The value proposition canvas is straightforward: the product or service you provide adds value to a customer’s life. But how does it achieve this? How do you figure out what that product or service is and how it looks – by using the Value Proposition Canvas as a tool.
The Value Proposition Canvas is a new tool that will help you clarify these answers and differentiate yourself from the competition.
It can assist you in framing your value proposition in a way that makes it apparent to both consumers and investors what differentiates your firm from the competition.
What exactly is a value proposition canvas?
The inventor of the Business Model Canvas and co-author of Business Model Generation with Yves Pigneur, Alex Osterwalder, devised the Value Proposition Canvas as another “canvas” tool.
It breaks down the difficulty of determining the value proposition into separate sections, much like the Business Model Canvas. This allows a person or team to take care of each component one at a time.
This tool appears to be a plain paper sheet with a large leftward square and a rightward circle. The client segment canvas and the value proposition template generate a geometrical collage.
They are supposed to convey a knowledge of what features and functionalities a product should have to suit the needs of a specific user group. That’s all there is to it. Let’s take a closer look at the individual components.
Related: The Key Resources of a Business Model Canvas: A Step-by-Step Guide
What are the advantages of using the Value Proposition Canvas?
A company model must have a Value Proposition Canvas. It is more than simply a visual depiction of what customers desire. It aids the firm in decision-making and product positioning.
Businesses may tailor their strategy to meet the demands of their customers. This can aid in the production of a product that buyers desire. Let’s look at the most crucial benefits of the Value Proposition Canvas.
With fresh ideas coming in every minute, it’s easy to lose sight of what’s essential. As a result, the generated product falls short of the customer’s expectations. This is not what you want to happen. A Value Proposition Canvas serves as a visual aid. It guarantees a focused approach to generating a high-demand product.
Enhances Marketing Outreach
Launching a new product necessitates a significant amount of marketing and branding work. It entails telling clients about how purchasing the goods would meet their demands. This contributes to forming a strong brand image in customers’ eyes. Customers quickly know the brand for the quality and service it provides. A Value Proposition Canvas is a handy tool in this situation. It recognizes client demands and creates a plan of action to address them. With this in place, marketing and advertising may easily attract customers’ attention.
Customer Involvement Is Extremely High
Customer centricity is essential for engaging customers with your brand and product. Customer happiness is the most crucial component in product creation while using this strategy. A Value Proposition Canvas connects the identification and satisfaction of needs. The advantage of this structure is that it allows you to concentrate on the aspects that clients appreciate the most. As a result, there is a high level of consumer interaction.
Practical & Simple
Customer Value that is Practical and Simple Canvas provides a simplified picture of the business’s capabilities. Analyzing product strategy and performance becomes comprehensive while remaining easy.
Structure of the Value Proposition Canvas
It appears to be nothing more than a sheet of paper with a leftward square and a rightward circle on the ground. These two shapes symbolize the value offer and the consumer, respectively – both aid in understanding your market’s wants and how you may best meet them. Let us now go through this in further depth.
Traditionally, the introduction to the canvas begins with the right portion of the canvas that is in charge of the client profile. The circle is divided into three sections in which you must specify the duties and expectations that the consumers will fulfill and the good and bad experiences linked with them. You are no longer dealing with the product but with the end-user is experiencing.
Customer jobs on the value proposition canvas contain various duties, issues, or desires that customers are expected to deal with, solve, or fulfill. This refines the client segment from an emotional (preferences, popularity), social (reputation, sense of obligation), and functional (practicability) standpoint.
Based on the information provided above, you may determine what adverse outcomes or experiences may be connected with the stated employment. Because the impression of a poor experience varies by user category, it is best to cover as many hurts as feasible.
It’s the same with excellent consumer experiences. You should remember that pains and benefits are not opposed concepts. They might be entirely existential and devoid of any remarkable qualities. In other words, gains should include items that make customers happy or even delighted, rather than simply being the inverse of problems.
You try to read your clients’ minds in the value proposition canvas customer profile. It’s not so much about telepathy as it is about knowing why people want to perform specific activities, what causes the bad experience, and how to surpass their expectations.
Let us now travel to the left to fill up the square where the value proposition map is presented. The product-related portion is separated into three segments, similar to the circle.
We’ll be dealing with the merchandise in this section. They relate to the relevant section of the client profile. The emphasis is on the features, functionality, and benefits that it may provide to attract clients and satisfy their needs from the appropriate area.
- Goods and services
You can specify the product itself and its variants such as premium, standard, etc. This area should not contain a list of features your product will have. Concentrate on what you can provide to help the consumer complete their tasks.
This component of the value proposition model is in charge of your product’s capacity to solve the identified pains.
It is not essential to detail how the pain is reduced. A simple statement of truth that diminishes the current irritation with the task would suffice.
- Gain makers
This field is a reflection of the one above it. The value proposition canvas gain creators should explain the additional value that your product will bring to buyers. It’s similar to the unfair advantage area of the lean canvas.
You may also find thin canvas examples of unicorn firms like Amazon or Airbnb during their bootstrapping phase. The goal is to provide something fresh and different to make the customer’s experience better and more enjoyable.
Why is the value proposition canvas important? The use of canvas may be ineffective.
The tool does not uncover any significant traits that may be considered a drawback. This implies that the canvas can only harm if utilized incorrectly. Here are some examples of incorrect use.
Canvas differentiation is lost
The tool comprises two pieces, which we’ve already discussed. Despite their interdependence, each component is a distinct entity. The details to define in the circle and square are distinct.
Those on the right are problems you can’t change, while those on the left are things you can improve. The most common mistake with the canvas is not distinguishing these pieces and working with them as a single canvas.
An overabundance of consumer segments
If you paid close attention to Railsware’s video on the value proposition canvas for Uber, you’d note that we only looked at one consumer category — passengers. Another one dealing with drivers should be examined on a different template.
It is also feasible to limit the section by age, socioeconomic standing, interests, etc. If that’s the case, you’ll need to create distinct canvases for each type of user. A common blunder is combining all of them into a single chart. You make it more challenging to identify the essential duties, hurts, and gains. As a result, the left portion will be misfocused, and the value of your goods will decrease.
Incorrect method of filling
The filling sequence is essential, as is the method you fill in the value map. When you do it from right to left, you establish your product’s values to be in demand.
The right side of the canvas is independent of the left side, which seeks to achieve as many matches with consumer profile concerns as feasible. If you take the contrary approach, you will most likely fail to learn what your clients genuinely require.
Value Proposition Canvas is a new tool for differentiating your company. It is a method of defining what makes your company distinctive and why your consumers should select you. The following steps will enable your company to construct its Value Proposition Canvas, which will assist you in communicating the value of your product or service.