The Value Proposition Canvas is a tool which can help ensure that an innovative product or service is positioned around what the customer values and needs.
The Value Proposition Canvas was initially developed by Dr. Alexander Osterwalder as a framework to ensure that there is a fit between the product and market. It is a detailed look at the relationship between two parts of the Osterwalder’s broader Business Model Canvas; customer segments and value propositions.
At AFS this is a key check that we perform in order to assess whether an invention or an odd idea is a viable innovation at all.
The Value Proposition Canvas can be used when there is need to refine an existing product or service offering or where a new offering is being developed from scratch.
The Value Proposition Canvas is formed around two building blocks – customer profile and a company’s value proposition.
Gains – the benefits which the customer expects and needs, what would delight customers and the things which may increase likelihood of adopting a value proposition.
Pains – the negative experiences, emotions and risks that the customer experiences in the process of getting the job done.
Customer jobs – the functional, social and emotional tasks customers are trying to perform, problems they are trying to solve and needs they wish to satisfy.
A customer profile should be created for each customer segment, as each segment has distinct gains, pains and jobs.
Gain creators – how the product or service creates customer gains and how it offers added value to the customer.
Pain relievers – a description of exactly how the product or service alleviates customer pains.
Products and services – the products and services which create gain and relieve pain, and which underpin the creation of value for the customer.
Achieving fit between the value proposition and customer profile
After listing gain creators, pain relievers and products and services, each point identified can be ranked from nice to have to essential in terms of value to the customer. A fit is achieved when the products and services offered as part of the value proposition address the most significant pains and gains from the customer profile.
Identifying the value proposition on paper is only the first stage. It is then necessary to validate what is important to customers and get their feedback on the value proposition. These insights can then be used to go back and continually refine the proposition.
Why we bring this topic so prominently?
The ultimate judgement whether an idea is a viable and sustainable innovation is the market. Hence, any startup has to start with the Client, The Market and their actual things that matter and that people are willing to pay for. Without this, a beautiful idea is just an idea and a beautiful mind is just mind not an entrepreneur and even more successful one. Hence the top priority is the valued usefulness and utility of a novel approach, product or service and not how ingenuine a design or concept is.