Value Proposition Design Summary

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Value Proposition Canvas

The Value Proposition Design book is split into two sections. The first section provides the theory which is summarized here. The second section provides instructions on how to develop a Value Proposition. The summary of the second section has been included in the CustDev section below as it is more process orientated. A Value Proposition describes the benefits customers can expect from a product or service. Great value propositions focus on jobs, pains, and gains that specific customer segments are trying to solve or achieve. The Value Proposition Design takes what was written in the Four Steps to the Epiphany and The Startup Owner’s Manual and applies the Value Proposition Canvas (VPC) to it. The VPC is a way to visually represent customer wants/needs and the value chain thought the business. The BMC is a tool to look at the whole business in one place. The VPC is a tool to us to look at a customer archetype. The VPC is designed to give organizations a unified language when discussing VPC when creating new value propositions or iterating existing ones.

“Value Proposition Design show you how to use the VPC to design and test great value proposition in an iterative search for what customers want.”

The Customer Profile side of the VPC (the circle divided in three) allows for the clarification of customers. The Value Map side of the canvas (the square divided in three) allows for the delivery of value to customers. The Customer Profile side of the VPC has three sections; Customer Jobs, Customer Pains, and Customer Gains. Customer Jobs describes what a customer aims to get done on a daily basis. The jobs could be functional, social, or emotional. Each job has a different value according to the customer. Some are critical, while others are inconsequential. Customer Pains are risks or announces before, during, or after a job the customer is trying to get done. The pains could be functional, social, or emotional. Each pain has a different value according to the customer. Some are critical, while others are inconsequential. Pains should be measured quantitatively not qualitatively. Customer Gains are outcomes or benefits which range from required and expected to things that delight and surprise customers. See the Kano model for more detail. Each gain has a different value according to the customer. Some are required, while others are nice to have. Gains should be measured quantitatively not qualitatively.

An organization should understand “the day in the life of their customer” as best they can. An organization should determine what jobs, pains, and gain a customer has and rank them in importance according to the customer. Ultimately, an organization is looking for the top three pain points or gain creators that occur on a daily basis, where the customer has tried to solve the problem themselves, and they have a budget. This information should be captured in a customer persona document. There should be one Value Proposition for each customer segment.

The Customer Value Map side of the VPC has three sections, Products and Services, Pain Relievers, and Gain Creators. Products and Services represent all the products and services an organization offers. The products and services should relate directly to the jobs, pains, and gains of the customer segment. The more accurately this is done via a value proposition for a specific customer segment, the closer the Product-Market-Fit. Again, with Pain Relievers, an organization is looking to solve at least one of the top three pain points or gain creators that occur on a daily basis, where the customer has tried to solve the problem themselves, and they have a budget. The Value Map will clearly and succinctly outline how the products and services create value for a specific customer segment. As with the customers jobs, pain, and gains on the Customer Value Map side of the VPC, an organization should list the customer’s product and services, describe the pain they are solving or gain they are providing for the customer, and list them in order of priority according to the customer. The closer an organization’s products and services map to the customer’s top 1 – 3 pains and gains the better the Product-Market-Fit

Product-Market-Fit is the ultimate aim of value proposition design. The better an organization’s products, services, and value propositions meet the needs of a customer segment’s jobs, pains, and gains, the closer an organization is to Product-Market-Fit. Product-Market-Fit takes place in three stages. Problem-Solution-Fit, as mentioned in Steve Blanks’ work, occurs when an organization has evidence customers care about specific jobs, pain, and gains and an appropriate value proposition has been designed. Product-Market-Fit occurs when an organization’s products and services are adding value to a customer segment by solving their pains and meeting their needs. Business-Model-Fit occurs when a scalable and repeatable business model is found. A template for a value proposition may look something like this:

Our [product/service] help(s) [customer segment]who want to [jobs to be done]by [verb]and [verb]unlike [competing value proposition].

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