After preaching the virtues of the Business Model Canvas during a product development Concept phase, I wanted to dig a bit deeper into the value of having a great Value Proposition. Unfortunately I've seen some pretty abysmal value props which leads to the misunderstanding of the product, it's inefficient development thereof, or it's importance ($) to the product portfolio. At the end of the day your value prop (or think of it as the product's value 'statement') should be clearly articulated, easy to understand, and targeted.
So let's start with the basics, what is a value prop? Wikipedia says "A value proposition is a promise of value to be delivered and acknowledged and a belief from the customer that value will be delivered and experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services."
Granted "value" is largely a subjective term because each customer has a different interpretation of what value means to them. So in order to understand the value of a particular product, or service, first you must understand who your customers are and then work with this audience to help guide your decisions. All too often products are developed because of a random business opportunity or misguided flash of brilliance, not necessarily driven by the needs/wants of the customer, so focusing on your customers will result in a more targeted value prop. Your final value prop (aka your elevator speach) can serve as a significant resource as you pitch your idea to sales, marketing or c-level stakeholders.
Strategyzer has a great video on how to use the Value Proposition Canvas which I encourage everyone to view. The value prop is a key component of the Business Model Canvas so the better the value prop, the stronger the BMC will be which will more successfully evolve into the right product, at the right time, for the right price.