Solve customer problems and meet customer needs through value propositions, each containing a set of products or services that meet the requirements of a specific customer group.
In this sense, a value proposition is the set of benefits that a company provides to its customers:
What value do you provide to your customers? What customer problems did you help solve? What benefits do you get for your clients? What products and services do you offer to each customer segment? Find multiple answers to the above questions, rank them, and generally keep the three most valuable answers.
Usually, there are only 3-5 reasons that push people to you, and they may have more, but a few key ideas carry almost all the weight.
Finally, you need to consider, what are you doing that might cause the customer to choose a competitor or an alternative?
Value proposition design is the most important part of a business model, and the value proposition canvas can help you put it on the ground.
Correspondence between value proposition and business canvas:
The business model canvas is a tool for building entrepreneurial assumptions. Of the nine boxes in the canvas, the two most important parts of the business model are the relationship between the value proposition and customer segmentation.
These two components of the business model are very important and are called product/market convergence points “PMF”.
The value proposition diagram functions like a plug-in to the business model canvas, amplifying the value proposition and user base to describe the user’s interaction with the product in more detail and clarity.
Problems can be clarified by providing a business model-level global picture and detailed diagrams of product/market convergence points.
There is a small story to deduce the use of this tool again, the story has been partially improved, now share with you:
You have a strong network of entrepreneurs in Beijing.
Lao Wang in his circle has made a lot of money recently and bought a villa in Beijing.
Hence everybody expresses dissatisfaction in succession: say good together rush well-off, you bought a house secretly however.
Lao Wang decided to hold a party in his mansion to change his hatred for the rich. However, the party was not successful.
“Oh my God, Lao Wang is so rich that he can only drink coke, not even fresh juice”; “Oh my God, Lao Wang is so rich that he only eats mutton kebabs, or take-out”; “Oh my god…” Lao Wang one face black line: I really can’t, total can’t invite Michelin chef to come over to cook food for you!
Xiao Xie is to do catering, in Beijing there are two do teppanyaki shop, word of mouth is still good.
At the party, he said to everyone: Can we bring the high-quality teppanyaki from the shop to provide catering service for everyone?
Is it a good business to offer a catering plan for a family party if you can?
As it happens, teacher Zhang in the circle is a business consultant, he said to Xiao Xie: you should first think about this thing you do, what is the value of your customers? And then how do you make money?
There is a business tool that can help you analyze this problem.
This tool is the value proposition canvas, which, to put it simply, is: You’re sick, I have medicine, and my medicine is for you!
The goal of the value proposition Canvas is to design key value propositions that align with customers’ needs and behaviors to help them solve problems and create value.
You can use it to gain insight into the needs of your users. It describes how the value your product provides relates to the needs of your customers, and why they want to buy your product.
The ultimate goal is to get entrepreneurs or businesses to offer products that match the market — “PMF” — that match the market needs.
Teacher Zhang said to Xiao Xie: If you want to use this tool, first of all to make clear what your users or customers are?
For example, if you are planning a catering plan for a family party, then your target should be the group of people with big houses, who have more money and higher requirements for quality of life, right?
X: It seems so.
Miss Zhang: The value proposition canvas is divided into two parts:
One section is a “customer profile” that illustrates your understanding of the customer. The other section is a “value map” that describes how you intend to create value for your customers. When the customer profile matches the value profile, you can achieve a fit between the two.
Start by completing the customer profile map, which includes customer tasks, pain points, and benefits.
Simply put, a “customer task” is what he needs to accomplish in what context, and that task should be important enough.
It refers to the behavior that a customer might have before, during, or after the experience:
It could be something they’re trying to accomplish; It could be a problem they’re trying to solve; It could be a need they’re trying to fill. For example, if Lao Wang is going to invite everyone to his house for a party, the food may be more important. You see, Lao Wang didn’t arrange anything delicious today. As a result, everyone made fun of him so much that he didn’t even have to make friends in the future.
Lao wang:…
Zhang continued: Customer tasks can generally be divided into four types:
The first is “functional,” which means solving a specific task, like writing a report or cooking a meal. The second type is “social”, which mainly means what kind of image they want to present to others. The third is “emotional”, mainly to solve their emotional, psychological problems. The fourth is “basic needs”, which basic needs the user is trying to satisfy, such as communication, hunger relief…
Look at Lao Wang, what “client task” does he have to complete?
Small thank nu way: of course is sociality, this ya invites everybody to attend a party, not be for show off rich!
Lao wang:…
Miss Zhang: I don’t think so. The first thing That Lao Wang needs to accomplish is to give us friends who come to the party a good experience, and to improve the social image is the benefit after completing the task, which actually belongs to the benefit part.
Once you’ve identified your client’s mission, look at the pain points.
Pain points refer to the solution customer completing the work, or the customer’s problems in completing the work.
It mainly describes negative emotions, unexpected costs or situations, and possible risks.
What do customers find too expensive? (e.g., it takes a lot of time, costs too much money, requires a lot of effort…) What makes customers feel bad? (Such as depression, annoyance, things that make their head ache…) How does the current solution underperform the customer? (e.g., lack of functionality, performance, glitches…) What are the main difficulties faced by customers? (E.g., understanding how things work, difficulty getting things done, resistance…) What negative social consequences does the customer experience or fear? (e.g., loss of face, power, trust, or status…) What risks are customers worried about? (e.g., financial, social, technical risks or the possibility of serious wrongdoing…) What keeps customers up at night? (e.g., big problems, worries, worries…) What are the common mistakes customers make? (E.g., use errors…) What are the barriers preventing customers from adopting the solution? (e.g., upfront investment costs, learning curve, resistance to change…)
Let’s ask Lao Wang, have you encountered any obstacles in preparing the party food?
Lao Wang: First, I can’t cook. Second, I had no idea where to find a service restaurant to cook in my home.
Miss Zhang: Let me summarize. Lao Wang’s main pain point is that he can’t find catering service for family parties, right?
Now what’s the customer benefit?
It refers to the results the customer wants. Some of them are what customers need and expect, and some of them exceed their expectations and surprise them.
This includes functional utility, social benefits, positive emotions and cost savings.
What savings will satisfy customers? (E.g., in terms of time, money and effort…) What results does the customer expect and exceed his/her expectations? (e.g., quality level, more things, less things…) How does the current solution satisfy the customer? (e.g., specific features, performance, quality…) What would make a customer’s work or life easier? (E.g., flatter learning curve, more services, lower cost of ownership…) What positive social consequences do customers need? (e.g., make them look good, increase strength, condition…) What are customers looking for? (e.g., good design, guarantee, specific or more features…) What do customers dream about? (For example, big achievement, big relief…) How do customers measure success and failure? (e.g., performance, cost…) What increases the likelihood of adopting a solution? (e.g., reduced cost, reduced investment, reduced risk, improved quality, performance, design…)
Let’s ask Lao Wang, what do you want from this party?
Lao Wang: Actually, I just want everyone to have fun here and further recognize me. It’s just that there’s no way to do it in catering.
Miss Zhang: Ok, so for users like Lao Wang, the benefit is to “maintain or enhance their social image”, is that ok?
Xiao Xie and Wang: No problem.
Teacher Zhang then said: that we “customer profile” this part is basically completed.
However, it should be noted that we only choose Lao Wang this customer to ask.
When we start using this tool, we have to define a customer base, which includes a lot of people.
Different people will have different customer tasks, pain points, and benefits, so you need to understand them in detail and rank them in order of importance to see what problems your product or service solves.
Miss Zhang: Now let’s look at the value map, which is divided into three parts, corresponding to the customer profile one by one, namely products and services, pain relief plan and benefit creation plan.
Products and services are a list of products or services that you can offer, like the menu for a customer at a restaurant.
First, list all the products and services around which the value proposition is built.
What products and services do you offer to help a user do functional, social or emotional work, or help him or her meet basic needs?
Products and services can be implemented in two ways:
Tangible (e.g. manufactured goods, face-to-face user services), digital/virtual (e.g. downloads, online recommendations); Intangible (e.g., copyright, quality assurance) or financial (e.g., investment funds, financing services).
Let’s ask Xiao Xie, what products or services do you think you can offer?
X: I think I can prepare the best ingredients and deliver them to your door so that the best chefs can come and cook the best teppanyaki for everyone.
Lao Wang: Why didn’t you say so?
X: You didn’t ask me!
Ms Zhang: To put it simply, Xiao Xie’s products and services are “family party style teppanyaki catering service”.
So what is a pain relief program? This is how your product or service alleviates the pain points of specific customers.
Outline how the product or service creates value. First, describe how the product or service helps users eliminate or reduce negative emotions, unnecessary costs and situations, and risks they may encounter.
Are our products and services… … Generating savings? (E.g., in terms of time, money or effort…) … Make the customer feel better? (Such as killing frustrations, annoyances, things that give them headaches…) … A solution to fix poor performance? (new features, better performance, better quality…) … End customer difficulties and challenges? (For example, make things easier, help them get it done, remove resistance…) … Eliminate negative social consequences experienced or feared by customers? (e.g., loss of face, power, trust, or status…) … Eliminate risks that customers worry about? (e.g., financial, social, technical risks or the possibility of serious wrongdoing…) … Help customers sleep better at night? (E.g., by helping to solve major problems, reduce worries or eliminate worries…) … Limit or eliminate common customer mistakes? (E.g., use errors…) … Removing barriers to customer adoption? (E.g., lower or no upfront investment costs, flatter learning curves, less resistance to change…)
Lao Wang’s pain point is that he can’t find catering service for family parties. What can you do to alleviate his pain point?
X: I think we can advertise in the high-end community and put baidu search ads to ensure that people in need can find us in the high-end community.
Ms Zhang: It’s a solution. Ok, to sum it up, it’s “advertising that reaches high-income groups”. Is this a pain-point relief solution?
X: No problem
Miss Zhang: Then look at the revenue creation plan. How do your products and services create revenue for customers? Specifically, how you deliver results that exceed customer expectations.
How to meet customer needs and expectations to surprise users can be discussed from the perspective of functional utility, social benefits, positive emotions and cost savings?
Are our products and services… … Create savings and satisfy users? (E.g., in terms of time, money and effort…) … Produce the results the customer expects or exceed them? (e.g., better quality level, more stuff, less stuff…) … Duplicates or outperforms current solutions to satisfy users? (e.g., specific features, performance, quality…) … Make your client’s work or life easier? (e.g., flatter learning curve, availability, accessibility, more services, lower cost of ownership…) … Create positive social consequences that customers need? (for example, made them look good, increased strength, condition…) … Doing what customers are looking for? (e.g., good design, guarantee, specific or more features…) … Meet the customer’s aspirational goals? (e.g., help to achieve great achievements, produce great reliefs…) … Produce positive results that meet customer success and failure criteria? (e.g., better performance, lower cost…) … Help simplify adoption? (e.g., reduced cost, reduced investment, reduced risk, improved quality, performance, design…) That’s a question for Shay. What are you going to do about it?
Xiao Xie: First, I provide the best ingredients, such as Hokkaido beef, top-grade caviar, etc. Second, I can provide one-stop services. As long as the customer makes a reservation and provides the venue, all other services can be prepared. Third, I can also provide teppanyaki supporting performance services, so that customers can have a visual enjoyment.
Ms Zhang: To sum up, it’s the top ingredients + the whole set of services + the visual experience, right?
X: Well, yes
Mr Zhang: In that case, we can draw a value map. Combining the value map with the customer profile basically gives us our value proposition canvas.
Miss Zhang: Finally, we should consider whether the value map and customer profile fit.
The goal of fit is to verify that you can address the customer’s most important issues. The result is to align the product and service with the customer’s work, pain points, and benefits.
We have basically agreed with the above discussion, but in fact, it is only a very simplified model. When it is used in reality, there are many elements in the value map and customer profile, so we need to verify whether they are in agreement one by one.
Fit generally has three stages:
The first stage is where your value proposition addresses your definition of customer work, pain points, and benefits. This is problem-solution fit. The second stage is when customers respond positively to your value proposition and your value proposition is well received by the market. This part is product-market fit. The third part is you need to be profitable, which is the business model fit. X: I see. I’ll go get ready and test the water first
Lao Wang: Ready, I will be your first customer, and invite everyone to eat again at home…
X: Ok, boss
conclusion
Value proposition design is a never-ending process, and you need to constantly update your value proposition to make it relevant to your customers.
Author: Sir Wei, public account: GANI Business
This article is originally published in Nuggets by @GANI Business. Reprint is prohibited without the author’s permission