The Value Proposition Canvas: Know your customer

If you have read the blog about the Business Model Canvas, you might have seen that there was a section mentioned called Value Propositions. As a tool to support you in creating your Value Proposition Alexander Osterwalder designed the Value Proposition Canvas.

Same as with the Business Model Canvas the Value Proposition Canvas is your one-page roadmap to developing, analyzing, and refining not the whole business model but the Customer Segment you are targeting and the Value Proposition you are offering to this segment.

The Canvas offers you a template divided into the following two main sections while each main sections has three sub areas:

Value Proposition:

• Products & Services
• Gain Creators
• Pain Relievers

Customer Segment:

• Gains
• Pains
• Customer Job

The Following descriptions for those areas shall support you with designing what Value Proposition you are offering for what Customer Segment. Also if you like having your Value Proposition written down in good old paper, I have created a book (Value Proposition Helper) which contains the mentioned following descriptions and gives you the space to write down your Value Proposition.

Customer Segment

Definition:

Here you describe a specific Customer Profile for which you want to provide the later stated Value Proposition. It is recommended to create a Value Proposition Canvas for every Customer Profile you want to address.

The Area is divided into the following three parts:

• Customer Jobs
  • What are the “Jobs” your Customer wants to accomplish
  • These can be functional, social, or emotional jobs
• Gains
  • What are the desired outcomes, benefits, and values your customers seek?
• Pains
  • What are the frustrations, annoyances, risks, and obstacles your customers face when trying to get these jobs done?

Examples for the three parts of the Customer Segment using an Online Course are:

• Customer Jobs
  • The Customer wants to learn something
• Gains
  • The Customer is location independent
  • The Course is repeatable
  • The Course is often cheaper than for example hiring a Coach or something similar
• Pains
  • The Quality of the Course is maybe not sufficient

Value Proposition

Definition:

Here you describe what Value Proposition you are offering for this specific Customer Profile.

The Area is divided into the following three parts:

• Products & Services
  • What are your Products & Services to address the specified Customer Profile
• Gain Creators
  • How do you support or even strengthen your Customers Gains
• Pain Relievers
  • How do you relieve your customers Pains

Examples for the three parts of the Value Proposition using an Online Course are:

• Products & Services
  • The Product or Service is a Online Course
• Gain Creators
  • The Course is affordable
  • The Course is time independent available via the Internet
  • Customers can watch the Course several times
• Pain Relievers
  • The Course is held/recorded by an experienced Teacher

How to Use the Canvas

1. Identify Your Customer Segments: Who are you trying to serve?
2. Map the Customer Profile: Understand your customers’ needs, frustrations, and desires.
3. Create Your Value Proposition: Design products and services that address your customers’ pain points and create gains.
4. Test and Iterate: Validate your assumptions by testing your value proposition with real customers.

Benefits of Using the Value Proposition Canvas

• Customer-Centricity: It forces you to focus on your customers’ needs and desires.
• Clarity and Focus: It helps you define your value proposition clearly and concisely.
• Innovation: It encourages you to think creatively about new solutions and opportunities.
• Effective Communication: It provides a visual tool to communicate your value proposition to stakeholders.

Conclusion

Defining your Value Proposition and your Customer Profiles adds an important puzzle piece to your overall Business Plan. By using the Value Proposition Canvas, you can create products and services that truly resonate with your customers, leading to increased customer satisfaction, loyalty, and ultimately, business success.

Here is a page with some examples of how to fill out the Value Proposition Canvas

Value Proposition Canvas Template and Examples – Step-by-Step Guide]

Here is a enhanced Value Proposition Canvas Template for you to download: