From time to time client’s intrapreneurs and internal innovation coaches ask me how to use the Value Proposition Canvas. They might’ve seen it somewhere, or someone told them it is a good tool, and now they want some advice on how to proceed. Although all of them have their unique context, the bulk of my response is quite standard.
And now I’m sharing that generic part of the response with you.
Understanding the Value Proposition Canvas
Building blocks explained
Value proposition canvas consists of two sides. Right hand side represents the customer and is usually called Customer Profile or Customer Segment, while the left hand side represents the value delivered to these customers and is usually called Value Map or Value Proposition.
There is a fair amount of confusion regarding the building blocks, which is perplexing to me since Strategyzer provides detailed explanations for each one of them on their support website. Descriptions below are extracted from there.
Customer Profile or Customer Segment
Types of Jobs
- Functional jobs
- Social jobs
- Emotional jobs
- Supporting jobs
Questions to ask
- What does your customer find too costly? E.g. does it take them a lot of time, cost them too much money, or require substantial efforts?
- What makes your customer feel bad? E.g. what are their frustrations, annoyances, or the things that give them a headache?
- How are current solutions underperforming for your customer? E.g. which features are they missing, are there performance issues that annoy them, or malfunctions they mention?
- What are the main difficulties and challenges your customers encounter? E.g. do they understand how things work, do they have difficulties getting certain things done, or do they resist certain jobs for specific reasons?
- What negative social consequences do your customers encounter or fear? E.g. Are they afraid of a loss of face, power, trust, or status?
- What risks do your customers fear? E.g. Are they afraid of financial, social, or technical risks, or are they asking themselves what could go awfully wrong?
- What’s keeping your customer awake at night? E.g. What are their big issues, concerns, and worries?
- What common mistakes do your customers make? E.g. Are they using a solution the wrong way?
- What are barriers keeping your customers from adopting a solution? E.g. Are there upfront investment costs, a steep learning curve, or are there other obstacles preventing adoption?
Types of Outcomes & Benefits
- Required gains
- Expected gains
- Desired gains
- Unexpected gains
Questions to ask
- Which savings would make your customers happy? E.g. which savings in terms of time, money and effort would they value?
- What outcomes do your customers expect and what would go beyond their expectations? E.g. What quality levels do they expect and what could you offer more or less of?
- How do current solutions delight your customers? E.g. Which specific features do they enjoy, what performance and quality do they expect?
- What would make your customers’ jobs or life easier? E.g. Could there be a flatter learning curve, more services, or lower costs of ownership?
- What positive social consequences do your customers desire? E.g. what makes them look good, increase their power or their status?
- What are customers looking for most? Are they searching for good design, guarantees, specific or more features?
- What do customers dream about? E.g. What do they aspire to achieve or what would be a big relief to them?
- How do your customers measure success and failure? E.g. How do they measure performance or cost?
- What would increase your customers’ likelihood of adopting a solution? E.g. do they desire lower cost, fewer investments, lower risk, or better quality?
Value Map or Value Proposition
Products and Services
Types of Products & Services
Questions to ask
- Produce savings? E.g. in terms of time, money, or efforts.
- Make your customers feel better? E.g. by killing frustrations, annoyances, things that give customers a headache.
- Fix underperforming solutions? E.g. by introducing new features, better performance, or better quality.
- Put an end to difficulties and challenges your customers encounter? E.g. by making things easier or eliminating obstacles.
- Wipe out negative social consequences your customers encounter or fear? E.g. in terms of loss of face, lost power, trust, or status.
- Eliminate risks your customers fear? E.g. financial, social, technical risks, or what could go awfully wrong.
- Help your customers better sleep at night? E.g. by helping with big issues, by diminishing concerns, or eliminating worries.
- Limit or eradicate common mistakes customers make? E.g. by helping use a solution the right way.
- Get rid of barriers that are keeping your customer from adopting solutions? E.g. lower or no upfront investment costs, flatter learning curve, or the elimination of other obstacles preventing adoption.
Questions to ask
- Create savings that make your customers happy? E.g. in terms of time, money and effort, ...)
- Produce outcomes your customers expect or that go beyond their expectations? E.g. better quality levels, more of something, or less of something.
- Outperform current solutions and delight your customers? E.g. regarding specific features, performance, or quality.
- Make your customers’ work or life easier? E.g. via better usability, accessibility, more services, or lower cost of ownership.
- Create positive social consequences? E.g. makes them look good, or produces an increase in power, status.
- Do something specific that customers are looking for? E.g. good design, guarantees, specific or more features.
- Fulfill something customers are dreaming about? E.g. by helping them achieve their aspirations or getting a relief from a big issue?
- Produce positive outcomes matching your customers’ success and failure criteria? E.g. better performance, or lower cost)
- Help make adoption easier? E.g. lower cost, fewer investments, lower risk, better quality, performance, or design.
How to use the value proposition canvas?
Once you understand the blocks it is really easy to get started.
It is highly unlikely that you are starting from a blank slate, or in other words, you probably already have some ideas about who do you want to serve and what do you want to serve them with. Start by writing them down in the appropriate parts of the value proposition canvas.
Congratulations, now you have a bunch of assumptions on your canvas. Grab a colleague and ask them if what you put down makes any sense at all. Take their feedback with an open heart. Rewrite so it makes more sense. Look at your customer profile, select a few jobs, pains, and gains that you want to focus on. Remember, these are still assumptions, so now you need to test them with actual customers.
Once you’ve done that move to the value map. Does what you have there fit with what you found out about customer needs? Test it. No fit? Pivot or persevere. Fit? Great, continue with developing the rest of the business model.
For more examples read How To Fill In A Value Proposition Canvas by Isaac Jeffries and How to really understand your customer with the value proposition canvas by Patrick van der Pijl. There are also around 400 blog posts including the value proposition canvas term at the Strategyzer blog. But if you are going that route then you might as well read the book Value Proposition Design, which has the most detailed explanations and examples.
Remember, it’s all about the speed of learning.
Value proposition design is covered in the hospitality scenario which comes with Playing Lean 2.