Value Proposition Design: Understanding the Basics

As a business, it is important to understand the needs of your customers and how your products and services can meet those needs. This is where value proposition design comes in. A value proposition is a statement that communicates the benefits your product or service offers to your customers. It is essentially the reason why customers should choose your business over others.

To create a successful value proposition, you need to focus on three main elements: customer jobs, customer pains, and customer gains. Customer jobs refer to the tasks and activities that customers are trying to accomplish. Customer pains are the problems and frustrations that customers experience when trying to complete those tasks. Customer gains are the benefits and outcomes that customers desire.

Your list of products and services should be built around these elements. You need to identify the products and services that help your customers complete functional, social, or emotional jobs or satisfy basic needs. This bundle of products and services should help your customers alleviate specific pains and achieve essential gains.

Pain relievers and gain creators are two key concepts in value proposition design. Pain relievers describe how your products and services alleviate specific customer pains. They explicitly outline how you intend to eliminate or reduce the things that annoy your customers before, during, or after they are trying to complete a job. Gain creators describe how your products and services create customer gains. They explicitly outline how you intend to produce outcomes and benefits that your customers expect, desire, or would be surprised by.

To create a remarkable value proposition, you need to focus on jobs, pains, and gains that matter to customers and achieve those exceedingly well. You should not try to address all customer pains and gains. Instead, focus on those that will make a difference for your customer.

Fit is another key concept in value proposition design. You achieve fit when customers get excited about your value proposition, which happens when you address important jobs, alleviate extreme pains, and create essential gains that customers care about. Fit is hard to find and maintain, but it is the essence of value proposition design.

Searching for fit is the process of designing value propositions around products and services that meet jobs, pains, and gains that customers really care about. Fit between what a company offers and what customers want is the number one requirement of a successful value proposition. Fit happens in three stages. The first occurs when you identify relevant customer jobs, pains, and gains you believe you can address with your value proposition. The second occurs when customers positively react to your value proposition and it gets traction in the market. The third occurs when you find a business model that is scalable and profitable.

It is also important to note that value propositions in business-to-business transactions typically involve several stakeholders in the search, evaluation, purchase, and use of a product or service. Each stakeholder has a different profile with different jobs, pains, and gains. Identify the most important ones and sketch out a Value Proposition Canvas for each one of them.

Finally, use the customer profile and value map to visualize what matters to customers and how you believe your products and services will ease pains and create gains. Communicate these documents across your organization as one-page actionable documents that create a shared understanding of your customers and how you intend to create value. Use them as scoreboards to track if assumed customer jobs, pains, and gains exist when you talk to real customers and if your products and services actually ease pains and create gains.

In conclusion, value proposition design is a crucial aspect of creating a successful business. By understanding your customers' jobs, pains, and gains, you can create products and services that meet their needs and communicate those benefits through a strong value proposition. Remember to focus on important customer elements, strive for fit, and use customer profiles and value maps to track progress and make improvements.