Part 3: Product Value Proposition

It’s time to talk about how your Product Value Proposition influences your pricing.

Academically speaking, it can be defined as the mix of benefits and economic value your product promises to fulfill, what benefits will your customer get when buying your product. It’s what sets your product apart from the rest.

As Product Managers, we need to understand our products from A to Z; we’re the translators of customer needs, communicate to the organization and come up with a product that the customer will value, the organization is able to produce and sustain, while reaching business goals.

At this point, you already have a connection to your product, the industry and your customer. We’re already “in love” and just need to find the way how, not just our customer, but also the sales team and business partners to fall in love with it too.

The value proposition should be simple, no need to over explain. We need to know what’s important to our customers, what job we are trying to fulfill and how are we doing it differently than the competition. VERY IMPORTANT! We need to match the language of our target audience. If our product’s value proposition relies on the technical composition of our product, but our target audience is not highly technical, we need to speak about the benefit… And vice versa, if our target audience is highly technical, we need to be technical as well, for us to be seen and an authority in the industry.

Your product’s value proposition is what sets it apart from the competition. It’s the reason consumers would choose your product over others. When determining pricing, consider how your product’s unique features, benefits, and advantages translate into value for your customers. Is it something your customers are willing to pay more for? It may be the case, the value proposition is to be the affordable option… is it affordable enough for your customers to sacrifice some benefits and buy your product?

Please remember, this is not the absolute truth, it’s what I’ve learned and has worked for me while managing durable goods.

📢 Stay tuned for Part 4: Pricing Approach!