Chapter 5 – How to Create Unique Value Proposition for your product?


[PreviousChapter 4 – How to Create Product Artefacts – User Personas & Customer Journey Mapping]

[Back to content page —  Product Management 101 ]

By now, you have identified several important customer needs that you can potentially address. Next step is to define, which ones of the identified customer needs will you product address.

A good product is designed with the focus on a set of important needs. Also, you wouldn’t want to unnecessary risk your time, energy and resources with a product scope that is too large.

That’s why you want to start with an initial MVP (Minimum Viable Product) so that you could test the underlying assumptions that you have made while identifying the needs you want to solve.

However, before starting off with the MVP; it is necessary to write down the Product Value Proposition. Why is that important? Read what Steve Jobs said about how to define a product –

“People think focus means saying yes to the things that you’ve to focus on. But that’s not what it means. It means, saying no to hundred of ideas that are there. You’ve to pick carefully. I’m actually proud of the things we haven’t done as the things we have done. Innovation is saying no to 1000 other things.”

First start, by writing your Unique Value Proposition (UVP). This UVP is essentially a promise of value you do to your customers, where this value is the benefits to your customer. UVP is customer center, as well as a key part of business strategy.

Value Proposition

Your value proposition should brief on following 4 questions –

  1. Who is your core customer?
  2. What need are you satisfying?
  3. What’s your solution?
  4. What makes you stand out as a product or business?

You might find the following template (by Tor Gronsund) helpful –

For (target customer), who has (customer need), (product name) is a (market category) that (one key benefit), unlike (competition),the product (unique differentiator)

Let’s go through the value prop for Airbnb and how their focus changed over-time

UVP1 —  “Find a place to stay. Rent from people in over 34,000 cities and 190 countries”

UVP2 — “Welcome home. Rent unique places to stay from local hosts in 190 countries”

The new value proposition shows how the focus of Airbnb has shifted from rental business to Travel business — with an added emphasis on building a community around travelers where “Welcome Home = Belong Anywhere”.

UVP 3 — “Book Unique Homes and experience a city like a local”

This proposition illustrates their move into providing and selling experiences apart from the homes.

To help you recognize the features/benefits for building your value proposition, we’ll use Kano Model.

Kano Model

The Kano model helps in identifying and prioritizing user satisfaction and delight.
It was developed by Professor Noriaki Kano as a theory of customer satisfaction. The model provides a methodology to categorize your product functionality by how they affect the user experience.

It starts with the goal of Customer Satisfaction. Kano model proposes a scale that goes from extreme satisfaction (also called Delight) to extreme dissatisfaction (or Frustration).

You might think that you’d always want to be at the top of the satisfaction scale? However, that’s not possible. Learning more about the functionality would answer this question –

According to the Kano model, a feature of a product (or service) can fall into following categories:

  • Delighter
  • Performance
  • Basic
  • Indifferent
  • Reverse

In the below illustration of Kano model, the y-axis is customer satisfaction and x-axis is feature implementation.

Kano Model
Basic (Must-Have)

These are the nuts and bolts functions of any product — such as numeric keypad or dialer on your phone or something as simple as “Search” or “Sort by price” feature for a grocery shopping app.
When these basics are implemented extremely well, they produce a neutral response at best. This is because these are the features that customers take for granted. However, if the basics are implemented poorly, customers become dissatisfied.
For e.g., if there is a sort by price feature in a hotel booking app, that can never be the reason that would attract users; however, if the feature doesn’t work; it’s sure to attract negative reviews.


These features have a linear effect on customer satisfaction.
The Performance features are —
– Carefully evaluated by customers while making purchase
– Increases customer’s satisfaction with better implementation.
Consider following comments — “I wish my videos would upload faster” or “I want images to render immediately on arrival.”
Example of Performance feature – storage in Dropbox account, megapixels in your phone camera.


These are unexpected features which when presented to your customer causes a positive reaction. However, it wouldn’t have any impact if not included and the customer experience isn’t in any way negatively affected.
Delighters if executed well can possibly encourage a word-of-mouth recommendation.
These unmet needs can be the game-changers of your product. Users generally wouldn’t know that they want the features until they’ve experienced themselves.
Examples of Delighters are –
“Free Shipping for Amazon Prime members,” and “native emoji keyboard.”


These are the features which don’t make any real difference in the product.


Features, if present causes user dissatisfaction.

The Natural Decay of delight

Natural Decay of Light

Now that you understand the Kano model, it’s important to take note of a basic fact — the feature categories are not static. They change over time.
What your customers feel about some product feature now is not what they’ll feel in the future. Delighters features turn into Performance or Basic Expectations as time goes by.
Consider a classic example — the fluid touchscreen interaction in iPhone that wowed everyone in 2007 is now just a basic expectation.

Applying Kano Model

Step 1 — Develop a Feature List
Step 2 — Choose your core users for testing your hypothesis
Step 3 — Develop Feature Evaluation Matrix using Kano questionnaire –

In order to understand the customer perceptions, we need to use Kano’s questionnaire. They are pair of questions which is asked for each feature –

  • How would they feel if they have the feature
  • How would they feel if they didn’t have the feature
  • The users are asked to rate their feeling as:
    – I like it
    – I expect it
    – I am neutral
    – I can tolerate it
    – I dislike it

That’s how you develop an evaluation matrix for features based on the user response –

Feature Evaluation Matrix

You’ll come up with a matrix like this which would help you classify each feature –

Step 4 — Ask the users about feature importance
You can use the following scale to rate the feature –
1 — Not at all important
2 — Somewhat Important
3 — Important
4 — Somewhat Important
5 — Extremely Important

Using the matrix in step 3 and ranks obtained for each feature, you can rank features according to their importance.

The general rule of thumb for prioritizing the features is to go after all Must-be features, then add critical Performance features and finally include a few Attractive ones that can really set your product apart.

Coming back on Defining Value Proposition & MVP, you can use Kano model as an organizing framework.

Competitive Analysis

Once, you have established the benefits and competitors, you want to go through each of the features and score each of your competitors and your own product.
You could use “Yes/No” for Basic Expectations and Delighters, and use a scale of High/Medium/Low for Performance features.

This is how a completed value proposition matrix would look like for Competitive Analysis-

Competitive Analysis of Value Proposition Credits — Dan Olsen

You could brief further on features you plan to implement in upcoming time (by adding column).

Constructing the above matrix would give you a good idea on how to define your value proposition and most important of all, how not to just create a “me-too” product.

In the next chapter, we’ll understand on how to define MVP — Minimum Viable Product

PreviousChapter 4 – How to Create Product Artefacts – User Personas & Customer Journey Mapping]

[Next: Chapter 6: How to Define your MVP]

[Back to content page —  Product Management 101 ]

LIKE & SHARE if you found this article useful.
It gives me 🔋 to write knowing people find value in it.   

Share & Help others find the resource