Value Proposition

Now that you have a solid understanding of your target customers and their pain points, you need to define your value proposition using the value prop canvas, by evaluating and deciding what needs you are going to address with an MVP.

 
Value Proposition Design (book)

Value Proposition Design (book)

 

A value proposition canvas helps you craft a customer profile of jobs/pains/gains as well as one for your products and services so that you can link the two pieces to see..

3.1 Customer profile - pains & gains

Jobs

Describe what job your target customers are trying to get done. It could be the tasks they are trying to perform or complete, the problems they are trying to solve, or the needs they are trying to satisfy.

 
jobs.jpg
 

Pains

Describe the negative emotions, undesired costs and situations, or risks that your customer experiences before, during, and after getting the job done.  Rank each pain according to the intensity it represents for your customer from very intense to very light. For each pain indicate how often it occurs.

pains.jpg
 

Gains

Describe the benefits from using a product that your customer expects, desires or would be surprised by. This includes functional utility, social gains, positive emotions, and cost savings. Rank each gain according to its relevance to your customer. Is it substantial or is it insignificant? For each gain indicate how often it occurs.

gains.jpg
 

3.2 Value map - products

Products & Services

List all the products and services your value proposition is built around. What products and services do you offer that help your customer get a functional, social, or emotional job done, or satisfy basic needs? Rank all products and services according to their importance to your customer. Are they crucial or trivial to your customer?

 
 

Pain Relievers

Describe how your products and services alleviate customer pains. How do they eliminate or reduce negative emotions, undesired costs and situations, or risks your customer experiences or could experience before, during, and after getting the job done? Rank each pain your products and services eliminate according to its intensity for your customer. Is it very intense or very light? For each pain indicate how often it occurs.

 

Gain Creators

Describe how your products and services create gains for your customer. How do they create benefits your customer expects, desires or would be surprised by, including functional utility, social gains, positive emotions, and cost savings?  Rank each gain your products and services create according to its relevance to your customer. Is it substantial or insignificant? For each gain indicate how often it occurs.

gain creators.jpg
 

3.3 Mistakes to avoid

Looking at the tool as a single pieces, instead of two separate building blocks

  • There are two distinct elements or building blocks.

  • The circle is the customer profile, which contains only things that can be observed about a customer segment. These things are all outside your direct control.

  • The square is your value map, and contains the things you will design into your value proposition for the customer segment. These are things within your control.

Mixing several customer segments into one canvas

  • Each distinct customer segment has different jobs, pains, and gains.  If you mix the segments, it’s hard to know which segment’s jobs, pains and gains are being observed, and to focus on the highest priority.

  • Rather than mixing profiles, create a customer profile for each segment, one at a time.

  • You can hang multiple value prop canvases on a wall and separate each customer segment into its own canvas.

Creating your customer profile through the lens of your value proposition

  • It is hard to distance yourself from the idea, product, service, or technology you are offering, so it is tempting to fill customer profile with jobs, pains, and gains that revolve around your existing value proposition.

  1. You need to step into the shoes of your customers.  Forget what you’re offering and look beyond what you think your value prop addresses.  Look for deeper motivations. Consider using The Five Whys approach to understand what is really driving jobs, pains, and gains.

Only focusing on functional jobs

  • People often focus on functional jobs, as these are what’s most apparent, while ignoring jobs that are social or emotional in nature such as customers who might be trying to impress their bosses or neighbors, or improve their social standing. The pains associated with social or emotional jobs are often more deeply felt by customers and the gains are usually more ferociously sought.

Trying to address every single customer pain and gain

  • It is unrealistic to believe you can link every job, pain, and gain from the customer profile to the products and services, pain relievers, and gain creators. Attempting to do so will likely result in a value prop that doesn’t do any one thing very well, ultimately leaving customers unsatisfied.

  • The best value propositions are focused on resolving those jobs, pains, and gains that are of the highest priority to customers. You need to make tradeoffs as to which you’ll address and which you’ll forego.

 
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3.4 Critical Assumptions

At this stage it is important to articulate the assumptions that are most critical to your value proposition. Farther along the product market fit journey, we will validate or reject these assumptions, and adjust accordingly. While not exhaustive for every market and model, the list below is a great starting point for articulating assumptions for most businesses.

  • My target customer will be ________.
  • The problem my customer wants to solve is ________.
  • My customer’s needs can be solved with _________.
  • My customer can’t solve this today because ________.
  • The measurable change my customer wants to achieve is _________.
  • My primary customer acquisition tactic will be _________.
  • My earliest adopter will be _________.
  • I will make money by __________.
  • My primary competition will be _________.
  • I will beat my competitors by __________.
  • My biggest risk to financial viability is __________.
  • What assumptions do I have that, if proven wrong, would cause this business to fail?
 

3.5 Formulate hypotheses to test critical assumptions

A hypothesis is a simple, educated guess for what you expect to happen in a given experiment. Hypotheses are similar to assumptions, but more specific. Hypotheses should include an “if, then” statement plus a numeric target. 

Example: If we provide in-person mobile phone literacy training in two villages, then 25 percent of smallholder farmers in those villages will download and use our app.

Before you build and test a minimum product, it is helpful to reframe each of your critical assumptions as a hypothesis that can be tested and measured through lean experiments.

Before we approach building and testing a minimum viable product (MVP), it’s helpful to reframe each of your critical assumptions as a hypothesis that can be tested and measured through lean experiments.  The framework below can help to guide your reframing of assumptions to hypotheses: 

The framework below can help you reframe assumptions as hypotheses:

IF we provide _________ (solution details), THEN _________% or _________ (a number) of our target customers WILL _________(what specific behavior will take place in response)_________.