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1-Page Summary of Value Proposition Design
Designing Your Value Proposition
You and your team work hard to create products that customers want. You spend time and resources on product development, as well as defining a business plan based on customer data. Unfortunately, these efforts can go awry due to confusion about what the customers really want.
The “Value Proposition Design” process helps you and your team to analyze what the customer wants. By focusing on creating value for the customer, you can eliminate unnecessary features or technologies that will not appeal to them. Test your ideas instead of watching them fail at launch time.
The value proposition canvas is a tool for designing your value proposition. It involves the environment map, which helps you define your context, and the business model canvas, which will help you identify activities and processes necessary to create and deliver profitable offerings. The design works for both innovators creating new products or services, as well as existing organizations improving or adding to their suite of offerings.
The Business Model Canvas
The elements of the business model canvas include: * Customer segments. Identify clusters of people or firms you hope to sell your product to and create a value proposition for them.
Value propositions are what you offer to a customer segment. They can be communicated through channels, which inform customers about the value proposition and bring it to them.
Customer relationships are extremely important. They can be formed in many different ways, but they must be maintained to ensure that the client is satisfied with your product or service. A successful value proposition will generate revenue for a company and it requires certain resources to develop it. It also requires key activities to make sure you achieve high performance and provide an excellent customer experience.
Key partnerships – Your network of suppliers and partners contributes external resources.
“Cost structure” refers to the money you need to pay for operating your business model.
The Value Proposition Canvas
A value proposition is a statement that outlines the benefits customers will receive from your product or service. The Value Proposition Canvas includes two sections: Customer Profile and Value Map. The Customer Profile identifies who your target audience is, what makes them unique, what their goals are, and how they currently solve problems in their lives. The Value Map section contains the relationship between your offering (product or service) and the gains it provides to its users as well as any pains it alleviates for them based on the information you gathered from the Customer Profile section of this document.
Companies must identify their customers’ jobs to determine what they’re looking for. Jobs vary depending on context, such as functional jobs (for example, mowing the lawn) and social jobs (such as wearing a designer watch). Personal or emotional jobs help people feel good, calm or secure. Supporting jobs help consumers compare prices and offers, provide feedback to suppliers and stop using a product.
Customer Pains and Gains
If a product or service doesn’t work as promised, is too expensive, takes too much time or involves risk, then customers will be disappointed. Ask them what price they think is too high and what challenges they face using your product to identify potential customer pains.
Benefits are what consumers experience when they use your product or service. Assess them on a scale, beginning with the most basic ones. That means that the product works and is reliable. For example, if you have a cell phone, it should be able to make calls without any problems. Next in importance is how good the design of the cell phone is; people like nice-looking things that work well for them. The highest level would be unexpected benefits – something beyond expectations such as a smartphone that responds to voice commands
