What is the Value Proposition Canvas
The Value Proposition Canvas is a marketing tool that was created to be a simple way for innovators to assess the likelihood of whether this idea has a customer segment in which their product delivers value. Without the use of the value proposition canvas it becomes difficult to evaluate specific customer segments and determine whether a business idea can become reality.
The Value Proposition Canvas helps to systematically understand what customers need in order to complete a job and helps creates products and services targeted at filling the customer needs. It collects customer information in a simple way and allows for a more effective design of a business models which will eventually lead to greater profits.
Breaking it Down
The canvas itself is broken into two categories, ‘Customer Demands’ and ‘Value Creation’, each with three subcategories. The first of the two main areas is the customer profile, which is made up of three subcategories, customer jobs, customer gains, and customer pains.
The first area assessing ‘Customer Demands’ is listing the customer jobs. Within this section all the jobs that the customer segment wants to get done which require help are listed. A customer job can be any task they are trying to complete, the problems they are faced with or the needs they are working to satisfy. This will show an organisation whether their product is aligned with the jobs the customers need assistance with. For a researcher and a research organisation this can help identify important areas of research need.
After the jobs that need doing have been identified the next step is to pinpoint the pains which prevent or make these job difficult. The pains are anything that make getting a job done difficult or prevents them from getting the job done at all. In this section, risks that allow room for potentially bad outcomes may also be identified and included. Understanding the pains that the industry is experiencing, this can assist research and research organisations to better target proposals to ensure that they reduce or eliminate the pains completely.
The final focus for the customer section of the canvas is to identify the gains which the customer will receive from purchasing this product. Gains describe the outcomes and benefits your customers require, expect or desire and can include functionality, social gains, positive emotions and cost reductions.
The second area of the canvas, Value Creation, covers the product that may be the outcomes of a research investment. Value Creation is divided into another three subcategories. Product and service, gain creators and pain relievers that when used together make it easier to identify how to fulfil the needs and desires of the customers. Within the section, product and service, all products and services which your value proposition is build around are listed. This can include any supporting products and services that help the customer perform the roles of the buying. For a researcher, this could be list of outcome of any research conducted or the products they have invented. These can be listed as primary products/services and secondary outcomes.
After this has been done the next step is to list all the ways in which your product or service and relieve the pains the customers experience. The pain relievers outline how you intend to eliminate or reduce some of the pains that annoy your customers before during or after a job. Generally a great value proposition will only relieve a few pains but will do it very will.
The final step of the canvas is to list all the gain creators your product or service will offer. Gain creators describe how your product will create the gains the customer desire. This section outlines how your product intends to create the benefits that your customer needs.
In assessing a planned research investment, the simple presentation for the value proposition canvas can be very powerful in aligning planned activities to end customers needs. By expressing the canvas in a structured and visual manner, it immediately becomes clear how the value proposition of the services or products can be adjusted to match the requirements of the customer. The value proposition canvas also works in conjunction with the Business Model Canvas to guide your business idea into a profitable enterprise.