The term ‘value’ is frequently bandied about in business discussions, yet its true definition remains elusive, subject to interpretation, and entirely dependent on context. Value is multifaceted, varying from one organizational type to another, from one customer to another. Let’s delve deeper into its dynamics.
For corporations, value is often equated with financial metrics – increasing revenue and reducing costs. Conversely, a startup might associate value with user acquisition and retention, which are crucial to its growth and survival.
Nonprofits, distinct in their mission, measure value in societal impact, in the number of lives positively altered. And Government institutions may define value as the efficient delivery of services, fostering a just and harmonious society.Nonprofits, distinct in their mission, measure value in societal impact, in the number of lives positively altered. And Government institutions may define value as the efficient delivery of services, fostering a just and harmonious society.
Value is the successful intersection of an organization’s capabilities and a customer’s needs. It is that sweet spot where an organization’s offerings align seamlessly with the customer’s expectations, executed in a viable, sustainable manner.
Yet, we must go further. Value is not just about meeting needs or achieving viability. It demands differentiation, innovation, and the courage to disrupt established norms. The real value resides in the uniqueness of your proposition, in the audacity to challenge the traditional.
In this article, I share a powerful tool I’ve used with product leaders and businesses to understand better where and how to unlock real value. I walk you through a real-life example and share a step-by-step guide I use to run Value Proposition workshops.
How to Leverage the Value Proposition Canvas
When defining and understanding value, you should start with the Value Proposition Canvas developed by Strategyzer. At adaptiveX, it has helped us orient leaders and their teams with a visual framework that allows us to ‘map’ their product or service offering against their customers’ needs, ultimately helping them identify where value is created.
First, let’s start with the composition of the canvas. It is divided into two main sections – the Customer Profile and the Value Map.
- Customer Profile: This part lets you delve deep into your customer’s world. It includes the customer’s jobs (what they’re trying to get done in their work or life), their gains (the outcomes they desire or the benefits they seek), and their pains (the negative experiences, risks, or obstacles they want to avoid).
- Value Map: Here, you outline your offering. It includes the products and services you offer (that can help customers get their jobs done), the gain creators (how your offering creates gains for the customers), and the pain relievers (how it alleviates customer pains).
The magic happens where the Customer Profile and Value Map intersect – where your offering meets your customer’s needs and expectations, creating ‘value.’
Using the Value Proposition Canvas helps to uncover gaps in your business models while identifying opportunities for innovation to meet and exceed customer expectations. It also helps teams and leaders challenge assumptions, iterate quickly, and, most importantly, create unique, differentiated value.
Practical Steps for Using the Value Proposition Canvas
Below is an outline to work through the Value Proposition Canvas. It’s a step-by-step breakdown of how we guide clients through discovering undeniable value for their new services and products.
Start with the Customer Profile
- Describe the Customer: Begin by creating a persona of your ideal customer. Who are they? What do they care about? This includes demographic information such as age, gender, location, education, and occupation, but it also goes deeper to understand their behaviours, attitudes, motivations, and lifestyle.
- Define the Jobs: Identity what your customer is trying to achieve. Jobs can be functional (tasks they want to accomplish or problems they need to solve), social (how they want to be perceived by others), or emotional (how they want to feel).
- Identify the Gains: What does a good day look like for your customer when trying to accomplish their jobs? Gains are the outcomes your customers desire or the benefits they seek, which could be anything from speed and efficiency to comfort and peace of mind.
- Understand the Pains: What does a bad day look like? Pains are the obstacles, negative experiences, or risks your customers want to avoid while trying to accomplish their jobs.
Fill out the Value Map
- Describe the Product or Service: Start by outlining what you’re offering to your customers. This includes the key features of your product or service that directly relate to the customer jobs you’ve identified.
- Identify Gain Creators: Map your product or service features to your identified customer gains. How does your product or service create these gains?
- Identify Pain Relievers: Identify how your product or service alleviates customer pains. What features or aspects of your offering mitigate the challenges your customers face?
Look at the Big Picture
- Find the Fit: The intersection of the Customer Profile and Value Map is where value is created. Review your canvas to ensure your product or service addresses key customer jobs, relieves significant pains, and provides meaningful gains.
- Test and Iterate: The Value Proposition Canvas is not a static document. As you learn more about your customers and offerings, evolve, revisit, and update your canvas. This practice ensures it remains relevant and continues to drive value creation.
Applying the Value Proposition Canvas to Vanmoof’s E-bikes
Who is their Ideal Customer?
- Describe the Customer: VanMoof’s primary customers are urban dwellers, environmentally conscious, aged between 25-45, who appreciate technology and design, and are looking for efficient, sustainable alternatives to commuting in congested city traffic.
- Define the Jobs: Their jobs include commuting to work or around the city, reducing their carbon footprint, staying healthy and active, and having a reliable mode of transportation that saves time and avoids traffic.
- Identify the Gains: A good day for these customers means an effortless commute, a quick journey bypassing traffic, contributing to environmental conservation, and enjoying their ride.
- Understand the Pains: A bad day would involve dealing with heavy traffic, struggling with bike maintenance, having their bike stolen, or facing bad weather conditions without adequate preparation.
What is their Key Business Offering?
- Describe the Product or Service: VanMoof released the VanMoof S4 and X4 for the commuter and leisure riders. It features the same tech but with a focus of bringing joy back into the customer’s rides.
- Identify Gain Creators: The e-bike’s electric assist feature ensures an effortless ride, while the anti-theft technology and built-in lights provide security and safety. The high-tech, sleek design meets the customer’s job of being perceived as trendy and environmentally conscious.
- Identify Pain Relievers: The e-bike’s durable build and the company’s customer service reduce maintenance worries. The anti-theft technology addresses the pain of potential theft. The electric assist feature mitigates the challenges of commuting in hilly areas or arriving at their destination sweaty.
The Big Picture: How VanMoof’s E-bikes Meet Client Needs and Wants
- Find the Fit: VanMoof’s E-bikes directly address their customer’s primary jobs, relieve significant pains like theft and maintenance, and provide meaningful gains such as efficient commuting and environmental sustainability.
- Test and Iterate: As VanMoof gathers more information about its customers and refines its offerings (like introducing more powerful motors or better weather-resistant features), it revisits and updates its value proposition canvas to ensure it remains relevant and continuously delivers value.
Best Practices for When You Get Started
- Customer-Centric Mindset: Always start with your customer’s perspective. Their jobs, pains, and gains should inform the development of your products or services, not vice versa.
- Use Empirical Data: Where possible, base your canvas on real, empirical data gathered from market research, customer feedback, surveys, or interviews. If you’re making assumptions and forming hypotheses, validate them through testing and discovery before building features.
- Be Specific: The more specific you are, the better. Avoid generic descriptions of jobs, pains, and gains. The same applies to your products, services, pain relievers, and gain creators.
- Prioritize: Not all jobs, pains, and gains are created equal. Some will be more important to your customers than others. Likewise, some aspects of your product or service will be more valuable than others. Identify with your customers and focus on these critical areas.
- Iterate and Evolve: Your first canvas will not be perfect, and that’s okay. The Value Proposition Canvas is a tool for learning and should evolve as your understanding of your customers and offerings deepens.
Gaining Deeper Insights into Your Customers’ Needs and Expectations
To ensure that you have accurately captured your customers’ needs and expectations, a combination of discovery and research methods can be utilized:
- Customer Interviews and Surveys: Directly ask your customers about their needs and problems. The trick is to ask open-ended questions that allow customers to express their views in their own words and based on existing stories and real-life experiences.
- Observation and Ethnographic Studies: Watch customers interact with your product or service in their natural environment. This can help uncover implicit needs that customers may not be aware of or able to articulate.
- Customer Journey Mapping: This tool allows you to visualize your customers’ steps in engaging with your company, from initial contact to the purchase and post-purchase stages. It’s an excellent way to identify pain points and moments of delight in the customer experience.
- Data Analysis: Analyze data from customer interactions, whether it’s usage data from your app, purchasing data, or data from customer support interactions. This can reveal patterns and trends that indicate customer needs and expectations.
It’s important to note that understanding customer needs and expectations is not a one-off process. It should be a continuous effort, as customer expectations can evolve with changing market dynamics and personal circumstances. By regularly checking in with your customers, you can ensure your value proposition remains relevant and compelling.
Four Strategies for Differentiating Your Value Proposition in a Saturated Market
Let’s dive into these strategies to understand better how they can enhance your value proposition in a saturated market.
- Focus on Unique Strengths: Identity what sets your product or service apart. It could be your technology, people, process, or customer service. Once you’ve identified your unique strengths, emphasize them in your value proposition.
- Understand Your Customer Deeply: Conduct regular discovery and research to keep up to date with customer trends and changes. The better you understand your customers, their jobs, their pains, and their gains, the better you can tailor your value proposition to their needs.
- Create an Exceptional Customer Experience: In many markets, products, and services can be very similar. One way to differentiate your offering is by providing an outstanding customer experience. This includes everything from the buying process to after-sales service.
- Innovate Constantly: Regularly revisit and revise your value proposition to align with the evolving market and customer needs. This practice enables you to innovate your product or service and maintain a competitive edge.
Hitting the Sweet Spot: Iterating Your Value Proposition
Successful value propositions focus on essential customer jobs, pains, and gains and excel at addressing them. Even though your customer profile might encompass numerous jobs, pains, and gains, your value map underscores the ones you intend to tackle.
Every day, businesses put tremendous effort into developing offerings that augment their customers’ experiences. However, customer preferences evolve at lightning speed in today’s dynamic market. What was relevant yesterday may be obsolete today, and this pace shows no signs of slowing down. This continuous change presents a significant challenge to businesses, demanding perpetual innovation and adaptability.
So, it’s time for introspection: What value are you creating? How are you quantifying it? Are you ready to redefine your value proposition, disrupt and innovate?
In this article, I shared one tool I’ve used to help leaders and businesses stay ahead of the curve, enabling them to proactively visualize, design, and test their value creation for customers – the Value Proposition Canvas.
If you’re ready to go deeper, I’m teaching aspiring, new, and experienced product owners the ins and outs of value creation in my upcoming Succeeding with Agile Product Ownership. It’s a cohort-based program designed to empower you with the tools, knowledge, and confidence to improve value creation for your business and customers. Sign up to be added to the waitlist.