Value Proposition

A Value Proposition is the explanation of the value that your business brings to its customers. It solves customer problems and satisfies customer needs. It is the reason why customers turn to your company over another.

Value Proposition Canvas

What is a Value Proposition Canvas? https://youtu.be/ReM1uqmVfP0 (view time: 3:12)

Download the Value Proposition Canvas (VPC) here.

The Value Proposition Canvas (VPC) has two sides:

1. Customer Segment Profile: you clarify your customer understanding by describing a specific customer segment in your business model in a more structured and detailed way. It breaks the customer down into the customer’s jobs, pains, and gains.
2. Value Proposition Map: you describe how you intend to create value for that customer by describing the features of a specific Value Proposition in your business model in a more structured and detailed way. It breaks your Value Proposition down into products and services, pain relievers, and gain creators.

Have you ever heard the phrase “product-market fit”?

You achieve product-market fit when these two sides are aligned.

Customer Segment Profile

• Customer Jobs: describe what customers are trying to get done in their work and in their lives, as expressed in their own words. Distinguish between (read more):
  • Functional jobs: when customers try to perform or complete a specific task or solve a specific problem. E.g., mow the lawn, eat healthy
  • Social jobs: these jobs describe how customers want to be perceived by others. E.g., to look trendy, gain power or status
  • Personal/emotional jobs: when customers seek a specific emotional state, such as feeling good or secure. E.g., seeking peace of mind regarding your investments
  • Supporting jobs: besides trying to get a core job done, your customer performs ancillary jobs in different roles. These can be divided into three categories:
    • Buyer
    • Co-creator
    • Transferrer
• Customer Pains: describe anything that annoys your customers before, during, and after trying to get a job done or simply prevents them from getting a job done (read more)
  • Undesired outcomes, problems, and characteristics
  • Obstacles
  • Risks
• Customer Gains: describe the outcome and benefits your customers want. Gains include functional utility, social gains, positive emotions, cost savings, etc. (read more)
  • Required gains
  • Expected gains
  • Desired gains
  • Unexpected gains

Rank customer jobs, pains, and gains according to your customer’s priorities. This will help you design a value proposition that addresses things that really matter to your customers.

When mapping your Customer Segment Profile:

• Make a Value Proposition Canvas for every customer segment. Do not mix several customer segments into one profile
• Do not forget about your customer’s social and emotional jobs
• Do not list jobs, pains, and gains with your value proposition in mind. Proceed like an anthropologist and “forget” what you are offering
• Describe jobs, pains, and gains as concretely as possible
  • For example, if a customer says “waiting in line was a waste of time”, ask after how many minutes it began to feel like wasted time. Then, you know that a customer pain is “wasting more than x minutes standing in line”

Value Proposition Map

• Products and Services: a list of what you offer. Think of it as all of the items your customers can see in your shop window–metaphorically speaking. Is likely to include (read more):
  • Physical/tangible: goods, such as manufactured products
  • Intangible: products such as copyrights or services such as after-sales assistance
  • Digital: products such as music downloads or services such as online recommendations
  • Financial: products such as investment funds and insurance or services such as the financing of a purchase
• Pain Relievers: describe how exactly your products and services alleviate specific customer pains. They explicitly outline how you intend to eliminate or reduce some of the things that annoy your customers before, during, or after they are trying to complete a job. (read more)
  • For example: does your product or service produce savings or time, money, or effort? Fix underperforming solutions by introducing new features? Etc.
• Gain Creators:describe how your products and services create customer gains. They explicitly outline how you intend to produce outcomes and benefits that your customer expects, desires, or would be surprised by, including functional utility, social gains, positive emotions, and cost savings. (read more)
  • For example: does your product or service make your customers’ work or life easier via better usability or accessibility? Do something specific that customers are looking for in terms of good design or guarantees? Etc.

When mapping your Value Proposition Map:

• List your products and service that create value for the specific customer segment you’re mapping — do not list all of your products and services
• Do not add products and services to the Pain reliever and Gain Creator boxes.
• Pain Relievers and Gain Creators are explanations or characteristics that make the value creation, such as “helps save time” or “well-designed”
• Do not try to address all customer pains and gains. Great Value Propositions often focus only on a few pains that they alleviate extremely well.

What’s the difference between the two canvases?

The Business Model Canvas helps you create value for your business.

The Value Proposition Canvas helps you create value for your customer.

Assignment

(1) Complete a VPC for your startup, and be prepared to discuss in our live session. Please also email it to me so I can give more in-depth feedback.