Product managers (PMs), in particular, should strive to be part of the defining process. This mix of product and customer perspectives will ensure that everyone understands which key points to focus on. The product team should be influential in the process of developing a value proposition, with significant input from marketing, customer support, and sales. However, without communication of the value it provides, the product could be doomed to be overlooked and underappreciated. To develop one, an organization must have both a profound knowledge of prospective customers and also of its products or services.Īn organization can have the best product in the world. It helps align an organization with the messaging to use across all interactions and representations of a product or service. Today, a strong value proposition has evolved to provide a clear business strategy. The paper’s authors, Michael Lanning and Edward Michaels, defined it as “a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits.” The first mention of the term “value proposition” appeared in a 1988 staff paper forMcKinsey and Company’s consulting firmy. What Is the History of a Value Proposition? It inspires a customer’s belief in a product or service. It motivates potential customers to choose a product or service over others in the marketplace, thus giving organizations a powerful competitive advantage.Ī value proposition can apply to an entire organization or entity within an organization (e.g., customer accounts, products, or services).Īt its core, it’s all about perceived value. When done well, it serves as a competitive differentiator. A value proposition is a statement that identifies measurable benefits prospective customers can expect when buying a product or service.

Value perception definition