Have you heard? My new book Continuous Discovery Habits is now available. Get the product trio's guide to a structured and sustainable approach to continuous discovery. It’s easy to be fooled by the Facebooks and the Googles of the world.
Everyone uses their products. They make it easy to rationalize why everyone will use your product.
But when you draw this conclusion, you skip right from A to Z, ignoring all the steps they took in between.
Over a billion people use Facebook. But they started just for Harvard students. Then they spread to other Ivy Leagues. Than to other college campuses. Eventually they opened it up to everyone.
Google Search launched at a time when search engines were under siege by keyword stuffers and black hat SEO firms. Google built a product that was indisputably exponentially better than anything else in the market. But even so, everyone didn’t use their product. They had to partner with Yahoo and AOL to gain traction during their earliest years.
Even today’s juggernauts had to start small. They didn’t start by building something for everyone.
What Startup Founders Often Get Wrong
I can’t tell you how many times I’ve heard a founder exclaim, “We are going to sell to anyone and everyone and then see who gets the most value out of it.”
Wrong, wrong, wrong.
When you sell to everyone, you build for everyone.
When you build for everyone, no one gets enough value out of your product. – Tweet This
In this post, I tell a story of a fitness trainer who is launching a personalized gym workout product.
I ask him a series of questions that leads us to discuss why he shouldn’t trust survey responses that indicated that people would pay for his product.
It’s a common mistake. If you missed it, be sure to check it out.
But ripping apart his survey wasn’t the intent behind my original questions. Can you guess what was?
I asked him, “Who are you targeting?” and “Why do they go to the gym?”
I was trying to assess whether or not his value proposition aligned with his customer segment.
But like many founders, he hadn’t clearly defined either.
Choose a Specific Customer Segment
A customer segment is a group of people whom you intend to target. They usually share something in common.
Fitness trainer guy defined his customer segment as anyone who goes to the gym. This might be a good segment for some products, but it wasn’t specific enough for his.
Not everyone who goes to the gym will want personalized gym workouts.
He should be asking himself, “Who would benefit most from personalized gym workouts?”
There are many answers to this question. Runners, olympic lifters, people who want to lose weight, biohackers.
The list is infinite. The key is to choose one.
Align a Clear Value Proposition with a Specific Segment
A value proposition is the way in which a product or service delivers value.
It’s hard to assess whether or not your idea, product, or business is viable without first assessing whether or not your value proposition resonates with your customer segment.
It’s easy to confuse your value proposition with your idea itself. But they aren’t the same. – Tweet This
For example, fitness trainer guy might argue that his value proposition is free gym workouts. But this is what he’s building, not why it delivers value.
Think about it this way: You are building a product (the what) for a customer segment (the who) because it delivers a specific value (the why).
The what (the product itself) might not change for different customer segments, but more often that not the why (the value proposition) will.
If fitness trainer guy chooses runners as his customer segment, the value proposition might be to build core strength and avoid injury.
If he targets olympic lifters, the value proposition might be to build power and agility quickly.
If he targets people who want to lose weight, his value proposition might be predictable, consistent weight loss.
Each segment has its own value proposition even though the product might not change. Choosing a value proposition and customer segment often happens in tandem, you iterate on both until you get a pair that matches.
Test Whether or Not Your Value Proposition Resonates With Your Customer Segment
It’s not enough to just think your way to your value proposition.
You need to verify that your value proposition resonates with your customer segment. – Tweet This
There are many ways to do this. In fact, this is often the purpose of an MVP.
Fitness trainer guy might launch three different landing pages: one targeting runners, one for Olympic lifters, and another for peoples who want to lose weight. Each with messaging that touts the value proposition appropriate for each audience.
As long as he can drive the right type of traffic to each of these pages, he can test whether or not his value proposition resonates based on the interest each page garners.
Depending on what stage of product development he is at, he can measure interest by collecting email addresses or asking people to pay for the service.
An important point to not overlook is to make sure that you are driving people from the appropriate customer segment to the right page.
If fitness trainer guy tells all of his friends about his new service and none of them are Olympic lifters, then he’s not going to see very good conversion rates. But he shouldn’t conclude that the value proposition doesn’t resonate with his customer segment, as he hasn’t tested it with the right people.
You have to test your value proposition with the right customer segment and measure action not just interest. – Tweet This
Why This Matters for All Product Managers
If you aren’t a founder you might be thinking this post isn’t for you. But you would be wrong.
Value proposition and customer segment alignment is needed at each stage of building a product.
As we’ve seen, it’s needed in the earliest days when working through your product vision, but it’s also needed when you add new features, when you write product copy, and when you define how you will measure success.
These are all activities that most product managers do every day.
The feature set that appeals to a runner is going to be different from the feature set that is going to appeal to someone who is trying to lose weight.
Copy that appeals to an Olympic lifter isn’t going to appeal to a runner.
If fitness trainer guy, measured success by how much weight his users lost while using his workouts, his weight loss segment would be satisfied, but his Olympic lifters would be disappointed.
Your value proposition needs to be reinforced throughout your product. Your home page copy should make a promise that your product delivers on.
The more that promise resonates with your chosen customer segment the better your product will perform.
So don’t leave value proposition and customer segment alignment to the strategists. It needs to be integrated into all of your product decisions.
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