What is the Value Proposition Canvas?

The better we know our clients, the better services we will provide, the better website we will design, or the better marketing messages we will write. What does it mean to understand your clients? It means knowing your client’s needs, behavior, habits, pains, beliefs, etc. That is why you need to conduct client research and analyze data.

Unfortunately, only a few articles describe a couple of marketing methods of client research, but these methods could be more accurate and less costly. In this article, I describe one of the most effective methods of client research that I have used for years.

What is the Value Proposition Canvas (VPC)?

The Value Proposition Canvas is a tool that can help ensure that a product or service is positioned around the customer’s values and needs.

Dr. Alexander Osterwalder developed this framework to help business owners and marketers. 

The main advantage of VPC is the ability to visualize and test how your product, service, or solution creates value for customers and satisfies their needs. 

This marketing method differs from traditional marketing research techniques. Why not use well-known marketing research techniques? 

Customer research is a set of methods for identifying clients’ needs, preferences, behaviors, and motivations. Most marketing research techniques require knowledge, skills, and resources. That is why business owners often outsource customer research to specialized marketing companies.

Usually, marketers suggest using these methods:

Marketers describe surveys as a simple and quick method of client research, but this is different.

In many cases, people have no clue which needs they have and which problems they need or may need to solve. So, these people can’t answer the survey questions, which is why many marketing specialists think people are dishonest.

In some cases, interviews help go into the client’s details because you have one-on-one conversations with your clients. But the problem is the same. People are still unaware of their individual needs and demands.

Sometimes focus groups are very well at testing new products, ads, and brand messages. But using this method doesn’t help you understand the needs and behavior of your customers because focus groups are biased and usually provide a motivated answer.

It seems just a glance at the analytics dashboard, you’d know how clients engage with your product, company, or website.

The irony is that clients don’t know what they want or why. The client’s tracked behavior doesn’t mean the actual behavior, and the client wants to behave this way.

As you can see, the main problem with all marketing research methods is they can’t provide clear answers to business owner questions. It is difficult to interpret data when you have no clue where clients were honest, and there they weren’t. 

As David Ogilvy wrote, ‘The trouble with market research is that people don’t think what they feel, don’t say what they think, and don’t do what they say.’

In other words, we all need different tools to provide our customers with the best product or service. The Value Proposition Canvas seems like a good solution because it allows us to build relations between customer needs and product values and test them.

Compared with traditional customer research methods, the Value Proposition Canvas makes many things more transparent. How does it work?

The Value Proposition Canvas focuses on the customer profile and value proposition. The primary purpose of the VPC is to help you find a match between your product’s value proposition and your customers’ needs, wants, and challenges.

Customer jobs are tasks or problems that the customer wants to solve. There are there types of customer jobs:

• Functional jobs are specific tasks, for example, managing purchase orders, creating presentations, ordering logistic services, etc.
• Social jobs are part of our societal role, motivated by mass culture and our societal duty. For example, buying an electric car may simultaneously mean our concern for the environment and high social status.
• Emotional jobs are about a broad palette of feelings, like safety in a new house.

Customer pains or roadblocks are negative factors that stop customers from completing a job. Also, pains are risks and adverse outcomes that customer wants to avoid. For example, a customer should pass the registration procedure on an online store, so purchasing from the website may take a lot of effort. Additionally, a customer may worry about the personal data that the online store collects. That is why many online shops simplify the registration procedure.

Customer gains are positive outcomes that customers try to achieve by completing a job. There can be multiple types of gain:

• Required gains are gains that are essential for a solution to work. For example, delivery of the goods to the buyer is a required feature for any online store.
• Expected gains aren’t required gains, but customers expect to get that. For example, if a company provides a SaaS product for businesses, potential customers expect a free trial version of the product.
• Desired gains are outcomes customers would like to achieve by using your product or services. For example, SEO services can improve a company’s reputation, and customers desire this outcome.
• Unexpected gains are benefits customers do not expect, but these outcomes can delight them. Usually, unexpected gains come from identified ‘untold pains’ or hidden needs.

Features

Create a list of features your product or service provides to customers. These features must help customers to solve their tasks. What do potential customers of auto body shops want to see? First of all, it is the list of services. That is why web designers added the TOTAL Collision & PDR services on the home page, and potential customers can see how the company can help them with car repairs.

Pain relievers

Which pains do auto body shop clients face? In fact, there are many pains that customers would avoid. We studied in detail typical client complaints to define negative factors. That is why web designers added testimonials and links to customer review sites. Also, web designers added information about certification and the ‘Why us?’ block to present the high qualification of auto body shop staff.

Gain creators

List everything that adds value to customers and improves their experience. It is an excellent idea to prioritize gains. For example, we defined one ‘untold’ pain. It turned out that many people can’t describe the extensiveness of the damage to the car, and it makes it difficult to estimate the cost of car repair. So, we developed a feature that simplifies this process. Potential customers can use their smartphones to take a few photos of the damage and upload them to the website. One of the company’s customer service representatives will reach out with a price quote and schedule repair. This unexpected gain creator increases the number of customers because potential customers get an accurate car repair estimate and schedule faster than other autobody shops.

Using the Value Proposition Canvas

There are plenty of spheres and business goals for which the Value Proposition Canvas can be used. At Predola Studio, we use the Value Proposition Canvas for the User Experience design of websites. 

As you can see, this technique is simple enough and does not require specific knowledge and skills compared to other marketing research techniques.

Create customer profiles

Put yourself in your customer’s shoes to create the profiles of your typical customers. Usually, a company attracts different customer segments, not only one customer segment. 

You can use other techniques instead of costly and less effective traditional customer research. For example, use visualization. You can visualize the customer experience and customer journey to understand the customer’s jobs, pains, and gains. Reading forums, social media posts, and profiles helps plunge into customers’ minds.

Create lists of jobs, pains, and gains and prioritize them. Pick essential pains and gains related to the most critical jobs. You define the customer segment’s most critical pains and gains in this way.

Create value proposition

Please list the product or service features (they help customers to do the jobs), pain relievers, and gain creators. Pick the gain creators and pain relievers that make the most significant difference to your customer.

Analysis

Link the features, pain relievers, and gain creators to the pains, gains, and jobs they solve. Now you can analyze your Value Proposition Canvas. For example, you can compare your product or service to competitors to define how you are better or worse.

Define customers’ jobs, pains, and gains your product or service does not solve.

Remember that social and emotional jobs can be more critical than functional jobs.

Benefits of using the Value Proposition Canvas

Entrepreneurs and startupers may use the Value Proposition Canvas to create new products or services. Business owners may use the Value proposition Canvas to improve products and services, enter a new market, and test the product-market fit. Marketers may use the Value proposition Canvas to create marketing messages and enhance content marketing and the company’s social media marketing.

The main benefit of the Value Proposition Canvas is visualization. Using lists, you can see how product features fit customer jobs, identify pains that can be used to improve products or services, understand how to increase customer satisfaction, and many other things that can help you to get ideas. 

Also, you can test your marketing hypotheses. For example, you can test how your product features fit different customer profiles (customer segments). 

Using the Value Proposition Canvas will help you create more benefits and a positive experience for the customers cost-effectively.

Conclusions

The Value Proposition Canvas could be better, but it is one of the most helpful marketing tools you can use to achieve your goals. It visualizes problems and solutions. It helps generate breakthrough ideas that can set your business apart from the competition.