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POC vs. POV: What’s the Difference?

POC and POV are vital for the success of new business offerings. Learn the key differences between POC vs. POV so you know when to use each.

Before starting a business, you must determine whether your idea is possible. For example, is there a demand for your product or service, and does your product or service benefit customers? You can answer these questions using proof of concept (POC) and proof of value (POV).

Before you develop a product or service and begin marketing it, you must ensure you have an offering to help your business grow and thrive. After determining the POC and POV, you can implement a sales process and marketing strategy to help you sell more.

While POC and POV sound like similar sales concepts, they're used in distinct ways. Each has its purpose, but not every business needs to identify both. So what's the difference between POC vs. POV?

Keep reading to learn the definitions of proof of concept and proof of value and enhance your pre-sales process.

What is proof of concept (POC)?

Proof of concept (POC) is a method used to prove whether a business idea is feasible. To determine POC, you must have set success criteria that answer the question, "Does it function correctly?"

You can use POC to determine the price of your products or whether to launch a new service. The proof of concept can support the pre-sales process and help you gauge whether your offering is a good product-market fit and whether it can be successful, showing how well a product or service works.

Proof of concept is usually identified using a pilot project in a more controlled environment to prove that a product works. For instance, if you create a dishwasher, you must prove it washes dishes.

Proof of concept is a crucial part of the product life cycle. It can help you develop all types of products by determining their viability and ensuring you create a product that works.

This concept can improve your sales cycle because it helps business owners understand whether there's a market for their product or service and whether a product actually works. Additionally, proof of concept can support investors in determining if a business idea is possible while giving teams feedback about the market and providing the foundation for product development.

What is proof of value (POV)?

Before you market a product, you should identify proof of value (POV). The POV meaning in business determines the benefits of a particular product or service for customers or the company. Again, setting success criteria is crucial for helping you understand the measurable value of a product and if it solves customer pain points.

Ultimately, what value or benefit does the product or service offer? POV shows how your products and services address pain points or solve problems and the types of benefits customers can expect.

A successful POV can help you describe with evidence how specific products and services offer value to customers. Proof of value can also help you determine better product growth strategies, such as pricing changes and evidence points to convince prospective clients to purchase. Additionally, you can use your POV to craft a value proposition based on customer feedback and data to demonstrate how your product or service is beneficial.

Proof of value allows you to validate your product and can be used to determine if it's worth continuing to develop it. Stakeholders, investors, and other decision-makers use POV to decide if a new product is worth the investment, identify its benefits, predict the return on investment (ROI), and understand how it will benefit the company.

This stage of the process can also help identify issues from feedback and correct them while saving the business money because it addresses those problems promptly. For example, determining proof of value usually requires input and research from clients or users to develop use cases to ensure the product benefits the customers and, in turn, the business.

Stakeholders and business owners must know a product is worth it financially, and that's where POV comes into play. While POC demonstrates that a product works, POV demonstrates that it's worth the investment and something a prospective customer will purchase.

Key differences between POV vs. POC

Understanding POC vs. POV can be complex; many business owners, marketers, and sales professionals use them interchangeably. However, they represent two different business-related concepts and processes.

The definition of proof of concept is to prove a product's viability in the market. Does it do what it says it does? For instance, it might establish a market for a particular product and determine its functionality. Conversely, POV takes it a step further and identifies the value of a particular offering to customers and the company, helping businesses decide whether it's worth investing in the product.

Both POC and POV prove something about the business or product idea, but they prove two different things. Consider this: A business seeks an investor for capital to grow its inventory. In this case, investors might consider POV and POC as critical elements to help them decide whether or not to invest in the business.

They'll want to know that a company can demonstrate proof of value before giving them capital. POV can determine whether it's worthwhile to invest in a new product. Product development, marketing, and sales cost money; if your product doesn't provide meaningful value to the company, it's ultimately not worth it.

On the other hand, other investors may invest in startups and expect their seed capital to help the business owner provide POC. This usually occurs when the business owner has an idea but doesn't have the funds to prove it's viable. Instead, they'll use the seed money to create the product to determine whether it functions correctly.

Meanwhile, a business will determine POV to ensure there's a customer base for their new products and ensure that the product not only works but provides value. For example, a company that sells software will determine its product's viability and identify specific consumer benefits that make them stand out from the competition.

Simply put, proof of concept focuses on whether the product works, while proof of value determines how valuable it is for clients once you know it functions as it should.

For example, consider an EV company. An EV company's POC might be a car that can be charged at any EV charging port. Its POV is the benefits of the EV to customers, such as the fact the EV is cheaper than others and can help them save on maintenance costs.

Proof of value vs. proof of concept: Which one should you use?

Whether you use POC or POV depends on your overall business objectives. Companies may benefit from using both to determine if a product is viable in a specific market and, if so, what benefits there are for the customers. Ultimately, why should their clients purchase their product?

Other companies don't need both and will have to decide whether POC or POV can help them reach their business objectives. POC is best for proving a theory, such as whether a new product will work in a particular market. This usually occurs before product development to prove whether creating a product or service is feasible. POC is more qualitative than POV and can help you determine whether or not you should continue spending money on a particular offering.

Proof of value is usually for businesses that must prove the anticipated value of a product. It's quantifiable and can help you determine customer pain points and how your offering is a solution to these issues.

In most cases, deciding between POC vs. POV depends on the product and its customers. Since your goal is to close sales, you must consider not only the features and function of the product but how the product benefits those who use it.

POC and POV require success criteria to answer your questions, but they should have very different answers. For example, POC is a tool for closing sales and securing funding from an investor. Conversely, POV is less intensive and faster because it focuses on showing value instead of concept.

That said, companies still use these terms interchangeably, and that's not exactly inaccurate. Most POC and POV models include aspects of one another to demonstrate a product's viability in a market. After all, you can only determine whether a product will succeed by first providing proof of concept and then establishing proof of value. Both concepts can help you satisfy customers and improve marketing and sales efforts.

Choosing the best approach for your business

Proof of concept and proof of value are two key ways to measure the feasibility of a business idea or project and ensure the desired business outcomes. Only some companies need to use both, but choosing the correct option based on your objectives and target market is crucial for developing products and services guaranteed to sell. Whether you use POC or POV, you can help your business succeed by determining if a new idea will work and is worth the effort.

After determining POC or POV, the next step is to start selling. Mailchimp makes it easy to market everything you've learned from your analysis to the right customers at the right time. Sign up for Mailchimp today to take advantage of our automation tools and increase your ROI.

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