How to formulate a proper insight hypothesis and product value proposition

Jul 5, 2022


Most product launches still fail to meet their business targets. The good news is that digitalisation and AI make it possible for all product teams to run product innovation in an iterative test-and-learn manner. However, all the work around a new product is meaningless unless teams use solid frameworks. What you put in, is what you get out. Formulating proper insight hypotheses and value propositions is a cornerstone of successful product innovation. So, how do you get started?

Address large enough consumer aims and pains

Great product value propositions address large enough consumer aims and pains. When using products, consumers always have a value creation aim. In other words, consumers are after some type of value creation (pleasure-seeking, experiential, symbolic, functional, financial) so that they will be ‘better off’ in a specific socio-cultural context and situation.

Almost always, consumers feel the pain with their value creation aim. In other words, they face obstacles and therefore need help from new products that will help them get the value they are after. As late Harvard Professor Christensen smartly put it, consumers have a job-to-be-done for new value propositions: “When we buy a product, we essentially 'hire' something to get a job done.” 

Match your product value proposition with other consumer resources 

Consumers are resource integrators. This means they choose to use products that match their other resources so that they can create more value for themselves. The consumer resources you need to acknowledge when designing new product value propositions are knowledge and skills​, physical capabilities​, money​, time and space available, as well as the other brands and products being used simultaneously with the new product value proposition.

Articulate your insight hypothesis as a concrete narrative

When you have identified a certain consumer's aim and pain, put it all into a logical story. In other words, articulate the consumer’s aim and pain as a narrative​. Here are some tips on how to do it:

  • You speak with a consumer's voice: “I .., we...”​  
  • You want to be very concrete and clear. 
  • You want the story to mimic how customers look at the situation themselves  

As an outcome, your product development team will have a common goal: which consumer problems it is solving. As importantly, consumer respondents can evaluate if your insight hypothesis is true to them or not. This is the only way how you can make sure your product value proposition will address true and large enough consumer aims and pains.

Formulate a product value proposition addressing the consumer's aim and pain

You continue ideating and formulating alternative product value propositions that address the consumer's aim and pain. You articulate your product value proposition(s) as a narrative:

  • What the product is about
  • What value it will provide and how  
  • Why consumers should believe you 
  • ​Include brand name and price when you can 

When formulating the product value proposition, try to evoke consumer imagination: what it feels like to use the product, taste the food, feel the product on the skin…​ We know from the academia, that the closer the value proposition is to reality, the more reliably concept testing will forecast launch performance.​ However, be careful with pictures. If the product pictures are very preliminary, they can mislead the consumer.​ Pictures tell more than a thousand words!


Demonstration of a proper insight hypothesis, case wearables

Let's take a concrete example in the wearables business context. This company has recognised a growth opportunity in helping consumers take better care of their wellbeing.​ It is aware of the growing popularity of wearables in tracking wellbeing and performance and is investigating whether it should enter the category and how.​ The development team has discovered needs and challenges in relation to sleep and wellbeing​.

They have come up with the following insight hypothesis:

I don’t feel as energetic and fresh as I wish. I want to feel and look better. ​(CONSUMER AIM) 

I know that my sleep isn’t good enough. I am willing to put any effort into improving it. However, I don’t want to start using a tracking device that doesn’t match my style​. (CONSUMER PAIN)

By formulating an insight narrative around the consumer's aim and pain, the product development team has identified a clear job-to-be-done: “Something” that helps a consumer to improve the quality of sleep and eventually look and feel better without compromising the consumer’s style.​

The team has also investigated consumer resources. They found out that consumers have limited mental energy and therefore they are not willing to put much effort into fixing the pain point of bad sleep by setting requirements for potential product value propositions. The team still has some questions, such as: Are consumers willing to wear something during the day or just something that monitors sleep only?​ What kind of solution would fit with their identity?​

Demonstration of a proper product value proposition, case wearables

The team continued working with alternative product value propositions that address the consumer's aim and pain but from completely different angles.

Product value proposition A: Jewellery item

This smart ring looks as elegant as any jewellery and is comfortable to wear 24/7. It measures your sleep quality and informs you in the morning how well you slept and how should you spend the coming day – should you do hard core training or have a more relaxed day.

This ring is available in several designs. You can easily order your ring online from our web shop anytime. When you order, we provide a free fitting ring first, so we can deliver you the right size.​

Available in the following designs:​ Gold, silver, black​

Product value proposition B: Sleep tracker

Sleep tracker can be easily worn on your arm or leg before going to sleep. It measures your sleep quality and informs you in the morning how well you slept and how should you spend the coming day – should you do hard core training or have a more relaxed day.

Comfortable to wear, the sleep tracker is made of soft materials that do not cause discomfort while sleeping. Equipped with a dark screen and muted sounds, the sleep tracker makes sure you sleep without disturbance.​

Available in the following designs:​ 

  • Material: Soft silicone​ 
  • Colours: Black, dark blue, white​

Screenshot_5_7_22__11_19Author: Oura Ring

Key learnings, case wearables

By formulating a proper insight hypothesis around consumers' aims and pains, and by articulating a concrete product value proposition, this company was able to test insight hypothesis and product value propositions fast and easily and learn how to iterate them. Below you can find some key learnings from the 1st testing round:

  • Insight hypothesis: Both the consumer's aim and pain are true to the majority of the target group. In other words, the market potential is high and there is plenty of room for different types of wearables value propositions.​ 
  • Jewellery like Smart Ring Value Proposition: shows the highest business potential. It is the most unique offering with a strong fan base among “fashion enthusiasts”. Even new types of ring value propositions could meet the desires of a wider target audience.​  
  • Sleep Tracker Value proposition: shows promise. However, iteration is recommended.​ The target group is likely to be more niche with consumers with more severe sleeping problems. 

We encourage every team to put enough effort into proper insight hypothesis and value propositions as it pays off in more meaningful and beloved products, as well as happier teams and consumers! 

 Authors: Dr Heli Holttinen and Dr Apramey Dube


Want to learn more? Watch our webinar on How to run Modern Product Concept Testing with more detailed tips and insights.