This article explores the necessity of designing Customer Value Propositions that are aligned with consumer needs and give some tips on the most important aspects to focus on.
Are consumers buying what you are selling? Finding the perfect fit between your value offering and the needs of consumers is an art… backed by the latest science.
Is your value proposition aligned with the needs of consumers?
Every company has a value proposition it offers to its customers. This value offering can take various forms:
Getting an idea for a consumer offering is the easy part. Designing all the benefits and features of your offering and knowing how much to charge consumers is a lot more difficult. There are numerous aspects that you can include in your value proposition, and these can be combined in a multitude of ways. Ask yourself if your value proposition ticks the following boxes?
5 Characteristics of an excellent value proposition
For a product or service value proposition to have commercial success, it needs to fulfil the following criteria:
Delivering unsurpassed value
To be successful in today’s economic climate, your value offering should be based on the five characteristics above, but it should also be better than what your competitors are offering. One of the key challenges for organisations is how to differentiate themselves from their competitors. As products and services become more commoditized, companies should guard against just offering “more of the same.”
To triumph over your competitors, you need to be different! You need to offer something that consumers cannot get anywhere else. Many organisations pride themselves on offering something unique and exceptional while in the eyes of consumers these features are ordinary and nothing more than what they expect to get. To be successful you have to offer consumers Unsurpassed Value.
Finding the perfect fit
Newway Insight specialises in uncovering the drivers of consumer choice and assisting companies in designing the optimal value offering:
- aligned with consumers’ needs and preferences, and
- differentiated from what competitors offer
In doing so, we find the perfect fit between the needs of consumers and your value proposition.
Modelling consumer’s purchase decisions
Today’s consumers are educated, knowledgeable, opinionated, and always looking for the best deal. Gone are the days when consumers take the first offer that comes along. They compare offers and choose the one that best meets their needs at a price that fits their budget and gives them value for money.
At Newway Insight, we replicate this real-world buying scenario by asking consumers to compare various value propositions and choose the offer they will most likely buy. As they make choices, our advanced AI (Artificial Intelligence) program starts to predict what a consumer’s next choice will be, based on the offerings they chose previously. During this process, we identify the drivers of consumers’ choices (i.e., why they prefer one value offering over another).
This highly scientific and innovative approach produces key insights that address six critical areas of value proposition development.
Our mathematical model designs the optimal value propositions for various market segments and models the commercial success of each value proposition at specific price points.
Four strategic objectives
These insights inform four important strategic objectives of any organisation.
A real-world example:
In a recent study conducted in the financial sector, we learned that many of the features included in a financial product offering were irrelevant to most consumers. They either had these elements as part of other products they already owned, or it was not important enough that they were willing to pay a premium for these features. What the offering lacked was something simple that made customers’ lives easier. Essentially the offering was over-engineered and included a host of features that nobody wanted but had to pay for. The company used this information to design a simple offering, at a fraction of the cost that competitors charged and targeted a specific segment in the market that was previously not serviced.
Newway Insight can assist any organisation with developing a value proposition that is differentiated based on consumer needs.