To be in business, you must offer value to prospective customers. By making your value proposition explicit, you make it testable. If you can test it, you can improve it. The Value Proposition Canvas is a useful tool for surfacing the assumptions upon which we base key elements of our business strategy.
Take the time to complete all the tasks described below. You’ll end up with a solid first draft of your Value Proposition Canvas, which you can iterate, refine, and improve over time.
Because the world evolves, your value proposition should, too. In other words, it’s a continuing conversation, not a one-and-done affair.
The preceding video does a nice job of explaining how the canvas works. To go deeper, we recommend the book, Value Proposition Design.
You can download a free copy of the canvas from the Strategyzer site.
The concept underpinning the Value Proposition Canvas is straightforward: the potential for value creation exists when your products and services address your prospective customers pains and gains. Nothing revolutionary there. The usefulness of the model derives from how it helps us visualize, communicate, and discuss the fit between what we have to offer and what customers want and need the most.
Start with Customers
Customers are the final arbiter of value, so let’s start with them. As we learn from the Marketing Physics framework, value is personal and contextual. Consequently, a value proposition only makes sense relative to a targeted segment. If you serve multiple markets, you’re likely to have several value propositions. (We take a deeper dive into understanding customers with The Empathy Map Canvas.)
Take five (5) minutes and write down the characteristics of your targeted customer. Be as specific as possible within that timeframe. What long-buried assumptions have you made about who they are?
The customer profile section of the canvas prompts us to the jobs customers want to get done in their lives. It also asks us to enumerate the outcomes customers desire (gains) and wish to avoid (pains).
Customer jobs are tasks to perform, problems to solve, and needs to satisfy. They can be functional (“mow the lawn”), social (“status”), or personal (“piece of mind”). Jobs can be more or less significant to a customer—don’t fall into the trap of thinking that functional jobs are necessarily the most important.
Grab a pad of Post-it notes. Take five (5) minutes and write down as many relevant customer jobs you can think of. Don’t worry about evaluating them at this point.
Pains are outcomes, risks, or obstacles to be avoided while doing a job. Pain can be intense or moderate. The reduction of pain represents potential value.
The direct response television (“DRTV”) advertising industry has mastered the art of making customer pain explicit:
You probably aren’t selling your products and services via DRTV advertising and wouldn’t touch it with a 10-foot pole. Nevertheless, how such marketers identify customer pain is worthy of attention.
Set your timer for another five (5) minutes. What negative outcomes do your customers wish to avoid when doing their jobs? What obstacles are in their way? Don’t limit your list to those pains your existing product and services are designed to address.
Gains are desirable outcomes of a customer job. They can range from essential to nice-to-have. The achievement of gains can leave customers feeling satisfied, happy, or elated.
You guessed it—take five (5) minutes to write down what you think constitute desired outcomes of jobs from your customers’ perspective.
Ranking Jobs, Pains, and Gains
It’s not enough to offer value. One must often offer dramatically superior value in order to overcome the inertia of the status quo. Consequently, it’s important to the essential gains or the extreme pains associated with important customer jobs.