Value Proposition Design

Summary Written by Kate Cadet
"In today’s hypercompetitive world, customers are surrounded by an ocean of tempting value propositions that all compete for the same limited slots of attention"

- Value Proposition Design, page 58

The Big Idea

Knowledge really is power

"Step into your customers’ shoes."- Value Proposition Design, page 23

Whether you are a start-up or an existing business, correctly defining your customer segments will help you and your business stakeholders better understand what is most valuable to a customer.

Of course it’s tough knowing and appreciating what matters most to customers if you aren’t prepared to step into their shoes. Daunting as the step seems, using the recommended Customer (Segmentation) Profile is an easy tool for understanding customers in a way that allows you to experiment and evolve ideas within the everyday business context.

The Customer Profile is a 3-segment visual map to help you plot and understand the jobs (personal or work related) that your customers are trying to achieve on a regular basis, while identifying the most advantageous and undesirable benefits or attributes, referred to throughout the book as “pains” and “gains”, customers look for in products and/or services that will help get their tasks done.

Suggested “trigger questions” lists within the Canvas chapter also help with creative thinking as you set about creating your first Customer Profiles. You and your team members will soon be ranking the most important and insignificant specific “gains” or “pains” customers may be facing by asking questions like:

  • “What are the main difficulties and challenges our customers encounter?”
  • “What would make our customers’ jobs or lives easier?”
  • “What risks do customers fear?”
  • “How do our customers measure success and failure?”

In a written context using the authors’ example profile of a “Business Book Reader”, segmenting this potential customer type with the Customer Profile tool revealed the following key insights:

  • Business book readers largely undertake the “job” (task) of reading.
  • To improve their skill set and advance their careers – a “gain”.
  • That being stuck in a career or jeopardising one is a “pain” that ranks highly for this customer group.

Therefore, a proposition to write a business book that is easy to use leads to results and helps communicate and sell ideas internally would be valuable to a potential business book customer.

Insight #1

Lightbulb moments

"The process is iterative rather than sequential."- Value Proposition Design, page 62

The Strategyzer Team practice what they preach. You can’t help but like advice that is both practical and credible. The value proposition for the book itself has been inspired, tested, re-modelled and finally created using all of the instruction they impart, page after page.

It becomes clear however, that the job is not done and dusted once you have profiled your customers; the real opportunity to take back to your teams is a system that enables you to identify the value your proposition can really offer them; understanding that to remain relevant, you must continue to nurture and evolve the “fit” of your products and services to match customer needs.

Before you design your value proposition, however, take the time to review ten of the characteristics that make great value propositions outlined in the book:

  • Great value propositions are embedded in all great business models.
  • They focus on the jobs, pains and gains that matter most to customers.
  • They focus on unsatisfied jobs, unresolved pains and unrealised gains.
  • They target few jobs, pains, and gains, but do so extremely well.
  • They go beyond functional jobs and address emotional and social tasks.
  • They align with how customers measure success (personally and professionally).
  • They focus on jobs, pains and gains that a lot of people have or that some will pay a lot of money for.
  • They differentiate from competition on jobs, pains and gains customers care about.
  • They outperform competition substantially on at least one dimension.
  • They are difficult to copy.

This list will help you stay focused as you start exploring ideas for your value proposition and assessing viable alternatives.

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Insight #2

Don't Judge. Listen.

"In a great feedback culture people feel comfortable presenting (bold) new ideas early, knowing that they will evolve substantially…"- Value Proposition Design, page 134

There are many new ideas, considerations, insights and value propositions that you will ultimately want to put to the test with your immediate team and wider company stakeholders as you work though your Visual Proposition Map. The Strategyzer Team stress throughout the book the importance of getting buy-in early, and continuously, from your colleagues to make sure your strategic work and conversations deliver actionable and relevant outcomes that align with your Value Proposition Canvas.

De Bono’s Thinking Hats framework remains a valuable business model for collecting effective feedback. In Value Proposition Design, the authors have taken a new approach on the classic model by using just four (white, black, yellow, and green) of de Bono’s six thinking hats to gather feedback in the following six step sequence.

  • Step 1 – Pitch: present the idea and value proposition or value canvas for a maximum of 15 mins.
  • Step 2 – White Hats on: Your audience members can ask clarifying questions around the information and data for 2-5 mins.
  • Step 3 – Black Hats on: Participants quickly write down the reason they thinks your idea is a bad one – difficulties, weaknesses are read out loud.
  • Step 4 – Yellow Hats on: participants quickly write down a point each on why the idea is useful and then discussed.
  • Step 5 – Green Hats on: alternative solutions to evolve the ideas are discussed in an open forum.
  • Step 6 – Evolve: The presenting team takes the 4-hat feedback and evolves the idea.

The compelling viewpoint for suggested success from the authors is to encourage your entire team to change their mindset and embrace a new way of “decision making” centred on information gathering and the power of feedback. You need them to listen to, not judge what you are proposing.

Value Proposition Design is a fantastic resource for existing businesses and new start-ups. Buying the physical book will unlock access to a stack of additional and awesome downloadable resources.

Read the book

Get Value Proposition Design on Amazon.

Alan Smith

Alan is obsessed with design, business, and the ways we do them. A design-trained entrepreneur, he has worked across film, television, print, mobile, and web. Previously, he co-founded The Movement, an international design agency with offices in London, Toronto, and Geneva. He helped create the Value Proposition Canvas with Alex Osterwalder and Yves Pigneur, and the breakthrough design for Business Model Generation. He co-founded Strategyzer where he builds tools and content with an amazing team; helping business-people make stuff customers want.

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