Matching your company’s value proposition to each client segment isn’t as straightforward as it sounds. It can feel like trying to fit a square peg into a round hole.
Insights from a research-based value proposition canvas help you capture attention in an ever-expanding sea of choice. You can tailor your value proposition to specifically fit the requirements of each client sector.
By consistently revisiting your value proposition canvas, you’ll identify where you can gain a competitive advantage in your core messaging, positioning, and in the development of new and existing products.
What is the value proposition canvas
The Value Proposition Canvas is a strategic tool used to understand and design the value that a product or service brings to its target customers. It consists of two main components: the Customer Profile and the Value Map.
The Customer Profile helps businesses identify and define their target customers’ needs, wants, pains, and gains. It delves into understanding customer jobs, pains, and gains to gain insights into their motivations and challenges.
On the other hand, the Value Map focuses on the value that a product or service provides to customers. It outlines the products and services offered, pain relievers, and gain creators that address the specific needs and desires identified in the Customer Profile.
Using the Value Proposition Canvas helps businesses align their offerings with customer needs and create compelling value propositions that resonate with their target audience. By identifying and addressing customer pain points and offering solutions that fulfill their desires, businesses can craft value propositions that set them apart from the competition and drive customer engagement and loyalty.
What are the benefits of the value proposition canvas
The Value Proposition Canvas offers a wide range of advantages to businesses, enabling them to create effective value propositions and drive business success.
- Customer Insights: The Customer Profile section of the canvas helps businesses gain valuable insights into their target audience’s preferences, challenges, and aspirations. This deep understanding allows companies to develop products and services that cater to specific customer needs.
- Product-Market Fit: By aligning the Value Map with the Customer Profile, businesses can ensure their offerings fit perfectly with the demands of their target market. This increases the chances of achieving a product-market fit and gaining a competitive advantage.
- Differentiation: The Value Proposition Canvas aids in identifying unique selling points and competitive advantages. This helps businesses differentiate themselves from competitors and attract a loyal customer base.
- Focus on Value: The canvas encourages businesses to focus on the value they provide to customers. This value-centric approach ensures that all aspects of the business are geared towards meeting customer needs and delivering exceptional experiences.
- Strategic Decision Making: The Value Proposition Canvas serves as a strategic tool for decision making, guiding businesses in prioritizing resources, refining offerings, and developing targeted marketing campaigns.
Visualizing the 2 value proposition canvas building blocks
The value proposition canvas framework is a tool created by Alexander Osterwalder and Yves Pigneur, as part of their world renowned Business Model Canvas. As Alexander Osterwalder explains, the value proposition canvas is “a tool for marketing experts, product owners, and value creators…to visualize, design and test how you create value for customers.”
The framework scaffolds your thinking around how your product or service meets the real needs of your clients. It uses 2 building blocks from the Business Model Canvas that are visually represented as a customer profile circle and a value proposition square. Both are subdivided into 3 equal sections:
Customer profile circle
Jobs-to-be done before a purchase can be made
These might be functional, social and/or emotional jobs that need to be addressed on the path to purchase. Functional jobs are practical everyday tasks. Social jobs are driven by feelings that arise from our roles in social groups. Emotional jobs are based on our personal preferences and insecurities.
Gains
The benefits your clients get from your value proposition. What do they need and expect? What adds a sprinkling of joy? What encourages prospects to purchase your product?
Pains
What are the main roadblocks on your clients’ path to purchase? This can be experiences, concerns they want to avoid, risks, and things that induce negative emotion.
Value proposition square
This is also known as the value proposition map and is also divided into 3 subsections.
Products and services
List all the products and services you offer – both existing ones and those in development.
Pain relievers
How do your products or services relieve the client pains you’ve previously identified? Perhaps it reduces risk, saves time, or takes the hassle out of a job.There are many ways your offering is solving client problems. The idea of the VPC visualization is to get specific.
Gain creators
Identify which of your products or services help your client achieve their success criteria. How does it make their life easier? Does it help them meet expectations, reach a goal, improve results? Again, this is about getting specific with how your product or service adds value to your clients.
Where to gather value proposition canvas information
When creating a Value Proposition Canvas, various sources can provide valuable information to build a strong foundation for the analysis. Here are the key options to consider:
- Customer Interviews: Conduct in-depth interviews with existing and potential customers to understand their needs, pain points, and preferences. These interviews can provide firsthand insights into what customers truly value in products or services.
- Surveys: Design and administer surveys to gather quantitative data from a larger audience. Surveys can help validate findings from interviews and provide statistical evidence for the identified customer segments and their preferences.
- Market Research: Utilize market research reports and industry analyses to gain a broader understanding of market trends, competitors, and customer behavior. These reports can offer valuable data to support the analysis.
- Customer Feedback and Reviews: Analyze customer feedback and reviews from various channels, such as online platforms and customer support interactions. This data can highlight areas for improvement and identify what customers appreciate about the offerings.
- Competitor Analysis: Study competitors’ products and value propositions to identify gaps in the market and potential opportunities for differentiation.
- Internal Stakeholder Interviews: Interview employees from different departments, including sales, marketing, and product development, to gain internal perspectives on the company’s offerings and customer interactions.
- Analytics and Website Data: Analyze website analytics, user behavior, and conversion data to understand customer interactions with digital assets and identify patterns in user preferences.
- Focus Groups: Organize focus groups to gather qualitative insights from a diverse group of individuals. Focus groups can provide a deeper understanding of customer attitudes and preferences.
- Customer Support Data: Review customer support interactions and inquiries to identify recurring issues and pain points that customers encounter.
How to maximize value proposition canvas insights
Now you’ve identified all the elements of your client circle and value map square, it’s time to use your value proposition canvas to help you achieve product market fit.
Rank your client jobs-to-be-done in order of priority and the pains and gains that are attached to those particular jobs. Perhaps think of it as a scale from ‘essential’ to ‘nice to have’.Then connect which of your products and services provide direct pain relief or help them achieve a gain.
There’s likely to be a long, somewhat overwhelming list of things in each section of your customer profile circle. The value proposition template gives you a map that clearly shows the client jobs that you’re going to focus on first.
The whole idea of the framework is to visualize your thinking. It’s a practical activity that can involve any number of participants. Physically create your circle and square and make sure all the ideas in all the segments can be moved around. It doesn’t matter if this is on screen or post-its, the point is to use the tool to scaffold your thinking.
Importance of reliable data
An often overlooked key element of the value proposition canvas framework is that you must consider things from the perspective of value to your client. It’s at this point that you must interrogate yourself with the question ‘how do I know?’
It’s absolutely vital to base your value proposition map on current research, not anecdotal evidence or general assumptions.
How do you know that these are the top 5 pains in the way of your client segment completing that particular job-to-be-done? Digging even deeper – are you sure that you’ve identified all their jobs-to-be-done and know how they feel about them?
Your value proposition maps must be grounded in reliable data about your client segments. Each different brand persona needs their own value proposition map, as they’re all interacting with your company at different places and from different perspectives.
The VPC framework helps you get to the heart of everyone’s ‘why’ – why they should buy your product or service over all the others. Ongoing market research using the value proposition framework leads to dynamic refinements that highlight where you can differentiate your company in the marketplace. Research based VPC insights give you confidence in changes to product development, core messaging and company-wide strategy.
Value proposition canvas example
Creating a Value Proposition Canvas example involves synthesizing the information gathered from various sources to craft a clear and compelling value proposition. Let’s consider a hypothetical example for a software company offering a project management tool for small businesses:
- Customer Segment: Small Business Owners and Managers:
- Needs and Wants: Efficient project management, streamlined collaboration, time tracking, easy task assignment, and intuitive user interface.
- Pains and Frustrations: Difficulty in tracking project progress, disjointed communication among team members, time-consuming manual task assignment, and complex project management software.
- Product and Service Offerings:
- Project Management Software: A user-friendly and feature-rich platform for planning, organizing, and tracking projects.
- Collaboration Tools: Real-time chat and file-sharing capabilities to enhance team communication and efficiency.
- Time Tracking Module: Automated time tracking to monitor project hours and streamline billing and reporting.
- Value Proposition:
- Our project management tool simplifies your team’s workflow, ensuring seamless collaboration and efficient project tracking. With an intuitive user interface, task assignment becomes a breeze, saving you time and effort. Say goodbye to scattered project details and embrace a centralized platform that empowers your small business to thrive.
- Differentiators:
- User-Friendly Interface: Our software’s intuitive design ensures a smooth onboarding process, reducing the learning curve for your team.
- Seamless Collaboration: Real-time chat and file-sharing foster better communication among team members, leading to improved productivity.
- Time and Cost Savings: Automated time tracking eliminates manual data entry, freeing up valuable resources for other essential tasks.
- Pain Relievers:
- Eliminate Project Chaos: Our tool centralizes project details and progress, providing clarity and reducing the stress of managing multiple projects simultaneously.
- Simplify Task Management: Effortlessly assign tasks to team members and monitor their progress, streamlining project coordination.
- Gain Creators:
- Enhanced Collaboration: Real-time chat and file-sharing tools promote a collaborative work environment, driving innovation and creativity.
- Time Efficiency: Automated time tracking allows your team to focus on project deliverables without worrying about manual timekeeping.
- Supporting Evidence:
- Testimonials: Gather feedback from early adopters who have experienced improved project management and collaboration with our tool.
- Case Studies: Showcase success stories of small businesses that achieved higher productivity and efficiency using our software.
- Communication Channels:
- Website: Feature the value proposition and differentiators on the homepage to attract potential customers.
- Social Media: Share customer testimonials and case studies to demonstrate the real-world impact of our solution.
- Email Marketing: Send personalized emails to leads, highlighting how our tool addresses their pain points.
- Customer Relationship:
- Onboarding Support: Offer personalized onboarding assistance to help new customers get up to speed with our software.
- Customer Success Team: Provide ongoing support and resources to ensure customers maximize the value of our solution.
In this example, the Value Proposition Canvas aligns the product offerings with the identified needs and wants of the target customer segment. The differentiators and pain relievers address the specific pain points and challenges faced by small business owners and managers, making the value proposition compelling and relevant. Supporting evidence, such as testimonials and case studies, adds credibility to the value proposition and builds trust with potential customers. Effective communication channels and a strong customer relationship strategy complete the Value Proposition Canvas, setting the foundation for a successful product launch and market expansion.
Project Management Software: A user-friendly and feature-rich platform for planning, organizing, and tracking projects.
Collaboration Tools: Real-time chat and file-sharing capabilities to enhance team communication and efficiency.
Time Tracking Module: Automated time tracking to monitor project hours and streamline billing and reporting.
Value Proposition:
Our project management tool simplifies your team’s workflow, ensuring seamless collaboration and efficient project tracking. With an intuitive user interface, task assignment becomes a breeze, saving you time and effort. Say goodbye to scattered project details and embrace a centralized platform that empowers your small business to thrive.
Differentiators:
User-Friendly Interface: Our software’s intuitive design ensures a smooth onboarding process, reducing the learning curve for your team.
Seamless Collaboration: Real-time chat and file-sharing foster better communication among team members, leading to improved productivity.
Time and Cost Savings: Automated time tracking eliminates manual data entry, freeing up valuable resources for other essential tasks.
Pain Relievers:
Eliminate Project Chaos: Our tool centralizes project details and progress, providing clarity and reducing the stress of managing multiple projects simultaneously.
Simplify Task Management: Effortlessly assign tasks to team members and monitor their progress, streamlining project coordination.
Gain Creators:
Enhanced Collaboration: Real-time chat and file-sharing tools promote a collaborative work environment, driving innovation and creativity.
Time Efficiency: Automated time tracking allows your team to focus on project deliverables without worrying about manual timekeeping.
Supporting Evidence:
Testimonials: Gather feedback from early adopters who have experienced improved project management and collaboration with our tool.
Case Studies: Showcase success stories of small businesses that achieved higher productivity and efficiency using our software.
Communication Channels:
Website: Feature the value proposition and differentiators on the homepage to attract potential customers.
Social Media: Share customer testimonials and case studies to demonstrate the real-world impact of our solution.
Email Marketing: Send personalized emails to leads, highlighting how our tool addresses their pain points.
Customer Relationship:
Onboarding Support: Offer personalized onboarding assistance to help new customers get up to speed with our software.
Customer Success Team: Provide ongoing support and resources to ensure customers maximize the value of our solution.
In this example, the Value Proposition Canvas aligns the product offerings with the identified needs and wants of the target customer segment. The differentiators and pain relievers address the specific pain points and challenges faced by small business owners and managers, making the value proposition compelling and relevant. Supporting evidence, such as testimonials and case studies, adds credibility to the value proposition and builds trust with potential customers. Effective communication channels and a strong customer relationship strategy complete the Value Proposition Canvas, setting the foundation for a successful product launch and market expansion.
When to use the value proposition canvas framework
It’s likely that you’ve already considered when this thinking framework will be useful in your business. It may be a tool that you already use regularly. Here are some pivotal moments when the value proposition canvas is most useful to your business and examples of how NewtonX supports each one.
