What is the Value Proposition Canvas?

Value Proposition Canvas

Value Proposition Canvas is a business model tool that helps ensure that a company’s product or service is positioned around customers’ values and needs. Alexander Osterwalder, Yves Pigneur, and Alan Smith created the tool. The same authors of the Business Model Canvas aimed to map the value perceived by customers.

Therefore, the primary purpose is to create a fit between the product and the market. For this to happen, the Value Proposition Canvas explores these two (out of nine) blocks from the Business Model Canvas: Customer Segment and Value Proposition more deeply.

What are the advantages of using the Value Proposition Canvas?

  • Understanding the customer, with their needs and expectations;
  • Developing a product following what your customers need and want;
  • Comparing a product you already have with the user’s need;
  • Finding your product-market fit;
  • Avoiding producing something nobody wants,
  • Saving time and money.

What is Value Proposition Canvas like?

Value Proposition Canvas

As said before, Value Proposition Canvas comprises only two blocks — Value Proposition and Customer Segment. They are the core of the business model because they focus on “What” and “To whom.” In other words, how your company delivers value to your audience.

The canvas is divided into two sides: on the right side is the Client Profile. And that is divided into Jobs-to-be-done, Pains, and Gains. On the left side is the Value Proposition, subdivided into three: Products & Services, Gain Creators, and Pain Relievers. Let’s check each one out:

Client Profile

Jobs-to-be-done

Value Proposition Canvas jobs to be done

This is about what your customer is trying to do. You must include all tasks customers are trying to perform, the problems they are trying to solve, and the needs they want to satisfy. It’s also important to note the frequency and importance of each job, all the different roles the customer has to play, and in what contexts. To fulfill this step, you may ask yourself:

  • What functional tasks is my customer trying to perform? (day-by-day tasks, problems at work, etc.)
  • What social tasks is my customer trying to accomplish? (get a promotion, gain status, have a network, etc.)
  • What emotional tasks is my customer trying to complete? (get in shape, feel good, feel motivated, etc.).
  • What basic needs do they need/want to have satisfied? (communication, sex, hygiene, etc.).

Pains

Value Proposition Canvas Pains

This one encompasses everything that annoys your customer while they are performing their jobs-to-be-done, such as negative experiences and emotions, challenges, risks involved, financial costs, mistakes, consequences, etc. Remember to classify each pain as severe or light and note how often it takes place. To complete this step, you can ask some questions:

  • What is expensive for my customer? (regarding time, cost, effort, etc.)
  • What makes my customer feel bad? (frustrations, disappointments, failures, physical pain, etc.)
  • What are the main difficulties and challenges that my customer faces? (physical, intellectual, or emotional limitations to do something, resistance, understanding specific situations, etc.)
  • How are current solutions leaving to be desired for my customer? (bad performance, much effort, lack of functionality, defects, etc.)
  • What are the negative consequences for my customer? (losses of power, status, money, time, trust, etc.)
  • What risks is my customer afraid of? (financial, social, technical, etc.)
  • What is keeping my customer awake at night? (concerns, challenges, debts, bad health, etc.)
  • What are the most common mistakes my customer makes? (creating expectations, misunderstandings, errors in use, etc.)
  • What is preventing my customer from adopting solutions? (investment, learning curve, resistance to changes, etc.)

Gains

Value Proposition Canvas Gains

They are all the benefits your customer expects or wishes — or even something that would surprise them positively —, whether functional, emotional, social, or financial. In short, everything that delights them and makes their life easier, more joyful, or more successful. You may rank each gain by relevance and indicate the frequency of them. To do so, you can follow some questions, such as:

  • What kinds of savings would make my customer happy? (time, money, energy, etc.)
  • What results do my customer expect? Which ones can mesmerize them? (quality level, profits and gains, savings and improvements, etc.)
  • What current solutions enchant my customer? (functionalities, performance, quality, etc.)
  • What can make my customer’s tasks easier? (lower learning curve, more services, lower costs, etc.)
  • What positive consequences do my customers want? (power, status, acknowledgment, satisfaction, motivation, etc.)
  • What is my customer looking for? (design, guarantees, specific features, functionality, etc.)
  • How does my customer measure success and failure? (cost, performance, speed, quality, beauty, likes on social networks, etc.)
  • What would increase my customer’s chances of adopting a solution? (lower investment, longer guarantee, better performance/quality/design, etc.)

It’s worth remembering that you must create one profile for each customer segment. After mapping your customers’ profiles, the next step is to set what value they are going to perceive with your product or service.

Value Proposition

Products & Services

Value Proposition Canvas Products and Services

Include all the products and services you are going to deliver. About each one, ask yourself:

  • Can the product/service help to accomplish any job-to-be-done, whether functional, social, emotional, needs, wishes, roles, etc.?
  • Is the product/service tangible, digital/virtual, or financial?
  • Is the product/service crucial or trivial? How relevant is it?
  • How often does my customer use the product/service?

Gain Creators

Value Proposition Canvas Gains Creators

Involve how the product/service offers the customer added value, what benefits your product brings, and if your customer’s wishes and expectations are reached. After all, how it makes your customer happier. Again, you should rank every gain your product or service creates according to relevance to your customers (if substantial or insignificant) and indicate how often it occurs. To do that, ask if your product/service:

  • creates savings that make your customer happy (in terms of time, money, effort, etc.);
  • produces results that your customer expects or that go beyond their expectations (better level of quality, more of something, less of another);
  • copies or does better than current offerings that delight your customer (in relation to specific functionalities, performance, quality, etc.);
  • makes your customer’s tasks or life easier (lower learning curve, better usability, accessibility, more built-in services, lower cost of ownership, etc.);
  • creates positive social consequences desired by your customer (make it look good on tape, produce or increase power, status, etc.);
  • does/has something the customer is looking for (good design, specific or better functionalities, etc.);
  • meets customers dreams (help on large goals, produce great relief, etc.);
  • produces positive results that match criteria of success or failure (better performance, lower cost, etc.);
  • makes adoption easier (reduce cost, lower investment, lower risk, higher quality, performance, or design, etc.).

Pain Relievers

Value Proposition Canvas Pain Relievers

Describe how your product/service relieves the customer’s pains. Identify if you reduce their costs, negative feelings, efforts, risks, negative consequences, mistakes… Anyway, how you make your customer feel and sleep better. It’s also essential to rank each pain according to its intensity to be able to understand how deeply your product/service helps your customer. To help you out, ask if your product/service:

  • produces savings (in terms of time, money, effort, etc.);
  • makes your customer feel better (they end up with frustrations, discomforts, things that give headaches, etc.);
  • performance solutions (new features, better performance, better quality, etc.);
  • puts an end to the difficulties and challenges your customer faces (make things easier, help accomplish tasks, eliminate resistance, etc.);
  • eliminates social consequences that your customer encounters or is afraid of (losses of respect, admiration, power, confidence, status, etc.);
  • eliminates risks that your customer is afraid of (financial, social, technical risks, or anything else that can go very wrong);
  • helps your customer sleep better at night (help with major problems, reduce worries, etc.);
  • limits or eradicates common mistakes that your customer makes (errors of use, difficulties of use, etc.)
  • eliminates barriers that prevent your customer from adopting new solutions.

When to use Value Proposition Canvas?

Value Proposition Canvas Customer Segment and Value Offer Fit

In other words, this tool facilitates putting yourself in your customer’s shoes and understanding their world. The final goal, as mentioned above, is to discover your Product Market fit by positioning products/services according to your targeted customer’s necessities, expectations, and interests.

With Value Proposition Canvas, you have an overview of how your value proposition is going to impact your customer’s life. The product-market fit is achieved when the products and services match most of the customer profile’s essential gains and pains. Usually, the Value Proposition Canvas works properly:

  • At the beginning of a startup;
  • To restructure the sales process, in order to understand the customers better;
  • To add a new feature to a product, that may demand great investments, whether of time or resources (or even both);
  • To expand into a new market or customer segment, you need to know how these new customers will receive your product/service.

It’s worth remembering that fulfilling this canvas is only the first stage. It’s essential to validate the hypothesis by taking tests and getting feedback, which can help go back to the canvas and refine it. This is also important to highlight that the Value Proposition Canvas does not substitute the Business Model Canvas — they work better combined, meaning one does not exclude the other.

Value Proposition Canvas Example

Let’s explore an example using a fitness app to understand the Value Proposition Canvas in action. This example will showcase how the two parts of the canvas—the Customer Profile and the Value Map — align to create a clear value proposition.

  1. Customer Profile: The Customer Profile focuses on understanding the target user’s Jobs, Pains, and Gains.
  • Customer Jobs: These are tasks the customer wants to accomplish and/or achieve. For a fitness app user, jobs could include tracking workouts, watching their weight, managing diet plans, and achieving fitness goals.
  • Customer Pains: These are frustrations or challenges the customer faces while trying to accomplish their jobs. Common pains might include lack of time for workouts, difficulty sticking to a diet, or not knowing which exercises are most effective.
  • Customer Gains: These are the benefits or results that the customer wants. Gains for a fitness app user could include improving health, gaining muscle, losing weight, or enjoying the convenience of tracking progress easily.
  1. Value Map: The Value Map outlines how or the way the product or service addresses the customer’s needs with Products and Services, Pain Relievers, and Gain Creators.
  • Products and Services: For this fitness app, the core offerings might include workout tracking features, personalized meal plans, and exercise tutorials/content;
  • Pain Relievers: These features help reduce or eliminate the customer’s frustrations. For example, the app could offer quick, time-efficient workout sets or sessions, motivational reminders, or expert advice on overcoming diet challenges;
  • Gain Creators: These are the features that amplify the positive outcomes for the customer. The app could provide customized workout plans based on user preferences, progress tracking that shows visible results, and rewards for reaching fitness milestones.

Alignment of the Value Proposition

In this example, the fitness app successfully aligns with the customer profile by addressing the user’s jobs (fitness tracking), relieving pains (lack of time and motivation), and creating gains (improved health and convenience). This alignment results in a strong value proposition design that appeals directly to the needs and desires of the target audience.

Check out our Premium Value-Proposition PowerPoint Template:

Value Proposition Canvas Template Powerpoint

Check it out by clicking here.

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