Value Proposition Canvas is a business model tool that helps you make sure that a company’s product or service is positioned around customers’ values and needs. The tool has been created by Alexander Osterwalder, Yves Pigneur, and Alan Smith. The same authors of the Business Model Canvas, aiming to map the value perceived by customers. The primary purpose is, therefore, to create a fit between the product and market. For this to happen, the Value Proposition Canvas explores more deeply these two (out of the nine) blocks from the Business Model Canvas: Customer Segment and Value Proposition.
Contents
As said before, Value Proposition Canvas is made up of 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, it’s the Client Profile. And that is divided into Jobs-to-be-done, Pains, and Gains. On the left side, it’s the Value Proposition, also subdivided into three: Products & Services, Gain Creators, and Pain Relievers. Let’s check each one out:
This is about what your customer is trying to do. You have to 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 down the frequency and the importance of each job, and all the different roles the customer have to play, and in what contexts. To fulfill this step, you may ask yourself:
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, and consequences, etc. Remember to classify each pain as severe or light and note down how often it takes place as well. To complete this step, you can make some questions:
They are all the benefits your customer expects or wishes – or even something that would surprise them positively –, whether they are functional, emotional, social or financial. In short, everything that delight them and make 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:
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.
Include all the products and services you are going to deliver. About each one, ask yourself:
Involve how the product/service offers the customer added value, what are the 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:
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 important, also, to rank each pain, according to its intensity, to be able to understand how deeply your product/service help your customer. To help you out, ask if your product/service:
In few words, this tool comes to facilitate the job of putting yourself in your customers’ shoes and understanding their world. The final goal, as mentioned above, is to discover your Product Market Fit, through positioning products/services according to the necessities, expectations, and interests of your targeted customer. 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 the most important gains and pains of the customer profile. Usually, the Value Proposition Canvas works properly:
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. That can help go back to the canvas and refine it. And, it is also important to highlight that the Value Proposition Canvas does not substitute the Business Model Canvas. They work better combined. One does not exclude the other.
Check it out by clicking here.
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I find this platform so creative and clear on how to do this bussines templates