for customer focused innovation

Now that we're clear on what value is, its different forms and why a value proposition is so important, it's time to address the elephant in the room.

The problem is many don't give value propositions the time of day or even miss it out completely because they don't have a structured process to implement.

Here's how to do it.

Value proposition design - the Step By Step Process

75% of customers prefer it when brands personalize messaging and offers.

As a result, any strong value proposition starts with a deep understanding of your target users desires. The better you know those needs, the more your value proposition design will be laser focused at them.

I will not get into creating a user persona as that is out of the scope of this article but if you want an in depth analysis for building a complete and accurate user persona this will help:

The 3 Categories of a User Persona Template That'll Rock Your Marketing

There are numerous methods to discover users desires such as surveys, market research, face to face meetings and more.

At Build Successful Startups we use a mix of both qualitative and quantitative methods, in this article I will focus specifically on the quantitative approach.

The Outcome Driven Innovation framework.

Let's dive in.

Customer needs and personalization

A Quantifiable Framework for Discovering Your Value Proposition

Meeting customers is an undeniable part of business design and modeling.

But it's an art to be able to conduct unbiased customer meetings. Sure it can be learnt, but it takes practice. Not to mention that the data collected is almost always qualitative.

That's where the Outcome Driven Innovation framework stands above the rest. The process created by Tony Ulwick.

It's a systematic process to uncover your customers most underserved needs and in turn helps you craft innovative products and write super persuasive value propositions.

Here's a short video of Tony on how the idea to answer the question how do customers measure value all started?

Crazy how IBM had it all wrong!

Step 1 - The Market and Core Job to Be Done

The process starts by defining your target market.

In its simplest form a market is a group of people that have the same desires and respond to marketing stimuli and messaging in the same way.

Next, attach a core job statement to this market that you have identified. 

The job statement identifies the overall goal that the customer wants to achieve. Recognizing this is important because products usually provide a solution to just one part of an overall objective.

Here's an example on what that means:

Lets say you provide an online portal listing the best doctors for sports physiotherapy.

If you were to ask a customer "what do you use the portal for?" the answer would be "to find qualified sports doctors".

But that is just one piece of the goal.

If we were to ask the customer "what is your overall objective?" 

The answer would be to book an appointment with a credible doctor that can resolve her recurring sports injury.

So in this scenario, the market + core job to be done would be written as:

For high contact sport athletes who want to book an appointment with a credible sports physiotherapist specializing in recurring injuries.

Much more accurate.

Step 2: The Job Map

Next, we break down the core job into stages to review all the steps that a customer has to go through to achieve her objective.

It is broken down into 8 stages:

Core functional job to be done
  • Define: determining the plan, current status and required resources in order to achieve the core job
  • Locate: determine all the tools, templates, items and criteria required to complete the core job
  • Prepare: what preparations need to be done before the tools can be used to accomplish the job
  • Confirm: verify that all is in order with the preparation before proceeding to execute the core job
  • Execute: what does the customer need to do to implement the core job
  • Monitor: how will the customer measure and track that the job was done successfully
  • Modify: what changes to inputs might customers need to respond to for core job completion
  • Conclude: what does the customer do to class the job as completed

With this detailed breakdown of what the target user does to complete a given job.

The next thing is to understand why she take those steps.

Step 3: Use Desired Outcomes To Reach A Value Proposition Design That Captivates Users

Even if customers conduct the above steps without realizing it, there will still always be a reason behind why they do what they do.

Without uncovering these reasons, our messaging will fall flat and not resonate with customers.

That's why we list out desired outcomes to tap into possible innovation points and fine tuned value propositions.

Here's how.

Design your outcome statement using the following framework:

Desired outcome statement = Direction of improvement (increase, improve, remove, minimize, reduce etc) + Performance metric + Object of control + Contextual clarifier 

Write desired outcome statements for each of the above 8 stages in the job map. You can list several outcomes for each stage as customers can have several reasons for doing a task.

Desired customer outcomes breakdown

For example:

Minimize (direction of improvement) the time it takes (performance metric) to create financial plans (object of control) to present to customers (contextual clarifier)

This exercise provides us with 4 main things:

  1. Most important performance metric to the customer at each stage of the job (time, cost, difficulty, likelihood etc)
  2. Ability to quantify the importance of each desired outcome. More on this below.
  3. As the statement is completely solution independent, the statement is entirely focused on the customers needs and there is no bias into what the solution could be
  4. The overall product roadmap

Following this, it's time to quantify the importance of the outcomes you've listed.

Step 4: How To Confirm Your Most Compelling Value Proposition

Next up in the process, is to survey a statistically significant population of your target audience.

The aim is to get their views on which of the desired outcomes are most important to them where they are least satisfied with existing solutions.

By the end of the exercise you'll be able to easily tally and quantify which desired outcomes are most compelling to your audience.

And in turn, you will have nailed the precise pain-point, and in turn value proposition, that the majority of your users are seeking.

Here's what the template we use looks like to conduct the survey:

Value proposition desired outcomes template

Value Proposition Analysis

Now that we have a clear process to reveal the most enticing proposition for our target audience, there's one last step.

To communicate it in a captivating statement that embodies the value you promise to deliver to the customer.

When analyzing your statement use the following criteria for a stand-out value proposition.

These are not absolute but will give you direction for what to create:

  • Clarity: it shouldn't need explaining for customers to understand
  • Blatant: clearly state what result the customers will get
  • Quantifiable: the more you can communicate the financial value to customer the stronger it will be. Where possible state how much time, money or effort customers will save or make
  • Audience: where possible state specifically who you serve
  • Images/video: use visuals that support the text i.e. customers experiencing the result or the product in action
  • Bullet points: use 3 max to quickly convey the biggest benefits
  • Sub-headline: this will allow you to add more text to explain the your proposition a little further. In fact, a study by CXL Institute found that users spent longer on a value proposition compared to elsewhere on a page when there was more to read

And if you feel pressured into writing it down in one attempt, that's straight up not the case.

The easier way is to just brain dump everything and anything that comes to mind. 

Aim to write 10 to 20 to really squeeze those creative juices.

As you come up with new ideas the magic will quickly appear in those final few iterations.

Key Takeaways

Value is created when the product or service you're offering would normally cost more if compared with existing market solutions.

Value proposition design beings by understanding your target audiences needs, motivations and jobs to be done. 

Knowing your customers most important and most underserved needs opens up room for innovation and focused value propositions leading to a host of advantages like attracting and converting more customers, differentiation, brand authority and higher margins.

Advantages that any forward thinking startup certainly wants.

Determine your customers desired outcomes.

Verify the most important.

To create value propositions that make customers believe your solution is the only one worth it.

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