The Value Proposition Canvas
The Value Proposition Canvas is a tool developed by Alexander Osterwalder and Yves Pigneur, authors of the business strategy book “Business Model Generation”. It is a visual tool that helps you create a compelling value proposition by mapping out the customer segments, jobs, pains, and gains that a product addresses.
Implementation
Implementing the Value Proposition Canvas is relatively simple and consists of two parts:
- The left side, which maps out the customer segments, jobs, pains, and gains, and;
- The right side, which maps out the product’s unique value proposition, key activities, resources, and partners.
For best results, complete the exercise with your team members either on a whiteboard, or digitally, using tools like FigJam / Figma.
Customer segments
Identify the specific customer segments that the product or service is aimed at.
Jobs, Pains, and Gains
Identify the specific jobs that the customers are trying to accomplish, the pains they are experiencing while trying to accomplish those jobs, and the gains they hope to achieve.
Unique value proposition
Based on the customer segments, jobs, pains, and gains, identify the unique value proposition that the product or service offers.
Key Activities
Identify the key activities that the product or service needs to perform to deliver the unique value proposition.
Resources
Identify the resources required to perform the key activities.
Partners
Identify the partners and suppliers that will be needed to perform the key activities.
When to use it
The Value Proposition Canvas is a versatile and valuable tool that can be leveraged in a range of circumstances.
- Developing new products
- Improving existing products
- Creating a unique value proposition
- Identifying new business opportunities
- Creating a product strategy
- Communicating the product's value proposition
- Identifying areas of improvement in the customer's experience
- Identifying customer's pain points
Benefits
Improved customer understanding
Use the information to gain a deeper understanding of your customers. This is important data that can drive future product decisions/marketing campaigns.
Increased focus
Use insights to hone in on delivering the features most important to your customers.
Increased innovation
The framework forces you to provide a unique value proposition — Use this to drive innovation and differentiation.
Increased alignment
Mapping out the key activities, resources, and partners required to deliver the unique value proposition will ensure that everyone is working towards the same goal.
Better communication
The tool will aid you in effectively communicating the value proposition of the product to stakeholders through the visualization of customer groups, jobs, pains, and gains.
Using the information
There are several ways you can use the insights garnered from completing the Value Proposition Canvas.
Create a value proposition that communicates to clients the distinctive advantages of the product or service using the data from the canvas.
Prioritize product development efforts using the information from the canvas and concentrate on developing a product that specifically addresses the needs and desires of the target consumer segments.
Find new business prospects that are in line with the demands and desires of the customers.
Coordinate partners and resources in order to deliver the unique value proposition.
To make sure the value proposition appeals to potential customers, test and validate it.
Clearly explain the value offer to all relevant parties, such as potential clients, investors, and team members.
Pinpoint areas where the client experience could be improved, then focus on resolving these issues.
Keep the canvas as a reference and update it as the product or service evolves and the customer’s needs change.
Use the canvas to make strategic decisions about the product or service, such