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
Begin by watching Strategyzer's Value Proposition Canvas Explained and studying the canvas itself. If you will use it with others, share it with them beforehand, so they can prepare as well.
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
Customer Jobs
Jobs describe an important issue your customers are trying to solve in their work or in their lives. It could be the tasks they are trying to perform and complete, the problems they are trying to solve, or the needs they are trying to satisfy. The so-called “jobs-to-be-done” concept was invented and refined by two consulting companies, Innosight and Strategyn.
Types of Jobs
- Functional jobs
When your customers try to perform or complete a specific task or solve a specific problem they are aiming to get a functional job done.
- Social jobs
Trying to look good or gaining power and status are social jobs. These jobs describe how a customer wants to be perceived by others.
- Emotional jobs
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.
- Supporting jobs
Besides trying to get a core job done, your customer performs ancillary jobs in different roles. These can be divided into three categories:
- Buyer
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.
- Co-Creator
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.
- Transferrer
In this role, your customer performs jobs related to the end of the lifecycle of a value proposition. This could be, for example, how customers dispose of a product, transfer it to others, or resell it.
Significance
It is important to acknowledge that not all jobs have the same significance to your customer. Some are crucial in a customer’s work or life and some are merely trivial. Typically, the occurrence of a job may also indicate how significant it is to your customer. The consultancy Innosight highlights that a job is significant when a) the customer’s failure to satisfy the job has significant consequences b) when existing solutions don’t get the job done in a satisfying way, or b) when a large number of customers have the job or a small number of customers are willing to pay a lot of money to satisfy this job.
Context
Customer jobs often depend on the specific context in which they are performed. The context may impose certain constraints or limitations. For example, making a call on the fly is different when you are traveling on the train or when you are driving a car.
Customer Pains
Pains describe anything that annoys your customers before, during, and after getting a job done. This could be undesired costs and situations, negative emotions, or risks. Pains can be functional (a solution doesn’t work), social (I’ll look bad doing this), emotional (I feel bad every time I do this), or ancillary (it’s annoying to go to the store for this).
Intensity
A customer pain can be severe or light to the customer, similar to how jobs can be crucial or trivial to the customer.
Questions to ask
The following list of trigger questions can help you think of different potential customer pains:
- 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?
Customer Gains
Gains describe the outcomes and benefits your customers require, expect, desire or would be surprised by. This includes functional utility, social gains, positive emotions, and cost savings.
Types of Outcomes & Benefits
- Required gains
These are gains without which a solution wouldn’t work. For example, the most basic expectation that we have of a smartphone is that we can make a call with it.
- Expected gains
These are relatively basic gains that we expect from a solution, even if it could work without them. For example, since Apple launched the iPhone, we expect phones to be well designed and look good.
- Desired gains
These are gains that go beyond what we expect from a solution but would love to have if we could. These are usually gains that customers would come up with if you asked them. For example, we desire smartphones to be seamlessly integrated with our other devices.
- Unexpected gains
These are gains that go beyond customer expectations and desires. They wouldn’t even come up with them if you asked them. Before Apple brought touch screens and the app store to the mainstream, nobody really expected them to be part of a phone.
Relevance
A customer gain can be more or less relevant to customers, just like pains can feel more or less intense to them.
Questions to ask
The following list of trigger questions can help you think of different potential customer gains:
- 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
This is a list of all the products and services a value proposition is built around. It represents a bundle of products and services that help your customers get either a functional, social, or emotional job done, or helps them satisfy basic needs. This list includes supporting products and services that help your customers perform the roles of the buyer (e.g. services that help customers compare offers, decide and buy), co-creator (e.g. services that help customers co-design solutions), transferrer (e.g. services that help customers dispose of a product).
Types of Products & Services
Your value proposition is likely to be composed of various types of products and services:
- Physical/Tangible
Goods, such as manufactured products.
- Intangible
Products, like copyrights, or services, such as after sales assistance.
- Digital
Products, like music downloads, or services like online recommendations.
- Financial
Products like investment funds or services like the financing of a purchase.
Significance
It is important to acknowledge that not all products and services have the same significance to your customers. Some products and services are core to your value proposition, some are merely nice-to-haves.
Pain Relievers
Pain relievers describe how your products and services alleviate specific customer pains. They explicitly outline how you intend to eliminate or reduce some of the pains that annoy your customers before, while, and after they are trying to get a job done. Typically, great value propositions alleviate only a limited number of severe customer pains but do that very well. Make sure you focus on pains you have identified in the customer profile.
Questions to ask
The following list of trigger questions can help you think of different ways your products and services may help your customers alleviate pains. Ask yourself if they:
- 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.
Relevance
A pain reliever can be more or less relevant to the customer. Make sure you differentiate between substantial pain relievers and nice-to-haves.
Gain Creators
Gain Creators describe how your products and services create customer gains. They explicitly outline how you intend to create benefits that your customer expects, desires or would be surprised by, including functional utility, social gains, positive emotions, and cost savings.
Questions to ask
The following list of trigger questions can help you think of different ways your products and services may help your customers obtain required, expected, desired, or unexpected outcomes and benefits. Ask yourself if they:
- 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.
Relevance
A gain creator can produce more or less relevant outcomes and benefits for the customer just like we have seen for pain relievers. Make sure you differentiate between substantial gains and nice-to-haves.
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.