Value Proposition Canvas
Value Proposition Canvas is a very simple model but extremely useful. It consists of 2 parts: Value Proposition and Customer Profile.
In each of these parts, we will find 3 elements.
The Value Proposition consists of the following:
- Gain Creators
- Pain Relievers
- Products & Services
In the Customer Profile, we distinguish:
- Customer Jobs
The Value Proposition Canvas is the third stage of the Strategy Phase. In the first one, we performed a customer segmentation.
Then we used Persona and Proto-Persona to "bring to life" the customers purchasing our products and services.
Now the time has come to offer each customer segment something specific that no one else in the market offers. For this, we will use the Value Proposition Canvas.
For the sake of discussion, I will add that the Business Model Canvas, of which the value proposition is a crucial part, is an equally useful and popular tool.
Value Proposition Canvas - a model based on dependency
There is a method for finding Value Proposition Design.
All you have to do is find the relationship between:
- Gain Creators and Gains
- Pain Relievers and Pains
- Products & Services and Customer Jobs.
It sounds abstract, but it is not. Designing a Value Proposition is based on an analysis of particular issues.
What is a product, a digital service?
It is more than a collection of functions, more than a helpful tool used to achieve goals.
These are their basic characteristics, but it is only from these that the value proposition is to be derived. A value that allows you to see the difference between product X and Y, service A and B.
Customer Jobs, what products and services are for
Products and services are created to solve problems and meet needs. Using and performing tasks with their help is supposed to lead to gains.
Such as financial, emotional, material, and organizational gains. That are measurable, quantifiable, and tangible.
Products and services solve problems, but they do it in different ways. Faster, slower, cheaper, more expensive, more efficient, less efficient, safer, with more risks.
They are a remedy for Pains, a problem, a need, discomfort, a dream, but they are also a source of pain.
Therefore, we often buy them or choose others. The value proposition helps us tremendously with it.
Pains or how to know what Gains the product or service provides?
From the analysis of the Pains mentioned above that the customer feels and their reduction that the product or service is supposed to cause, it appears that if the source of Pain is the cost, then the product should reduce it.
For example, reduce it by 10%, 20%, etc. This is a concrete Gain. Savings. Saving is not only a financial benefit but also an emotional one.
It provides a sense of security. It increases the sense of freedom, which can express itself in the desire to invest.
Gain Creators in the Value Proposition Canvas
The Value Proposition Canvas makes us realize that there may be more Gains than we think. It is necessary to discover all of them, list them, and put them in order, guided by the criteria of their importance.
Despite appearances, and we have examples and evidence of this, the most obvious ones do not always turn out to be the most effective, especially when they are typical and replicated by competing companies.
Gain Creators are about finding the "painkiller" most attractive to a given Customer Profile.
However, it is best to find several of them, so you can see which one is the most effective. "Painkillers" should also be compared to competitive proposals. Identify their strengths and weaknesses.
Each value proposition has strengths and weaknesses, so it is always useful to think of it as a collection rather than a single proposition.
Value Proposition Canvas - a model that prevents complacency
However, what is most important when using the Value Proposition Canvas, is that you should get rid of your own expectations for products and services. They are supposed to help particular groups of customers.
We have to consider the opinion of customers, the specifics of their needs, and their idea of a useful, functional, convenient digital product that offers "something more."
The core of this model is the confrontation of "what we think works for customers" with "what can actually work for customers."
A value proposition is a unique characteristic of an offer, product, or service, but at the same time, it is obvious enough for customers to expect it.
The most popular features used in the design of the Value Proposition in the VPC model
An effective, A/B-tested Value Proposition can be found in a few typical features that are particularly sought after, liked, and appreciated by customers:
- Uniqueness - a feature of precursor products and services
- Novelty - a feature indicating either a development (e.g., a new version) or a new need, previously unmet, unconscious
- Effectiveness - refers to the efficiency with which a product or service allows you to perform a task, achieve a goal
- Optimality - shows the level of adaptation to needs and problems
- Individuality - determines the uniqueness of the owner, user
- Rank, status, hierarchy - indicates the social effects of gains (e.g., prestige, opportunity to join a group)
- Identity - indicates the customer's self-esteem and self-awareness.