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To stand out in a market saturated with consumer products and get the attention of consumers deluged with advertising appeals, an entrepreneur needs to offer a product or service with obvious benefits and unquestionable superiority over the competition.
That isn’t as easy as it sounds. The history of United States commerce is littered with countless products whose inventors misjudged the market’s appetite or need.
Getting a product or service to market begins with a value proposition: a sober evaluation of who the product is for, what need it will fulfill, what dissatisfies consumers about the products currently being used to fulfill that need and how the new product is a marked improvement.
A value proposition should make members of the target audience feel upbeat about the benefits a product or service will bring them. That benefit is usually presented as the solution to a problem. For example, a house-sitting service solves the problem of home upkeep and security for a retired homeowner who prefers the sun to the snow in winter.
The value proposition is even easier for the business owner to generate if many people in the service area have the same need and other providers can’t be found at an affordable rate.
What matters are the consumer’s perceptions of the tangible and intangible — the emotional or social — values of a product or service. It’s the reason why products that offer essentially identical functions or features can charge such different prices; some satisfy a consumer’s deeper needs, whether for status or confidence or ease of use, than others do.
Will It Fly?
After defining the problem a product or service will solve, the entrepreneur should identify what, if anything, about the offering is qualitatively different — even exceptional — and not just faster or cheaper than other products or services in the market.
The creator of the pet rock sold simple gray stones, complete with a pet carrier and instruction manual, using the pitch that they were maintenance-free companions, unlike dogs or cats. The fad lasted less than a year, but it made its creator a millionaire — all because he had a value proposition for his novelty product.
Entrepreneurs who want to be in business longer than a year selling truly useful products or services must honestly appraise whether they’re offering a fundamental upgrade or innovation. If they are, the next test is a clear-eyed assessment of the market’s willingness to switch from what’s currently solving the problem to giving the new product a try.
Once the value proposition for a product or service is articulated and evaluated objectively by its creator — and ideally vetted by an even more objective third party —that proposition should be central to product branding and marketing.
Finance New Mexico is a public service initiative to assist individuals and businesses with obtaining skills and funding resources for their business or idea. To learn more, go to FinanceNewMexico.org.