Value Proposition Workbook Crafting Value Proposition : your input

1. The Value Proposition Builder –
Workbook
Dr. Celen P.Paul

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Value Proposition Workbook
Crafting Value Proposition : your input
"Our Soluton"
solves" your problem"
and gives you
" xx benefit"
• Business driver
• Movement
• Metrics

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Test your value proposition =
your nr.1 priority !!!
Value proposition is the #1 thing that determines whether people will bother
reading more about your product or hit the back button.
It’s also the main thing you need to test – if you get it right, it will be a huge boost.
What exactly is a value proposition?
• A value proposition is a promise of value to be delivered. It’s the primary reason a prospect
should buy from you.
• In a nutshell, value proposition is a clear statement that
o explains how your product solves customers’ problems or improves their situation (relevancy),
o delivers specific benefits (quantified value),
o tells the ideal customer why they should buy from you and not from the competition (unique differentiation).
• You have to present your value proposition as the first thing the visitors see on your home
page, but should be visible in all major entry points of the site.
What the value proposition is NOT
• It’s not a slogan or a catch phrase. This is not a value proposition: L’Oréal. Because we’re
worth it.
• It’s not a positioning statement. This is not a value proposition: America’s #1 Bandage Brand.
Heals the wound fast, heals the hurt faster.
• Positioning statement is a subset of a value proposition, but it’s not the same thing.

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What the value proposition consists of
• The value proposition is usually a block of text (a headline, sub-headline
and one paragraph of text) with a visual (photo, hero shot, graphics).
• There is no one right way to go about it, but we suggest you start with the
following formula:
• Headline. What is the end-benefit you’re offering, in 1 short sentence. Can mention the
product and/or the customer. Attention grabber. Compelling but credible.
• Sub-headline or a 2-3 sentence paragraph. A specific explanation of what you do/offer, for
whom and why is it useful.
• 3 bullet points. List the key benefits or features.
• Visual. Images communicate much faster than words. Show the product, the hero shot or an
image reinforcing your main message.
• Evaluate your current value proposition by checking whether it answers the
questions below:
• What product or service is your company selling?
• What is the end-benefit of using it?
• Who is your target customer for this product or service?
• What makes your offering unique and different?
• Use the headline-paragraph-bullets-visual formula to structure the answers.

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How to create a winning value proposition?
• The best value proposition is clear: what is it, for whom and how is it useful?
If those questions are answered, you’re on the right path. Always strive for clarity first.
• If your value proposition makes people go “hmph?”, you’re doing it wrong. If they have to
read a lot of text to understand your offering, you’re doing it wrong.
Sufficient amount of information is crucial for conversions, but you need to draw them in
with a clear, compelling value proposition first.
• Research by Marketing Experiments says that the key challenge companies have is
identifying an effective value proposition, followed by communicating it clearly.
What makes a good value proposition:
• Clarity! It’s easy to understand.
• It communicates the concrete results a customer will get from purchasing and using your
products and/or services.
• It says how it’s different or better than the competitor’s offer.
• It avoids hype (like ‘never seen before amazing miracle product’), superlatives (‘best’)
and business jargon (‘value-added interactions’).
• It can be read and understood in about 5 seconds.
Also, in most cases there is a difference between the value proposition for your company
and your product. You must address both.

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Value Proposition Process :
1st Part of your Action Plan
Position
• Primary Market Analysis
• Demand type
• Chasm / PLC / Boston Grid
WHAT
• What you offer and how you offer it to customers - hypothesis
• MVP ( Minimal Viable Product ) or „ whole „ Product
WHO
• Target Market : segmentation techniques
• Use Problem/Need search process
• Ideal Customer Profile
Value
• Relevancy : Need / Perceived
• Quantified value / qualitative of New Concept
• Unique differentiation

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Value Proposition Builder ( Barnes,et al. 2009 )
1. Market :
• who wants /needs to buy from us
• Where is the urgent NEED / low hanging
fruits
2. Value experience :
3. Offering : WHAT ??
4. Benefits : f ( NC, NP, EM )
5. Differentiation :
• Uniqueness
• Aaa
6. PoC : Proof of Concept
7. Test market concept :
• Interview
• Analyse / Adapt
• Iterate
• Example : iPda - steve jobs 7x

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The Value Proposition Builder™ is a
six-step iterative process.
1. First, you need to decide who to talk to. This means analysing and identifying the MARKET segments,
or specific clients, or target individuals within those clients for whom your solution has the potential to
deliver Value, profitably.
2. Next, analyze and define the VALUE EXPERIENCE that clients get from your organisation from its
current activities. You need to define good, bad and neutral experiences, but what will really make a
difference are those experiential outcomes that have the power of “Wow!”
3. Then, (re)-define the OFFERINGS mix capable of leveraging your proven Value Experience with the
defined target Market group. Fix your first MVP !
4. When you have done this, you are in a position to assess the BENEFITS of the Offerings in the context
of the Value Experience you are able to deliver to the Market group. There is a cost component of
benefits here which includes Price and Customer Risks, enabling the calculation of Value where
Value = Benefits – Cost.
5. You are then able to go on to work out how that provides ALTERNATIVES & DIFFERENTIATION for
your organisation … Please include a competitive analysis or positioning in the VALUE Chain
6. … and back it all up with relevant, substantiated, measurable PROOF. The PoC ! ( Proof of Concept )
Crucially, each element and each step MUST be viewed through the filter of responses already generated.
Iterative Process !!
So, for example, the Value Experience for a particular situation will be related to specific Market segment(s)
or client(s) identified in a Market. Then, the Offering is analysed in terms of the identified Value Experience
related to the specific Market segment. And so on. By so doing, you are forced to focus and drill down in
ever more specific terms.

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• Crafting your
• Value Proposition

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WHAT ?
Describe your product vision and its hypothetical value
Write a statement that describes your product vision, which identifies
one or more of the following:
• Your target customers and their problem
• The product solution you are making
• How the user goes about their job and will use the product solution
• Customer outcomes and benefits
• Three- and five-year scenarios for your product and company
Why do we buy things ?
• List 15 to 20 business values you derive from buying or doing things.
e.g. cost savings, time savings, revenue increase, customer / employee
satisfaction, emotions,…
• Then create a short list that most accurately describes the value your
product offers your customers = why would your potential buyer
purchase your solution or even listen to you

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WHO ?
Create your initial target customer list / customer profile
• Create a list of target customers for the basis of your customer interview.
• Create a 3-Tier list of it and select proportionally
No Questions to ask Answer
1
Who is the target customer? Personify, give them a name,
an age, a gender and a job description. Imagine them as a
real person with real problems.
2 What is their objective? What are they trying to do?
3
What challenges are they facing in pursuing those
objectives?
4
What is the economic impact of not achieving those
objectives?
5
Imagine the customer using your product. What are the
qualities or capabilities in your product that allows the
customer to change/overcome their challenge?
6
In what way do those capabilities affect the customer’s
ability to achieve those objectives?
7
What is the measureable benefit for the customer of
achieving those objectives?

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Value proposition assumptions
No Question Fact (with evidence) Assumption
1. Who is your target customer?
2. What kind of problem do you solve for them?
3. Is this an important problem for this customer? Is it
an urgent problem?
4. How do you plan to solve this problem for the
customer? Describe how your solution will work in
the customer’s hands and the benefits that it will
generate.
5. Who is your competition? How do they solve this
problem for their customers today?
6. What is unique about your way of solving the
problem? Why are you better than anyone else in
solving this problem?
Label each answer as Fact (and list the accompanying evidence) or
Assumption (if you don’t have any evidence at this stage).

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Action List for the Test
Assumption Information Where/Who Method
1.
2.
3.
List the assumptions from previous and then make an action plan :
• What key piece of information would validate or invalidate the assumption? (Information)
• Where does that information reside? Who has that information? (Where/Who)
• What is the best way to gather that information? (Method)

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Create your value proposition
Ask your team/coach/relations to help you answer these questions.
• Has the customer problem been verified?
• Has the product solution been validated?
Conclusion :
• Customer X is looking for: describe specific problem
• You have developed (type of solution, maybe a word or two about how it works
• That helps/generates/creates/saves/improves (or any other benefit)
Customer Problem Solution Benefit
X
Y
Z
20 - 30 = number of test or interviews needed

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Summarize and craft VP-draft
Value Proposition Wording
Find a common denominator for the
• Problem
• Solution
• Benefit
And fill in the template
Customer Problem Solution Benefit
X
Y
Z and 20 others
"Our Soluton"
solves" your problem"
and gives you
" xx benefit"

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Example : Google‘s Value Proposition
Bad :
• Google uses a patented page-ranking algorithm to make money
through ad placement
Good one :
• Google is the world‘s largest search engine that allows internet
users to find relevant information quickly and easily.
Expanded one :
• Google is the world‘s largest search engine that automatically
provides advertisers with potential customers tailored to the
ad content, increasing click-thorugh and conversion rates

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Test your Value Proposition with
prospect interviews

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Initial Approach : Search not execute
a structured process for testing business model hypothesis
Think
Plan
ExecuteAnalyse
Adapt
Think
Plan
ExecuteAnalyse
Adapt
Understand Customer
Problem and Need
Develop Validate
Develop Sustainable
Business Model
Adaptive
Learning
When not enough paying customers
GTM
?

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Understand Customer Problem and Need
• What problem causes the pain or frustration? Sketch a scenario in which the
customer attempts a task and feels pain as a result.
• How does the customer try to cope with the problem now?
• What is causing the problem? What is interfering with a speedy solution? What
goes wrong and why?
• How much money is the customer losing, either in additional costs or lost
revenue? Quantify the pain.
• Who is the individual who feels the pain first and how does it “waterfall” up or
down?
• Who else feels the pain? The customer’s customers? Suppliers? Partners?
Investors?
Think
Plan
ExecuteAnalyse
Adapt
Phase 1
Test customers /
prospect‘s perception
• of the problem and
• his urgency / need to
solve it

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Welcome
•Set stage
•1-2 minutes
Collect
•Collect demografics
•Check/test customer segment
Story tell
•Set problem context
•Few minutes
Problem Rank
•Test Problem
•5 minutes
Explore
•Explore customers world view
•Test Problem – 15 minutes
Wrap Up
•The hook and ask
•2 minutes
Results
•Document results
•5 minutes
Problem Interview in 30 minutes
( example of a typical approach / write a script !)
• Briefly set the stage about how the
talk will work
• Ask introductory questions to test
Customer Segment
• Identify early adapters
• Illustrate top problems
• State top 1-3 problems and check /
rank with customer
• Test each problem. Ask how they
address today. Listen
• Ask follow-up questions
• Permission to follow-up
• Referrals
• Document Results

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Prepare to talk to customers :
make a flexible script with arguments
• General remark :
• Not much time – similar to cold calling
• Prepare your list of questions and issues to address in your customer meeting / talk / interview (
see also “ script manual” in the coaching toolbox )
• Key components / questions:
• Will come from the list of information that needs to be validated
• Formulate yr-offering in one, clear, understandable sentence ( yr VP) as an introduction / starting
point
• Quick check if yr contact is early adapter or pragmatician
• Need analysis :
o What problem causes the pain or frustration? How and why ? a result.
o How does the customer try to cope with the problem now?
o What is causing the problem? What is interfering with a speedy solution? What goes wrong and why?
o How much money is the customer losing, either in additional costs or lost revenue? Quantify the pain.
o Who is the individual who feels the pain first and how does it “waterfall” up or down?
o Who else feels the pain? The customer’s customers? Suppliers? Partners? Investors?
• What type of value or benefit is associated with your offering
o Does yr contact see a need for yr solution? which one ?
o How the value is generated and why it differs from anything else on the market.
• Take and Talk to a couple of companies out of each sub-segment

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Prepare to talk to customers
• What are the key political, regulatory, economic, environmental,
social, cultural and technological trends that affect the space
you are in?
• What are the key issues facing customers in this space?
• Who are the key stakeholders?
• Who are the analyst firms, analysts, journalists, bloggers and
conference presenters that talk about relevant issues and
technology?
• What are the main conferences and events?
• What are the main media outlets that keep people informed
about the industry and its technology?
• Prepare your list of questions and issues to address in your
customer meeting / talk / interview

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Example of possible flow / scenario
VP as Intro
Familiar
Y NCheck Early
Adapter
Listen
N Y
Explain challenges
Interested
Y
N Nurturing Dbase
Over & Out
Agree on follow-up
• Webinar
• Meeting CEO
• Conf.call
• Etc...
If qualification OK
Need analysis
• Try to find out why MVP
is not enough
• Under what conditions
would he move forward
• What is whole product
for him
Need Analysis
• What is the pain
• Who has the pain
Value perception :
• Is he willing to pay if
MVP is extended
• What`s the urgency
• How much
Value perception :
• Is he willing to pay if
MVP is extended
• What`s the urgency
• How much
Fill in slide 8

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Summarize interviews
Conclusion :
• Customer X is looking for: describe specific problem / need ( 1st column )
• PLS have developed a solution for it ( maybe a few words about how it works )
• That helps/generates/creates/saves/improves (or any other) benefit the contact agrees with
Customer Problem Solution Benefit
Customer 1
Customer 2
Customer 3
Customer ..
Customer 20 or
30

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Evaluate market feedback
• Is the market problem urgent? Will customers care if
the problem is not solved? Do they have another
way to solve this problem?
• Is the market problem pervasive? Determine if the
identified market problem applies to a significant
percentage of your desired target market.
• Will your buyers pay to have this problem solved?
• On the basis of the answers to the above questions,
which direction should you take?

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Update your problem statement
Write a brief description of the specific problem your
target customers face, as well as the impact of the
problem and its pervasiveness. Include the following
information:
• The objective of their work: What are they trying to
achieve?
• How they perform their work
• The problem they face
• How the problem impacts their objective

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Result

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Once you’ve clarified your value proposition, you
can use it in your:
• Voicemails
• Email messages
• Conversations
• Presentations
• Proposals
In short, in every customer interaction.
The key word is
OUTCOMES!

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The best ones include
these 3 components:
So what makes
a value proposition
powerful & effective?
• Business driver
• Movement
• Metrics

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Tips
• A business driver is related to an important objective that your prospects are
measured on. The best business drivers are very specific. Being specific makes
you stand out from your competitors. Here are some examples…
• Profitability Cost of goods sold Productivity Revenue Costs
• Speed to market Customer satisfaction Quality Returns Reviews
• New clients Market Share Competitive advantage Turnaround time
• Because people only change if a new option is better than the status quo and
can positively impact their key business drivers.
• “Movement” words like these belong in value propositions:
Eliminate Speed Up Raise Minimize Decrease Cut Shrink Increase
Maximize
• Metrics : Strong Value Propositions Have Metrics Too
Dollars/Euros Time frames Percentages
To your prospects,
19.7% is much more
believable than 20%.

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Value Proposition WordingsThat Work
other Proven Templates for Writing
• Geoff Moore's ( Technology Adoption Cycle – Chasm Theory )
• Template : “For (target customer) who (statement of the need or opportunity) our
(product/service name) is (product category) that (statement of benefit) “
• Example : “ For non-technical marketers who struggle to find return on investment in
social media our product is a web-based analytics software that translates engagement
metrics into actionable revenue metrics.”
• Steve Blank's XYZ
• Template : “We help X do Y doing Z”.
• Example : “ We help non-technical marketers discover return on investment in social
media by turning engagement metrics into revenue metrics. “
• Patrick Vlaskovits & Brant Cooper's CPS
• Template : Customer :(who your customer is). Problem:(what problem you're solving for
the customer). Solution:(what is your solution for the problem).
• Example : “ We help non-technical marketers discover return on investment in social
media by turning engagement
• Dave McClure's Elevator Ride : KISS – NO expert jargon
• Template : Short, simple, memorable; what, how, why- 3 keywords or phrases
• Example : "Mint.com is the free, easy way to manage your money online."

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Typical Value Proposition
“We create high quality, affordable websites for companies who do
business online “
Web Marketing Firm
Same Company, Stronger Value Proposition :
Example 1: We help retailers increase their online
conversion rates by up to 58%.
Example 2: In our work with online retailers, we typically
increase average order size between 22 - 37%.
In this case prospects delete you in a nanosecond.

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Multinational/Medium Size:
We save time and money easily finding and
sharing the right data providing the missing link
to the end users.
Medium/Small Size:
You don’t need data experts or special
reports to for mining vast amounts of
biomedical data.
Academic data sharing:
Not only do you get easy access to vast amounts
of biomedical data, you can also easily share your
data & resources.
From 30.000 employees, 5% at average salary
of 120K/yr do regular searches where we save
them at least 10% of their time saving
(30K FTEs*5%users*€120K*10% win=) €xyz
mio.
You win the salary of at least 1 data
scientist/expert which equals €120K or at
least 10 reports per year that equal €100K.
Visibility for one deal with an industrial
partner wins you huge amounts of money
and
at least €120K per deal.
Example iMinds Start-Up for 3-Tier structure