Creating Your Value
Proposition
Just like they did with The Business Model Canvas, Alexander Osterwalder
and Yves Pigneur and their co-authors created a really good approach,
The Value Proposition Canvas, in a 2014 book, Value Proposition Design
published by John Wiley and Sons.
In a nutshell, a value proposition is a clear statement that explains
the most important problem your product or service solves, or the most
significant improvement is makes to a client situation. Furthermore, it
should clearly state why your ideal customer should turn to you and not
someone else.
A value proposition answers the question for whom and how and why is it
useful. It offers up concrete and valuable results customers care about
and explains why it is different and better than alternatives offered up
by competitors. It should be the main thing customers remember when they
see it prominently positioned in all marketing collateral from web sites
to brochures to advertisements.
A value proposition expresses the connections between what you offer and
customer's goals. Understanding exactly how people believe your product
will help them is necessary if you want to sell it to them. If you do
not have this understanding, you can guess what people expect and hope
for. Having a strong, refined value proposition gives you clarity and
confidence to move forward and mitigates a lot of market risk.
The objective, or end state, is to create a short, simple and memorable
set of statements that tells your customer what you offer, how it helps
them, and why they should buy it from you.
The Canvas was released under a Creative Commons License to encourage
its adoption and looks like this.

First off, the notion of a Value Proposition is nothing new. Just like
their Business Model Canvas is a way to present a clear picture, the
Value Proposition Canvas neatly summarizes what you want to present to
your customer as a bundle of benefits.
Just like the Business Model Canvas, you start with what you think is
important, and you fine tune it based on discussions with potential
clients so that you end up with what customers really value which you
can then emphasize.
Like developing the Business Model Canvas, the Value Proposition Canvas
is a means to organize questions and answers that lead you to a clearly
articulated value proposition. remember it is all about testing your
assumptions by having conversations with ideal clients and asking them
questions.
The Value Proposition canvas has two parts.
One profiles the customer in terms of what they try to achieve with your
kind of product. The other side looks at your bundle of goods and
services and highlights what gains you create and pains you alleviate.
You use questions and discussions to uncover what you want to know and
use what you learn to fine tune your offering and your message. The
canvas looks the customer and your bundle and works toward aligning the
two so that you actually offer what a customer really wants, expressed
in clear terms they can easily understand.
It starts with a Customer Profile and what they call Jobs. What is the
customer trying to get done and how important is it to them? It could be
a problem you can solve, a task you can do for them or satisfying a need
they have.
It goes on to talk about Gains. What outcomes\benefits do they want?
More money, convenience, status, enjoyment, relaxation?
It also looks for Pains. What what problems, risks, obstacles do they
face? How severe are they? Are they facing any undesired outcomes
or obstacles? What do they worry about? Is there anything that keeps
them up at night?
You also want to know how they measure success, failure, quality, and
performance, and what would make them more\less likely to decide to buy
from you. Do they stress cost, quality, performance, outcome, some
specific feature?
Moving to the left side, you are trying to learn more about how your
bundle of products and services deliver the gains and pain avoiders your
customers value. You also want to learn how you can best show them you
we are worthy of doing business with them and what barriers exist that
prevent them from adopting your solution.
You can find out more about gains by asking the following kinds of
questions:
What savings in terms money, time, effort do they value?
How obvious, necessary, imminent, urgent, critical is the need?
What happens if they do nothing?
What quantity, performance, quality do they expect? Want more of? Can
accept less of?
What in your bundle delights customers?
What do you do that makes them look good, feel good, enhances their
image?
What dreams and aspirations can you realize for them?
What required, expected, desired and unexpected gains can you offer?
What alternatives are there out there that offer the same gains?
What gains do we provide that are better, different than our competition?
How much more or less do they value these differences?
How can we best show you we are worthy of delivering on the promise of
gains?
You can find out more
about pains by asking these kinds of questions:
What makes customer feel bad, frustrated, annoyed?
What are their main difficulties and challenges?
Could they be facing losses of key items of value?
What mistakes do they commonly make?
How does customer define “too much”?
What keeps them awake at night?
How does what you propose\do alleviate this?
What alternatives are there out there that alleviate the same pains?
What pains do we alleviate better, differently than our competition?
How much more or less do they value these differences?
How can we best show you we are worthy of delivering on the promise of
alleviating the pains?
The above set of
questions is by no means exhaustive. It is very general so they should
be tailored to the situation at hand and augmented to ensure it fits
with the specific customer\customer segment and your bundle of goods and
services.
The important part of the exercise is to learn and make any necessary
changes to your offering and your message. This message should be
framed in terms of who the customer is, what they are trying to achieve,
and what only you can do for them. It could look like this:
Who is it for?
What is\are the key gain\pain(s) you address?
Name\describe your product and its key benefits
Why is it unlike other value propositions
It can also be phrased as simply as "We help {customer} do {job}
{benefits} and {key differentiators}
In any case, the value proposition must resonate with the client "job",
clearly show you as the superior alternative, and engender trust you
will deliver the promise.
The advantages to you of going through this exercise are manifold.
You end up with a simple, clear list of the few things that really
matter expressed in terms your customers uses. This allows you to focus
on aspects of your business and initiatives that make the biggest
difference. You’ll know exactly what to offer and say meaning you waste
less time and money trying to persuade customers to do business with
you. Done right, you will provide and say exactly what resonates most,
so more money saved by avoiding products and services that won't sell.
I have only scratched the
surface of what is in this excellent book, so I highly recommend you get
it from your favourite book store or go to Strategyzer (see link below).
The book describes the model and provides lots of examples, questions
and ideas that will help you put the Value Proposition Creation Canvas
good use. For the modest investment, you will learn how to best
implement it
If you want to know more about co-author Alexander Osterwalder, follow
him on Twitter, sign up for his newsletter, or hire him as a speaker,
you can do so
here. The canvas is also available
for IOS and Android platforms.
Finally, to get really immersed and gain the most value, this web site,
Strategyzer, commercializes all of Alexander's ideas and
those of his co authors. If you want to join a growing group of serious
users of this model around the world, then you have to sign up for their
on line education and tools.
© 2015 John B Voorpostel CPA, CA, CMB
iaccountant.ca
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