Every business relies on the needs of the customer. A successful business is one that can fulfill those needs. Most of the time people think of it as a tool to create new products and use it to find a market that befits it. This perception is not 100% true. The Value Proposition Canvas is also useful for products that have occupied the market for a long time. The Value Proposition Canvas was created as an alternative to Osterwalder’s Business Model Canvas. While working on the Business Model Canvas template Osterwalder came to notice that people were unable to find a match between the customer segments and the value proposition for the brand. It was then that he developed other tools on the sidelines of the Business Model Canvas. This came to be known as Value Proposition Canvas template and could be used for determining that exact match.
The Value Proposition Canvas is used when a business wants to launch a new product in the market or refine the offering made by the business for its existing product or service. The Value Proposition Canvas is built using the Customer Profile and the Value Proposition of the business.
This part of the Value Proposition Canvas is targeted to define what the customer needs. All the benefits that the customer needs from the said product or service, what makes the customer happy, and what makes increase the chances of adopting a value proposition are termed as the Gains in a Customer Profile. The second part is the pains that lists out all the negativity that the customer comes up with while dealing with the said product or service. The third part is the Customer Jobs. Customer Jobs are the tasks the customer is trying to perform including social, emotional, and functional.
This is the second part of the VPC and deals with the Products and services offered by the business. Gains in the VPC highlight the way the product or service maps to the customers’ gains by offering benefits to the customer. On the other hand, pains are those factors that cause the customer to think of not purchasing the product or service. The section Pain Relievers deals with such pains and how to get rid of them. The third section Products and Services lists out all products and services which the business targets towards the customer. These products or services can cause gains or pains to the customer.
Now that you know about the components of a VPC and what they mean, it is time we moved on to finding a solution that would best fit your plans to launch the new product or service or even promote an existing one with the customers in the market. This is the last step in a Value Proposition Canvas template. According to the value proposition canvas definition, a business aims to achieve a 100% fit between the value proposition and the customers’ needs. However, this is a misunderstanding. Achieving a 100% is not possible. If any business says that it has been able to do so, then the business is not only lying to the customer but to its own self as well. Such a condition is possible only when the business is providing wrong data to the Value Proposition Canvas.
Considering the customers jobs, pains and gains the fit that can be achieved will lie somewhere between 50-70%. If you achieve this ratio, then you have studied the customers’ needs well and understand the areas that require your attention. Ensure that the customer is never in doubt about your capabilities to deliver according to the needs of the customer. While trying to achieve this fit see to it that there are no such Gain Creators which can cause Customer Pains. Some Pain Relievers can also cause Customer Gains which is not a matter of worry. While building the VPC just don’t put all your focus on any one side of the VPC, provide equal attention to both.
Let us consider an example.
The main purpose of a Value Proposition Canvas is to help the business judge whether the products, services, and the features they provide to the customers will satisfy them or not. If the Customer Profile matches the Value Proposition, the business gets a FIT solution. In case it does not match the outcome of the VPC will be an UNFIT solution.
In the example below a customer is searching for a vehicle that can take him long distances, has some charging options, and advanced features built into the car and also wants a warranty for the battery. Add to this the brand name. There are two options that have been provided. The first turns out to be UNFIT while the second one is a FIT solution. Check out why.
A customer requires to travel long distances very often and remain different from others also. The vehicle he uses does not have enough charging points, and luggage space as well. He wants a car with a durable battery, a known brand, and has good interior ergonomics.
A Value Proposition Canvas is an alternative to the Business Model Canvas of Dr. Osterwalder. While working on the Business Model Canvas he noted some discrepancies which he wanted to remove and as such developed the VPC. The VPC consists of two parts, one that describes the pains and gains of a customer, and another that describes how to create gains and remove pains that come with the product or the service. The VPC is not meant for only new products or services but can also be used for existing products and services.