Value Proposition and Customer Segment
A tutoring app can have the best teachers in the country: if it targets retired men instead of middle school students, it won't sell a single class. The sales function starts before talking about price or advertising: it starts by deciding who you are selling to and what you are promising them.
The value proposition: the promise to the customer
Every value proposition starts from a real problem. Before asking "What am I selling?", it helps to ask "What am I solving, and for whom?".
Explain what a business's value proposition is and draft the value proposition for a driving school that only gives lessons in the afternoons and at weekends, designed…
Explain what a business's value proposition is and draft the value proposition for a driving school that only gives lessons in the afternoons and at weekends, designed for working people.
A start-up sells boxes of "wonky" fruit, rejected for its appearance but in perfect condition, with home delivery 30% cheaper than in supermarkets. a) Write its value…
A start-up sells boxes of "wonky" fruit, rejected for its appearance but in perfect condition, with home delivery 30% cheaper than in supermarkets. a) Write its value proposition in one or two sentences. b) Define its most likely customer segment and justify your answer.
Segmenting the market and defining the ideal customer
State which customer segment is the most logical for each offer and justify your answer: trendy designer sunglasses for 500 pesos, a set lunch menu next to an office…
State which customer segment is the most logical for each offer and justify your answer: trendy designer sunglasses for 500 pesos, a set lunch menu next to an office park, and travel insurance covering extreme sports.
Design the value proposition for an online tutoring service for high school students. Start with their pain points (rigid schedules, embarrassment about asking questions…
Design the value proposition for an online tutoring service for high school students. Start with their pain points (rigid schedules, embarrassment about asking questions in front of the class) and the gains they seek (passing, truly understanding), and draft a proposal that fits them, stating the target segment.
The fit between proposition and segment
A value proposition only works when it fits a specific segment. What solves a problem for one group may not interest another.
The figure represents the fit between the value proposition and the customer segment, as shown in the diagram. Explain what it means for both pieces to "fit", and reason…
The figure represents the fit between the value proposition and the customer segment, as shown in the diagram. Explain what it means for both pieces to "fit", and reason what happens to a business whose value proposition does not fit its segment.
"A good value proposition guarantees success." Argue why this is not enough: what can go wrong even if the proposition is excellent if the segment is poorly chosen or…
"A good value proposition guarantees success." Argue why this is not enough: what can go wrong even if the proposition is excellent if the segment is poorly chosen or too small, providing a fully developed example.
Channels and customer relationships
An artisanal clothing brand must choose sales channels: its own downtown store, online marketplaces, or social media sales with home delivery. Compare the advantages and…
An artisanal clothing brand must choose sales channels: its own downtown store, online marketplaces, or social media sales with home delivery. Compare the advantages and disadvantages of each channel and recommend a combination to start with.
Customer relationships can be self-service, personal assistance, or user communities. Give an example of a business (real or fictitious) for each type, and explain which…
Customer relationships can be self-service, personal assistance, or user communities. Give an example of a business (real or fictitious) for each type, and explain which type of relationship best fits a language-learning app and why.
A boutique gym (small classes with a trainer, 1 400 pesos per month) and a low-cost gym (minimal staff, 400 pesos per month) coexist in the same city. Compare the value…
A boutique gym (small classes with a trainer, 1 400 pesos per month) and a low-cost gym (minimal staff, 400 pesos per month) coexist in the same city. Compare the value proposition, segment, channels and customer relationship for each, and explain why both can be profitable at the same time.
When the fit fails: redefining the segment
Back to the beginning: the tutoring app fails with retirees because there is no fit: its proposition doesn't solve any real problem for that group, while for middle school students and their families it meets an obvious need.