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Value proposition design
The document outlines a value proposition design framework that emphasizes understanding customers' jobs, pains, and gains to create valuable products and services. It discusses the importance of accurately identifying customer segments, recognizing their needs, and differentiating offerings to relieve pains and enhance gains. Additionally, it provides guidelines for innovation, assessing value propositions, and developing effective business models.
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Value proposition design
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- 3. Step into yourcustomers shoes Select customer segment Identify customer activities Identify customer pains Identify customer gains
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- 5. Customers (potential customers) •Customer Jobs – (activities) Jobs describe the things your potential customers are trying to get done. These could be tasks they are trying to perform, problems they are trying to solve or needs they are trying to satisfy It is important to acknowledge that not all jobs / activities have the same importance Angle Tip When carrying out potential customer research its important to first identify who your potential customers might be. Don’t waste your time asking people their views on products or services that they will not buy. • For example, mowing the lawn, playing a sport Functional Jobs • When a customer wants to look good or gain power status • For example – brand aspiration – Ferrari, Hugo Boss Social Jobs • When customers seek a specific emotional state such as peace of mind or feeling secure • For example – private healthcare Personal jobs Supporting Jobs • Buyer of value – physically choosing and purchasing • Cocreator of value – those that leave feedback • Transferrer of value – reselling a product, upcycling a product
- 6. Jobs / activities •What are your customers jobs?
- 7. • Customer pains −Anything that annoys customers before, during or after trying to get a job (activity done). − Pains also describe risks – potential bad outcomes related to getting a job (activity) done badly • Function – this does not work properly • Social – I look bad in this • Ancillary – its annoying Undesired outcomes, problems and characteristics • These are things that prevent customers from starting their activity – I can’t afford it, I don’t have the time Obstacles
- 8. Pains • What arethe potential pains?
- 9. • Example triggerquestions: − How do your customers define too costly? Too much time, money or effort? − What makes your customers feel bad? What are the frustrations or annoyances? − How are current products / services underperforming? What features are missing? Are there performance issues? − What are the main difficulties and challenges your customers encounter? − What risks do your customers fear? − What’s keeping your customers awake at night? − What are the barriers your potential customers face when adopting your product?
- 10. • Customer gains −Gains describe the outcomes and benefits your customers want. Some gains are required, expected and some are desired and some would even surprise them. • These are gains without which the solution would not work • For example, a smartphone making a phone call Required gains • Relatively basic gains that we expect • For example – an iphone being well designed and looking good Expected gains • These are gains that go beyond what we expect • For example – our smartphone to sync with other areas of our life – e.g. email Desired gains Unexpected gains • These are gains that go beyond customer expectation and desire
- 11. Gains • What arethe: − Required − Expected − Desired − Unexpected gains
- 12. The value map Listall products and services Outline pain relievers Outline gain creators
- 13. Value Map Products andServices Gain Creators Pain Relievers
- 14. Products and ServicesGain Creators Pain Relievers • Products and services − This is simply a list of what you offer −Physical (products) −Intangible (services) −Digital −Financial • Gain creators − Describe how your products and services create customer gains − Focus on the most relevant and important gains where you can make a difference − Typically saving time, money, effort • Pain relievers − Describe how your products or services alleviate customer pains − Again focus on the most relevant ones − Typically −Underperformance −Cost, time, effort
- 15. Value map • Whatare your: − Products − Pain Relievers − Gain Creators
- 16. Fit Are you addressing essentialcustomer gains Are you addressing essential customer pains You achieve fit when customers get excited about your value proposition, which happens when you address important jobs, alleviate extreme pains, and create essential gains that customers care about.
- 17. • Does yoursmatch? • What is left on the customers side? • What is left on your side? • Are any of them important?
- 18. Where to start Createa new gain creator for a given customer profile Imagine a new product or service Create a new pain reliever for a given customer profile Focus on your customers’ most essential unrealized gain Uncover a new unsatisfied job Solve your customers’ most extreme unresolved pain
- 19. Push vs Pull Solution (invention,innovation, technology) Value proposition prototype Customer insights Problem (jobs, pains, gains) Value proposition design Adjust technology and resource needs Find a problem Jobs, pains, gains Find a solution Jobs, pains, gains Push Pull
- 20. Pull – identifyhigh value jobs • High value jobs are characterized by pains and gains that are: When customers success or failure to get the job done leads to essential gains or extreme pains When the pains or gains related to a job can be felt or experienced immediately or often When current value propositions don’t help relieve pains or create gains in a satisfying way or simply don’t exist When many people have the job with related pains and gains or a small number of customers are willing to pay a premium
- 21. Pull – jobselection Important Tangible Unsatisfied Lucrative High Value Jobs Jobs • Rank the jobs your customers do • 1 = low • 5 = high • Total each score under the high value jobs column • Focus, if possible, on the few highest scoring jobs
- 22. 6 ways toinnovate from the customer profile Address more jobs Address a more complete set of jobs, including related and ancillary jobs Switch to a more important job Help customers do a job that is different from what most value propositions currently focus on Go beyond functional jobs Look beyond functional jobs and create new value by fulfilling important social and emotional jobs Help a lot more customers get a job done Get a job done incrementally better Help a customer get a job done radically better Help more people to do a job that was otherwise too expensive or too complex Help customers better do a job by making a series of microimprov ements to an existing value proposition This is the stuff of new market creation, when a new value proposition dramatically outperforms older ways of helping customers
- 23. 10 questions toassess your value proposition 1. Is it embedded in a great business model? 2. Does it focus on the most important jobs, most extreme pains and the most essential gains? 3. Does is relieve unsatisfied jobs, unresolved pains and unrealized gains? 4. Does it concentrate on only a few pain relievers and gain creators but does them well? 5. Does it address functional, emotional and social jobs all together? 6. Does it align with how customers measure success? 7. Does it focus on jobs, pains or gains that a large number of customers have or for which a small number are willing to pay a lot of money? 8. Does it differentiate from competition in a meaningful way? 9. Does it outperform competition substantially on at least one dimension? 10. Is it difficult to copy?
- 24. Customer development Customer discovery Customer validation Customer creation Company building Get outof the office to learn about your customers’ jobs, pains and gains. Investigate what you could offer them to kill pains and create gains Run experiments to test if customers value how your products and services intend to alleviate pains and create gains Start building end user demand. Drive customers to your sales channels and begin scaling the business
- 25. 10 characteristics ofgreat value propositions 1. Are embedded in great business models 2. Focus on the jobs, pains and gains that matter most to customers 3. Focus on unsatisfied jobs, unresolved gains and unresolved pains 4. Target few jobs, pains and gains but do so very well 5. Go beyond functional jobs and address emotional and social jobs 6. Align with how customers measure success 7. Focus on jobs, pains and gains that a lot of people have or that some will pay a lot of money for. 8. Differentiate from competition on jobs, pains and gains that customers care about 9. Outperform competition substantially on at least one dimension 10. Are difficult to copy