What makes a customer choose time and time again to buy a particular product over several others that have literally the same function as the preferred “one”? While many factors contribute to this decision, any seasoned businessperson would guess right that the leading factor is the value the user derives from the product.
To simplify things, product value is basically the benefit(s) customers get from using your product/service or the worth customers attach to your product/service. Value proposition, on the other hand, is a statement (mostly a one-liner) that describes the use, features, and differentiators of a product and how they solve customers’ pain points. In essence, value proposition articulates what customers will get from using your product.
For many entrepreneurs who think having a lower price, running constant sales, and giving enticing discounts are the major drivers of sales, they’ve come to find out the reverse is true. Yes, a lower price might cause a surge in sales, but it is temporary, and bonuses are best used tactically at any of the product lifecycle levels.
Value and not cost is what will keep propelling users towards seeking your product. Also, since customers’ needs and market situations continually evolve due to changes in the product lifecycle, businesses too need to constantly revisit their value proposition to meet current market needs.
Value Proposition Across the Product Lifecycle: What Matters Most to Customers at Each Stage
The development stage can be aptly described as the research phase where a product is yet to be launched to the full marketplace. At this point, the company is still developing prototypes, testing product effectiveness, bringing in investors, and strategizing their launch. Also, companies are expending a lot of resources and money without gaining any revenue since the product is not yet available for sale. Therefore, in the development stage, there is no value proposition you can craft for the customer per se. The best thing to do at this junction is to start generating buzz for your product and brand by securing endorsement deals from influencers or established persons in your industry. In addition, it would help increase your brand awareness if you could release at this stage some favorable consumer testimonials or research from your product trials or tests.
The introduction stage of the product lifecycle is when you finally released your product to the market, and you’re striving for it to be accepted by your targeted audience. At this stage, consumers are probably meeting the need you want to serve with an existing product. So, it will take some time before they shift to yours, and consequently, sales are low, and so are your profit margins. Likewise, since production is limited and the business is incurring huge expenses on various sales promotions and advertising, there is need to create quick primary demand. For this reason, the value proposition at the introductory stage is aimed at enticing customers to try out the product and generate fast sales turnover.
Value proposition for the introduction stage
- Offer customers a smoother and easier experience when using your product or service than existing businesses.
- Provide unique features that satisfy consumers’ pain points better than current offers in the market.
- Give attractive bonuses as an introductory gift to draw in more early adopters.
- Encourage reluctant customers to try your product using full or partial “money back” guarantee.
- Offer dealers generous discounts to encourage bulk purchases.
In the third stage, the future doesn’t look so bleak for your product anymore. Sales are finally picking up but unfortunately, so are the number of rival products. Hence, despite sales growing rapidly, you may still require to increase market share, sales turnover and enter new markets due to high promotional expenditure and ever-increasing competition. So, since consumers consider high quality a given at this point, what value proposition would put you at the front of mind of the market?
Value proposition for the growth stage
- Keep building a quality brand image (customers would be proud to associate with) through advertising, publicity, and positive online reviews.
- If you have a cause that’s close to your heart or you’re already supporting, you could let your company also donate to this cause and let customers know how their sales are making a positive change to this good cause.
- Besides donations of cash or material resources to this cause, you can use your business platform to raise awareness for this program.
- Introduce new versions of the product to satisfy the different requirements of your growing customer base.
- Fine-tune and improve your customer service based on customers and market feedback.
- Strengthen and widen distribution channels to make your product easily and quickly available to users.
The saturation/maturity stage is a tough phase to be for many businesses. Competitive pressures are likely astronomically high if the sector is lucrative and the growth rate begins the dreaded downward plunge. However, there are many creative value propositions you can utilize to differentiate your current offering and still come out ahead in this phase.
Value proposition for the saturation/maturity stage
- If your brand is all about providing an affordable and quality fix that won’t break the bank for customers, show this clear and big in your key value proposition.
- Do you design your premium product to be both extremely functional, comfortable/or easy to use and attractive? Don’t bury this deep inside a bucket load of marketing jargon. Instead, make it top of your message.
- Or is your core proposition making a high-quality and sustainable product that balances both form and function? Share this with your beloved audience in your value proposition.
- Do you deliver your products or service faster or better in some way than rival products? Why not make this into your value proposition.
- Don’t forget to build on your brand image like never before at this stage because no one wants to associate with a dying or a perceived weak brand.
The end is near at this point since there are fewer repeat orders and an equally lower number of new customers. You’ve possibly reduced production at this level and are considering whether to discontinue the product. Should you decide to continue production and this decision should be backed by solid market research, here are some value propositions you may find helpful to push sales and generate new customers.
Value proposition for the decline stage
- Let’s say you provide a service that makes it much easier for consumers in your niche to perform a task, and you have the numbers to show for it; tell this in your value proposition. Attract more repeat sales by reassuring existing customers and potential users that you and you alone are still the best at what you do.
- Is your product simple to use and still delivers the most impressive outcome? How about crafting this into a value proposition. As much as the market wants a sophisticated and jaw-dropping result, no one wants the process of achieving that to be complicated and tedious. Simplicity sells, so make that your competitive advantage if you have it.
- If your product gives a faster result like no other or your service saves users time as well as being efficient, that’s a two-in-one advantage to make you shine brighter in the marketplace.
- Are you the pioneer, innovator, and trailblazer that’s still setting records in your sector? Let customers know that. Everyone wants to associate with the winning side
This Article is part of our Product Life Cycle Series
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