We’ve all had a close relationship with some product or brand that resonates with our purpose. Some might be closer to our hearts than others, but in the end, we follow and make decisions based on a brand’s influence on us. To better understand this influence, it is essential to break down the key elements that play a part in the value exchange process: Benefits, price, and perceived value.
According to McKinsey & Co’s 1988 Industry paper about value proposition design, “A Business is a Value Delivery System,” benefits both tangible and intangible minus the price a customer pays will result in the perceived value.
The key to creating a solid value proposition lies in understanding the real benefit your product or service gives customers regarding the price they are willing to pay.
Benefits – price = perceived value
In this blog article, you will understand the three key takeaways to keep in mind while designing your value proposition and maintaining your desired perceived value.
1. Focus on your customer pains, not your technology
Faster, stronger, and shinier aren’t always the benefits your customers seek while trying to satisfy their needs. Digging deep into your customers’ minds and behaviors can allow you to identify customer pains. As a designer, you can flip these pain points into benefits that positively impact value creation. Applying design thinking and research techniques to product and service design processes sheds light on essential jobs to be done, unmet needs, and benefits your brand could capitalize on. Frequently, internal teams push for features they believe would be great for their customers without any research, resulting in products and services that don’t satisfy customers’ real pains or needs.
2. Go beyond functionality. What are Some of your Customer’s Social and Emotional Benefits?
When applying design research techniques and discovering your customers’ desires, the most common mistake is to focus only on functional benefits, which refer to the performance of a product or service, such as time, capacity, and size. By uncovering emotional benefits like nostalgia, fun, and wellness or social benefits like belonging, you can build a solid value-based proposal that your customers can relate to.
Social and emotional benefits carry meaning for customers, and adding more depth allows connections to solidify. To understand the meaning, brands should get closer to their clients in different contexts. Depending on a particular context, the same person may react differently to the same stimulus. Therefore designers and researchers must develop comprehensive archetypes and user personas that fluidly adapt to the customer’s changing behavior relating to the context.
Although understanding customer needs is essential, your business should not be guided solely by what your customers find important. Companies should offer emotional and social benefits that reflect their true purpose to avoid being flagged as opportunistic and vapid. They should be true to their purpose and follow what they believe because customers can sense when there is pure hype and no meaning.
3. Aim for a Sustained Competitive Advantage
As many products and services flood the market, customers have an ocean of options. The best way to stand out from the crowd lies in how well brands can balance their purpose and perceived value. However, the perception of value isn’t static; benefits lose importance by becoming ubiquitous, and customers expect more. For companies to keep up with customers’ ever changing expectations, evolution and change should be on every company’s roadmap.
A sustained competitive advantage requires constant effort due to the complexity of understanding and delivering value. Companies can begin to achieve a sustained competitive advantage by creating a value map, a tool designed by Strategyzer that helps assess how benefits respond to their customer’s pains, needs, and desires. Additionally, the value map helps track how companies should evolve their focus to maintain relevance over time.
At Empathy Strategic Design Studio, we identify profitable opportunities and validate new sustainable business models that capture value for you and your customers. We conduct extensive qualitative studies to uncover insights that allow companies to better connect with their client’s emotions. Through our “Empathy – centric design,” we bring people and context together to shine a light on how design decisions affect environments in which humans are not alone.
Please look at our Strategy and Business design service or send us a message! We’ll be waiting for you on our drawing board.