Designing a value proposition.
Value Proposition Design: How to Create Products and Services Customer Want.
I love using canvas and visual tools because they help me to visualize my ideas and communicate better to my team. I believe every team business should use these visual tools to keep track of their ideas and designs. One friend of mine said this thing “know who your customers are,” before you talk to them, the next canvas will help us understand our customers better.
Thousands of products and services are released every day into the market, and 80% of them fail to succeed. They claim to be the better, the best in the market, and better than the competition.
But it is true about what they offer, Why so many businesses fail?
Because they didn’t study and test the Value Proposition and understand the need of the customers, we can apply the VPC.
What is a value proposition canvas?
The Value Proposition Canvas is a tool that can help you understand your customer’s needs and problems and create a product or service that solves them.
Telling people you have the best product with the latest features doesn’t make them want it.
You can produce a fantastic product or service with the best features or the best materials. Still, if it fundamentally doesn’t help customers, or you don’t explain the value clearly, they won’t buy it.
I believe Value Proposition Canvas is a very critical tool for the business model. This helps the business in decision making and positioning of the product, helps you design, apply, and analyze.
Alexander Osterwalder is the creator of the Value Proposition Canvas, the Business Model Canvas, and Business Portfolios. He is the most influential innovation expert, a leading author, entrepreneur, and speaker; he has changed the way how established companies do business and how new ventures get started.
This canvas is divided into 2 parts:
On the left side, there is the product or service, and on the right side the Customer Profile.
Each side has different parts and jobs.
Let’s talk about the customer side:
Our customers are not robots, they are not just a number; they are real humans. The customer canvas is divided into 3 parts, the jobs, the pains, the gains.
Eg: I will use one very simple example so you understand let use Airbnb and travelers.
Travelers are our customers.
Jobs (jobs to be done):
The jobs describe what jobs our customers are trying to get done, or the task they are trying to perform and complete, the problems they are trying to get solved, or the needs they are trying to satisfy.
Types of Jobs
There are different types of jobs customers are trying to get done:
When your customers are trying to perform or complete a specific task or solve a particular problem, they aim to get a functional job done.
Trying to look good or gaining power and status are social jobs. These jobs describe how a customer wants to be perceived by others.
Your customers may seek a specific feeling, such as feeling good or feeling secure. This is a social job they are trying to get done.
Besides trying to get a core job done, your customer performs ancillary jobs in different roles. These can be divided into three categories:
In this role, your customer performs jobs related to buying, such as comparing offers, deciding which products to buy, performing a purchase, or taking delivery of a product or service.
In this role, your customer performs jobs related to co-creating value with you as an organization, such as co-designing a product or solution or even creating part of the value proposition.
In this role, your customer performs jobs related to the end of a value proposition’s life cycle. This could be, for example, how customers dispose of a product, transfer it to others, or resell it.
For our example remember we chose travelers, what are the jobs need to be done?
- Comparing and booking of a holiday home.
- Find the best combination of price, stay and experience, stay and experience.
- Negotiate with traveling companions.
In the process, when our customers want to do their jobs, they face many problems or annoying situations, during or after getting a job done.
Pains can be functional, social, emotional, or ancillary.
This can be an easy part of the canvas; remember this, we like to complain about things or circumstances! Right? With a bit of empathy for the customer, we can come with a long list of pains.
What are the pains our customers face? Travelers
- Hard to take the wishes of everyone into consideration.
- Difficult to find the right place for a nice price.
- Not sure that what is promised is what I will get.
Gains can be a little hard to define or find; gains are benefits that our customers want to achieve. They expect something from their jobs; this can be a functional utility, social gains (recognition), positive emotions, and cost savings.
People want to achieve many different things, especially when they have some jobs to do, e.g., a project manager in developing ideas. They want to gain recognition He or she wants to gain recognition in his career as a high-performance worker.
What my customer wants to achieve? Travelers
- Easy comparing between holiday homes.
- Share the search with travel companions.
- The experience of local.
Here describe how our product or service alleviates customers’ pains when they are trying to get a job done.
Sometimes we thought we found good pain relievers, but the customers don’t think it is a pain reliever.
Ask some questions and write down your answers will help you create a better value proposition.
Is my product or service saving time, money, or efforts?
Is my product or service making me feel better to my customer?
Is my product or service helping my customers find peace in their lives?
Is eliminating common mistakes in their job or lives?
Is eliminating fear?
How my product or service relieves some of my customer’s pains? Travelers.
- Easy and fast finding a place to stay.
- Online booking through the website.
- Reviews of other visitors.
This is where you show how your product or service adds value and create gains for your customer.
This is the Block how your product or service helps customers achieve their goals, including functional utility, social gains, positive emotions, and cost savings. Social Gains creator should aim; profits (recognition), positive emotions, and cost savings.
For, e.g., a Prada suit costs 3600; the gain creator for this product is social status because the person who wants to buy this kind of suit is because they want to show people, they can achieve this kind of product.
How my product creates some gains to my customers? Travelers
- Match between home and travelers
- Easy to use interface.
- Find the best possible stay experience.
Product or service
This Block is about your product or service; if your company has multiple products or services, I recommend creating a different canvas for each product or service because it will help you understand your product better.
Think about your products or services, if they really add some value to your customer or solve some problems for them.
Think when you solve a problem, what problem you can solve right now, and what problems you can solve in the future, make a timeline of problem-solving that will help you create a value proposition in time.
Remember to see your customer as a human with emotions and feelings that will help you have some sympathy, and sympathy is the most powerful tool because you can imagine how that person feels and can imagine their frustration.
What does my product offer to my customer? Travelers.
- Booking online or from a mobile phone or tablet.
- Booking, paying, and having contact through trusted services.
- Program for homeowners.
- Detailed profiles and reviews.
From Airbnb we can see they really think about the customer, I need to say this Airbnb is a customer service freak. Everything they do is for their customers, and the experience they want to give to their customers.
Now you have an overall view of how this value proposition canvas works If you’re interested in more I’ll be writing a blog post about how Avatars in Marketing, create your own Avatar.