Value Proposition – 1. Choose an avatar/target market – A product made for everyone doesn’t appeal to anyone, who are you really trying to serve?
2. Identify customer “jobs” – What is your target audience trying to achieve in their lives? Types of work are: functional, social, personal/emotional and supportive. Don’t forget to challenge customer tasks with a “why” to identify the real work that needs to be done (instead of buying x brand for functionality, for example, it could be emotional work related to increasing the sense of self-esteem.)
Value Proposition
4. Identify customer benefits – the essential (most basic), expected, desired, and unexpected (most value-added) benefits associated with these actions.
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5. Rank the elements of your customer profile – tasks by importance, pain by severity (how extreme?) and benefits by relevance (how necessary?).
Tips- Try creating multiple profiles and assigning partners to potential clients or the most common, high-ranking elements. Try to identify a term coined by Steve Blank to describe your “early evangelists” (those who want to adopt a new value proposition (VP)).
Before proceeding, run Test 1 to verify the assumptions you’ve made about your target market – see the VP testing section.
4. Rank the elements of your value map by importance – how essential your products/services, suppliers and makers are to customers.
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Does the product/service have lasting value for customers – does it have: a frequent trigger (often used), low friction tasks (very easy to use), highly motivating and variable rewards (exciting to use every time), and a way the time and energy invested (the more you use it, the more its value increases).
Types of prototypes (note the need to design and test multiple prototypes of the same type and to research multiple types)
Run this session early as you explore different potential value propositions to determine which ideas to prototype or explore further in the testing phases.
4. Select the top idea (or rank them), this will determine the prototype(s) on which you will conduct further testing. Refine the value proposition canvas (customer profile + value map) for the best idea(s) so that it is ready for prototyping and testing.
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Note that while these methods are for internal evaluation, the next section focuses on validating ideas externally or in the marketplace.
The more loops of this cycle you can complete, the faster you will learn and the more progress you will make.
Use this test after you create the first iteration of your customer profile and value map and before you create a rigorous prototype.
This stage is completely qualitative, you try to take comfort in the logic in your customer profile and your value map and try to deliver value to your customer, note that most solutions at this stage remain unproven (and therefore your time and effort increases. point should be relatively limited).
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Use these tests after narrowing down your potential VPs using the evaluation criteria and methods listed above. Test the market first, i.e. your customer profile, and then your product/service, i.e. your price tag.
3. Success Criteria – How do you know if your assumptions are correct, eg I’m looking for X% engagement – clicks, likes, comments, shares. Hint – If you are established, look for overindexing ie has my test/content outperformed my existing content? Or compare yourself to an industry benchmark when testing a new idea, i.e. did my test outperform industry players with similar VPs?
4. Analyze the results and adapt your customer profile to your learning experience. Try to rearrange your work, pain and gain.
1. Record the underlying assumptions in your value map. What are the key assumptions/hypotheses surrounding the power of your products and services to directly create benefits or relieve pain customers experience in their most important tasks?
Value Proposition Design
3. Success Criteria – How do you know if your product will win in the market? For example, I’m looking for X% medium/content engagement, X% click-throughs, and X% conversions (email signups, downloads, survey completed, or pre-orders).
4. Measure results and adjust the way you position your value proposition based on feedback or consider new elements for your products/services as needed.
Keep in mind that as you go through the steps to validate your product, you will need to put more effort into designing tests and using criteria that reflect the buyer’s actual intent or purchases.
Business model fit: you have proof that your value proposition can be embedded in a profitable and scalable business model.
Value Proposition Canvas Example
Use “back-of-the-envelope” versions of this test once you’ve narrowed down potential VPs and done a more thorough analysis to make sure you’ve designed a VP that’s a good fit for the product market.
Getting proof through numbers. Based on your conversion test results, what revenue do you expect to generate that will make your business profitable given your current cost structure? Once you understand the variable costs associated with selling your product (input costs and most importantly – estimated/estimated media/advertising spend per product), perform a break-even analysis to determine your path to profitability.
Test other assumptions in your business model. In addition to proving the product’s suitability in the market, you also want to test broader assumptions that make your business scalable and viable in the long run.
As of now, we are in the research stage of VP Development, Steve Blanks 4 step business building process to understand this shape.
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VP Design, prototyping and testing are activities in the discovery phase, implementation comes after. Do not proceed with steps 3 and 4 until 1 and 2 have been refined and product-market fit has been achieved.
Keep in mind that this process is iterative rather than sequential – move from design to testing as quickly and as quickly as possible and adjust your value proposition along the way. Also note that this is a market pull method where you start with problems – build value propositions – measure success and adjust technology and resources as needed. A technology pool is not a method where technology and resources are primary. When it’s time to really understand your customers, their work, pain and benefits, as well as your offering to them, the Value Proposition Canvas is developed. By Alex Osterwalder of Strategyzer AG, is one of the best tools available to help you with this.
Provide a comfortable environment. Certainly not the living room. Create a creative atmosphere and have lots of colorful materials and magazines ready.
Tip! Cut the canvas into two parts (with a circle on the right and a square on the left). Start by showing your team only the right (circle) part. This prevents them from immediately focusing on what functions, painkillers and profit-makers should be.
Apple Value Proposition In A Nutshell
To start with the Value Proposition Canvas, always start with the customer. Of course, you can have many different customer segments that you serve (or want to serve). So your first job as a team is to discuss who the high-end clients really are so that you can make some decisions about who you’re designing for. You may need to fill out multiple canvases, one for each customer.
Once you’ve chosen a customer, as a team you start detailing your customer’s tasks – to-do’s – using sticky notes and permanent markers. What social, emotional and functional functions does your client perform on a daily basis? They have a functional job, you know. But you also need to know how they do it, how they feel and what social qualities come into play. For example, a parent whose job it is to drive a child to school may also have the functional duties of getting them there on time, making sure they are fed throughout the day, and making sure they don’t being perceived as an outcast (social status can be important), feeling loved and valued, caring, etc. Ask enough “why” and you will find this information. Pain is usually easy to get. What happens on the way to work? This is an advantage that most new users miss
Value proposition canvas. Gain is not just the opposite of pain. Instead, benefits are hidden ambitions in humans, beyond painkillers. It takes a designer’s mind to discover it. Asking the right questions is very important here. What does your customer really want to do that he can’t do now? Going back to the parent-driver example, maybe it’s to look like a hero to your kids and other parents, or to see your kids succeed in life. If the benefits are somewhat non-existent for you, it’s probably because the big benefits often are.
Finally, when you have completed the right side of the canvas, move to the left side. First, name some solution options that come to mind. Maybe you already have something, or you are creating something during an idea session (detailed in the next chapter). If these are in place, you must decide how to use them together to address your customers’ tasks, pains, and benefits in a unique way that resonates with your customers. Using this canvas a few times can help you think differently about yourself. Customers and what you have to offer them. Plus, if you do it right, your customers will think very differently about why they hired you to meet their needs in the first place.
How To Use The Value Proposition Canvas
Tip! Check to work with real customers. you will be
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