Why should a customer buy your product instead of somebody elses?
I usually write exclusively about market research, with an emphasis on why entrepreneurs need do it and how they can get started. However, because it is so easy to get caught up in the process but lose sight of the goal, I thought I would spend some time discussing one of the "products" of market research—€”the value proposition.
The value proposition is a simple distillation of how your product solves a problem that is significant for your customer in a way that is differentiated from (and superior to) alternatives. Your value proposition sets forth the compelling reason why a customer would buy your product rather than sticking with established practices or adopting your competitors' products. When crafting your value proposition it is important to bear in mind that "value" is defined by the customer, not by you.
Your value proposition should be easy to understand—€”if it takes 20 minutes to explain, you haven't done your homework. In fact, it should be readily apparent to anyone. The value proposition is one of the first things that potential strategic partners, investors or other funders will look for when assessing your business case. More important, if potential customers don't immediately understand it, you have a problem. Think of your value proposition not as a slogan, but as your corporate DNA.
Market research can help you learn what you need in order to craft and refine your value proposition. Perhaps most importantly, your research effort will provide insight into the significance of the problem you are solving. For instance, a strong secondary research effort followed with multiple customer and expert interviews can give you an intimate, visceral understanding of the problems your customers face, the level of "pain" they experience,