There are many reasons sales of new products fall below expectations, many of which are rooted in poorly developed value propositions.  Research has shown that projects that are well-defined prior to the development phase are 3x more likely to succeed than those that are not.  According to Winning at New Products, properly defining a product includes identifying the target market and their unmet needs, describing the benefits to be delivered, and listing the features to be included while prioritizing the “must have” features versus the “desired to have” features.  In short, having a properly constructed value proposition makes new products significantly more likely to be successful.

Industrial Market Insight helps your teams focus on the three foundational elements of the value proposition to ensure that a market exists for your new products BEFORE you develop them.  These three elements are:

1. Targeting:  who is the target customer and how many of them exist?
2. Benefits:  what significant problems does this solve for the customer?
3. Differentiation:  what separates your product or service from direct and indirect competition?

If fundamental questions in each of these 3 areas are answered, the probability of reaching or exceeding sales goals increases dramatically.

Industrial Market Insight can obtain the answers you need, or provide training and methodologies to allow them to get the answers on their own.

The process of developing a strong value proposition forces the project team to consider the quantifiable benefits that are delivered to the target customers AND how the solution offered is different from the competition.  This forces the team to consider things such as:

• Who are the target customers and how big is the market opportunity?

• What problem does this solve for the customer and how much will they be willing to pay for it?

• What other solutions to this problem exist, and why is our solution the best option for customers?

The answers to these questions are critical elements of the business case that are often overlooked by product development teams.  Industrial Market Insight can gather this information for you or train your team in the best practice used by leading global industrial manufacturers.

The process of developing a strong value proposition forces the development team to consider what product features will deliver benefits that solve customer problems.  These are the features that B2B customers are willing to pay for!

By identifying critical features, the project team can exclude product features that do not add significant value from a customer perspective.  Elimination of features reduces project complexity, accelerates development, and gets products to market more quickly.

Of course you can, provided that they have the proper training and tools, and that they are given the time needed to put in the work that is required.

The tools, techniques, and skill sets needed to develop a value proposition in B2B are different than B2C.  Industrial Market Insight can train your team or provide experienced resources to develop value propositions for your projects.

Product managers and product development teams are often so busy solving today’s problems that they can’t spend adequate time framing future projects.  Sales people are accustomed to talking about products they have to sell now rather than listening for new product opportunities.  Value proposition training works best if responsibilities are shifted to allow people time to focus on the future.

If your team will be given time to develop value propositions for new products, training is the best option.  If you don’t have adequate resources or want to move quickly, Industrial Market Insight can work with your team to get the work done.  Inquire about a project today.

Industrial Market Insight has identified five dimensions of the value proposition, each of which must be done well in order for a new product to be successful.

5 Dimensions of the Value Proposition

• Structure:  what does a good value proposition look like?

• Targeting:  who will purchase this product or service?

• Identifing significant benefits:  what important problems does this solve for the target customer?

• Quantifying Benefits:  how much value does this create and what might be charged?

• Differentiating Solutions:  how is this superior to direct and indirect competition?

By focusing on these 5 areas, you can be sure that your product or service will solve a problem that is important to customers and they will be glad to purchase from you.

More information can be found in the video “5 Dimensions of the Value Proposition” below.

It is hard to kill projects.  So hard, in fact, that many innovation portfolios have a few large projects and a long tail of smaller projects that consume resources while adding very little to the value of the pipeline.  Companies are often reluctant to kill projects because it will shrink the value portfolio or they are concerned that development personnel will not have enough to work on.

News flash: the small projects in your portfolio that never leave the portfolio aren’t getting enough attention to advance, and serve as a distraction that slows progress on more important projects.

In your portfolio management process, focus on the value proposition for each project.  If a project lacks a clearly articulated and well understood value proposition, dedicate resources to develop the value proposition or kill the project.  Find out how Industrial Market Insight can help.