The value proposition of a product has to be decided by the customer, says Anshumani Ruddra of Hotstar
In this episode of Prime Knowledge series, Anshumani Ruddra, VP of Product, Hotstar, talks about the three pillars of product value proposition, and how to define one.
Deciding the value proposition of your product is naturally the founder’s job. As the product creator, the founder should be the one to state to his or her customers what value the product brings to their lives.
Anshumani Ruddra
Anushmani Ruddra, VP, Product, Hotstar, says,
“But product value proposition, in reality, is so much more than the subtitle you write on your website, or the hyped words that you scratch on your banner”.
It is the definition of your company explaining what your product stands for, why users should be paying you their money, and how you stand out in the market despite all the competition. Sure, you are the creator of the product, but the value you intend to add has to be decided by the customer.
Three pillars of the product value proposition
Successful products in the market that are unshakeable from their thrones typically rests on the following three pillars.
Take one away and the product will collapse - customer’s pain points, target users, and exclusivity.
Obviously, you will want to build a product around the customer’s existing pain points. The more the pain, the better your product will succeed. Next, you can only target the pain points of a set group of customers. Taste starts varying with age, gender, demographics, income, culture, and more.
Lastly, your products must beat the competition in the market by a fair margin. Without that edge, you will simply be landing in the crowd where your customers will lose sight of you.
How do you design these pillars?
By listening to your customers. At the end of the day, you are trying to address their pain points. You are trying to bring benefits to them. They should be telling you what they want to buy and the values they are expecting out of your product. If you design based on your perceived notions, the chance of a clash will remain.
What you might think the value proposition of your product is, might not be the true value proposition of the market. So, as creators, you need to decide your target customers and jot down their pain points first. Exclusivity should come next where you will look to improve your product than what already exists.
Then, you can hope that your defined value proposition will match the customers’ and keep on refining until the final decision. Catchphrases, slogans, bold headlines – these are simply the attires of your value proposition. Your customers will easily ignore these if the basic benefits are missing.
Take the launch of Virgin Airways as an example. Its founder Richard Branson was a regular of British Airways. By being a customer himself and meddling with other customers, he pinpointed the pain points and target audiences for his own brand. Virgin Airways opened doors, and has a direct competitor to British Airways. Branson focussed on impeccable service and economic fares – both missing from his competitor.
He later brought in exclusivity by operating a door-to-airport limousine service for his business class passengers and raked up a substantial section of the market. In a way, the customers decided Virgin’s product value proposition. Richard Branson really listened.
Once defined, be clear
There have also been cases where the product designers have done everything right, but missed out on being clear about the defined proposition.
A lack of clarity never really launched the product from its initial foothold, while another came in to eat up the market.
Once you have correctly designed your three pillars, get to work to properly place them in the sight of your customers.
It is also important to clearly state what are you selling, why should they be buying, how are you different, and what values should they expect. Do not back down from separating your product from your competitors. Everyone knows alternatives exist. Take the opportunity to show your customers that you are the best.
The market is the ultimate decider
Are you going for the monetary value? This will have a specific set of customers. Are you going for the service value? Look for users who do not care about the price. All three pillars of the product value proposition are inter-connected, and it is the market that decides what they want.
Make sure what you are portraying through your product is also the true value proposition perceived by your customers. The best way to achieve that is to let them take the lead while designing your product.
(Edited by Megha Reddy)