Value proposition canvas is a tool that helps you design and test your value proposition, the benefit that you offer to your customers. It consists of two parts: the value map and the customer profile. In this article, you will learn how to use the value proposition canvas for customer-centric innovation, and how to validate your assumptions with experiments.
The value map describes how your product or service creates value for your customers. It has three elements: the products and services that you offer, the pain relievers that address your customers' problems and frustrations, and the gain creators that provide your customers' desired outcomes and benefits. To create a value map, you need to list the features and benefits of your offer, and how they relate to your customers' pains and gains.
Pain relief always comes first. Nobody with a broken leg wants a crutch before a cast. Pain relievers and gain creators always have to be prioritized by customer jobs to be done importance. Otherwise, instead of making a killer app, you end up with a bunch of bells and whistles. Don’t boil the ocean. Solve 1 significant problem incredibly — that’s how you make a killer app.
In my experience, I've seen the profound impact of truly understanding a customer's needs. Once, while working on the rebranding of a local store, we utilized the Value Proposition Canvas. Instead of treating it as a mere analytical exercise, we delved deep, holding extensive customer interviews. One particular feedback session with a long-time patron stood out. Their insights, emotions, and loyalties illuminated the gaps in our initial approach. That pivotal conversation reminded us that beyond the numbers and data, it’s the human stories that truly define a brand's value. Grounded in such authentic engagements, our refined value proposition not only resonated with data but also with real-life narratives.
The customer profile describes who your customers are, what they want, and what they need. It has three elements: the customer jobs, the pains, and the gains. The customer jobs are the tasks that your customers want to accomplish, the problems they want to solve, or the needs they want to satisfy. The pains are the negative emotions, costs, risks, or obstacles that your customers experience or fear before, during, or after performing their jobs. The gains are the positive outcomes, benefits, or opportunities that your customers expect, desire, or appreciate from performing their jobs.
Eliminate all assumptions. Get out of the office and go ask and observe your customers. The main goal of asking is to find what they believe is important because that’s how you’ll be able to sell to them. The main goal of observing their behavior is finding out what’s actually most important to them and that’s what you build your solutions on.
The fit between your value map and your customer profile is the degree to which your offer matches your customers' expectations and preferences. The fit can be classified into four types: problem-solution fit, product-market fit, value proposition-market fit, and business model-market fit. Each type of fit requires a different level of validation and evidence. A mismatch occurs when your offer does not address your customers' jobs, pains, or gains, or when your customers do not perceive or appreciate the value that you provide.
Is the solution: Valid? Does it solve the problem? Desirable? Do people actually want it? Feasible? Can it be done well? Viable? Will people pay enough for it? Make sure the solution is valid for the market you’re trying to sell to. A viable solution in one market or for one customer isn’t necessarily valid for another. Don’t mistake need for want. People need water. People want soda. Soda sells. Sure engineering says the can build it, but can they build it to the customer’s requirements and satisfaction? You can build the Taj Mahal, but if nobody buys tickets or if the profit margin is too thin, the whole thing crumbles.
To test and validate your value proposition canvas, you need to design and run experiments that can measure and verify your assumptions and hypotheses. An experiment is a systematic way of collecting data and feedback from your customers or potential customers, using different methods and channels. The experiment design process involves four steps: define your goal, formulate your hypothesis, choose your method, and plan your execution.
There are many methods that you can use to test and validate your value proposition canvas, depending on your goal, hypothesis, and resources. Some of the common methods are: interviews, surveys, landing pages, prototypes, minimum viable products (MVPs), beta tests, pilots, and A/B tests. Each method has its own advantages and disadvantages, and you should select the one that best suits your needs and context.
The final step of testing and validating your value proposition canvas is to execute your experiment and collect data and feedback from your customers or potential customers. You should follow some best practices to ensure the quality and reliability of your results, such as: define your metrics and criteria, segment and sample your audience, prepare and test your materials, conduct and record your sessions, analyze and interpret your data, and document and share your learnings.