When attempting to define a product, it is key to discover the core value proposition to the user or customer of the product. For many products, this results in the product developer putting together a long list of benefits and values. Here's the problem: defining what is core. It is critical to define the key reasons to buy the product; the key reasons to believe in it.
When I was working at Green Dot I was part of the product management team that sold our reloadable prepaid debit card in retail. This is a virtual checking account style product. You can load an account at a retail store with cash or via a Direct Deposit through the banking system. You can access these funds by making a purchase over the Visa or MasterCard network. You can also take the cash back out at an ATM.
At the time, our core user was someone who was previously "unbanked." This means that they did not have (or at least did not use) traditional banking products such as a checking account, savings account, or a credit card. The user's income was likely less than $50,000 and they were likely to use alternative financial services such as check cashing stores.
These products were sold at retail: in drug stores (Walgreens, Rite Aid, CVS), grocery stores (Kroger, Ralphs), and mass merchants (Walmart, Meijer, Kmart). We had packages that were approximately 3 inches by 5 inches on a display rack next to prepaid calling cards, gift cards, etc.
We were working on new packaging to drive increased sales of our product. We conducted quite a bit of research on existing users, as well as with potential users (the latter involved some fun hours spent outside of a Walgreens). As a result of this research, we developed a long list of value propositions (features and benefits). The total list numbered somewhere in the mid-eighties. Some of these value propositions were simple, such "can get a second card and monitor my kid's spending" or "track my purchases."
As we went through all the value propositions, we focused on the core reasons to buy the product. We looked for the fewest items that caused the most people to decide to acquire the product. This is a variation on the general 80/20 rule. We are looking for which 20% of the value propositions that drive 80% of the purchase behavior.
In the end, this was an even more extreme example. Three of the reasons out of say 85 (3.5%) would cause about 85% of users to buy the product:
- No credit check required
- Safer than cash
- Use it anywhere Visa (or MasterCard) is accepted
We took these three core value propositions and put them everywhere. They are reasons to buy the product. The vast majority of users could read these and believe that the product would solve their problem. Yes, the product did 80 other things for them (potentially), but these three items were the key items.
When I speak to founders about early stage product development, product market fit, and marketing, I find that they tend to provide me with a long list of features and benefits their product accomplishes. It comes across to me like a laundry list of benefits, without thought or reason. It seems that the viewpoint is that by providing a longer list, then the more I will think the product is better (further developed, worth investing in, etc., etc.).
I am more impressed when I am presented with a product that has a single (let alone two or three) key value propositions. This is one of the hardest parts of product management that I have noted before: You have to find a problem to solve for your users. It may sound simple, but it is not.
If you're not building your own product today, or you simply want to practice this, you can practice by examining some of your favorite products and asking yourself: Why did I buy this? You can take a look at the company's or product's marketing materials and see what language they use to describe the product and how (if) your reason fits in.
In the end, products are selling something, even if they free. It is incumbent upon the provider of the product or service to ensure that there is a good reason to buy it.