The Value Proposition Canvas

How to Create Fit Between Your Value Proposition and Your Customer Needs

How will you turn your idea for a new service or product into reality without burning money and losing time? Let's see what The Value Proposition Canvas can do for your business. 

The Value Proposition Canvas, created by Alex Osterwalder and Yves Pigneur, forms the heart of Strategyzer's book Value Proposition Design.

 

What's a Value Proposition Canvas? 

A Value Proposition Canvas is a visual map of how your product or service creates value for your target customers. It's a one-page document that allows you to explain your idea in plain language.

Building something nobody wants is the number one cause of failure in business. With this tool, you will assess your idea on how it creates real value for your customers and discover any breaches with your products and services.

  

Plug-in for the Business Model Canvas

The Value Proposition Canvas helps make your business more successful. It makes it easier to talk about your ideas and plan for the future. It would help if you used the Value Proposition Canvas with the Business Model Canvas and Business Environment Map because they integrate seamlessly together.


The Business Model Canvas helps you create value for your business, while the Value Proposition Canvas helps create value for your customer. The Business Environment Map enables you to understand the context in which you make this value.

The Value Proposition Canvas zooms in on two of the Business Model Canvas building blocks: the Value Proposition and the Customer Segments.

 

Two Sides of the Value Proposition Canvas

The Value Proposition Canvas has two sides. With the Customer Proļ¬le, you map out your understanding of your customer segment. With the Value Map, you explain how you create desirable value propositions for that customer segment. You achieve fit between these two sides when your customer is thrilled about your value proposition. Start with the Customer Profile.

 

Customer Profile: Understand Your Customer 

With the Customer Profile, you describe the customer segment of your business model in much more detail. This profile reveals your customer into three parts: jobs, pains, and gains.

 

Customer Jobs

The jobs are all the things that your customers are trying to get done. This could be a task they need to accomplish, needs they want to satisfy, or problems they have to solve.

Step into your customer's shoes when you want to find your customers' jobs trying to get done.

You'll find out that there are three main types of customer jobs to be done. Firstly, the functional jobs, where customers need to complete a specific task. This is an obvious job. 

More interesting are the social and emotional jobs. You describe how your customer wants to be perceived by others and how your customer emotionally feels about getting a job done.

 

Customer Pains 

The pains are the things that hold your customer back from fulfilling a  job. Before, during, and after trying to get a job done, your customer encounters challenges. This could be anything that prevents them from getting a job done, like an undesired outcome, an unforeseen risk, an unexpected obstacle, or even annoying frustrations. What keeps them awake at night?

 

Customer Gains

The gains are the benefits your customers want from the jobs they are trying to get done. This is about the positive outcomes. What results do your customers achieve when they complete their tasks? For sure, some are required or expected, but you should also identify the desired and unexpected gains your customers are looking for. What do they dream of at night?

 

Value Map: Design Your Value Proposition 

With the Value Map, you describe the value proposition of your business model in a more structured way. This map reveals your value proposition into three parts: products and services, pain relievers, and gain creators. 

 

Products and Services

This is a list of all the products and services on which you build your value proposition.  All the things that help your customers get their jobs done. Notice that products and services alone don't create value for your customers, but only in parallel with their jobs, pains, and gains. Likely, your value proposition consists of various types of products and services. 

 

Pain Relievers

How do your products and services relieve the pains of your customers? Try to explain how you want to reduce or perhaps abolish anything that keeps them from completing their tasks. You are not required to develop a pain reliever for every ailment experienced. Concentrate on the pain points that are important to your consumers and excel at them! 

 

Gain Creators

How do your products and services create the required, desired, or unexpected gains for your customers? Outline how you want to generate the outcomes that they are looking for. Like with pain relievers, you don't have to meet every gain with your gain creators. Focus on the most relevant gains, where your products and services can help the most.

 

Goal: Achieve Fit between your Customer Profile and your Value Map 

You achieve fit when your products and services create pain relievers and gain creators, which align with the jobs, pains, and gains that are valuable to your customers. Finding fit is hard.

Ask yourself: are you addressing significant customer gains and severe customer pains? Searching for fit is an iterative process of getting to know your customers and designing a value proposition that resonates with them. 

There are three levels of fit.

The first level is when you discovered relevant customer jobs, pains, and gains within your customer segment, and you have thought of a possible value proposition to match it. This is called problem-solution fit.

The second level is when you have evidence that your customers care about your value proposition, and you might even get some traction in the market. This is called product-market fit.

After the second level you might have a great value proposition, which might attract your customers. But... no value proposition will survive without a great business model. Not even the most wanted.

Therefore, you will have to search for a scalable, sustainable, and profitable business model in which your value proposition will reside. This is called business-model fit.

 

The Bottom Line 

Without a great value proposition, you will never have a great business model. We might even state that your value proposition is the center of your business model!

This makes the Value Proposition Canvas is a useful plug-in for the Business Model Canvas.

An easy-to-use tool to systematically observe your customers' jobs, pains, and gains and design your products and services in a more structured way by including pain relievers and gain creators.

Your goal? Achieve business-model fit! Start today.

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