Use the Value Proposition Canvas to Position Your Business for Success

Practically no matter what type of business you have, one of the main keys to success is meeting your customers’ needs. That’s what will draw them in and keep them coming back to you again and again.

But when you’re launching a new product (or trying to refine an existing one), it can be hard to know where to start. And that’s especially true if you don’t have a clear plan. This is where the Value Proposition Canvas can help.

So we’re going to take a look at what this tool is, how your business can benefit from it, and exactly how to use it.

What is the value proposition canvas?

The Value Proposition Canvas is a strategic business tool that can help you get a clear picture of how well a product or service matches up with customers’ needs. It was created by Swiss business theorist Alexander Osterwalder.

To better understand this tool, let’s start with a definition of a value proposition. This is a statement that clearly identifies why customers should buy your product. It should highlight how your product solves a problem, the added benefits it offers, and why your product is superior to other options on the market.

So, keeping that in mind, the Value Proposition Canvas is a way to demonstrate or examine your value proposition in a visual way. Basically, it is a chart that consists of a square on the left and a circle on the right, and both are divided into three sections.

The circle is for your Customer Profile, which gets filled with details on your customers’ needs, desires, and obstacles.

And the square is for your Value Map. It identifies the various benefits of your product and how it addresses your customers’ needs.

The benefits of using the value proposition canvas

There are many benefits to using the Value Proposition Canvas. That’s why it’s a popular tool among businesses in a wide variety of industries. Here are just some of the benefits it can offer.

It lets you see your value in a new way

The Value Proposition Canvas can help you think differently about the value you provide to customers. When you have a list of the different factors that affect how your customers make decisions, it can help you find gaps in your value proposition. This will help focus your efforts when it comes time to develop a new product or find areas for improvement.

It is easy to understand

This business tool provides a visual representation of your value that’s easy to understand at a glance. That can come in handy in a variety of situations. For example, it can be very useful during brainstorming sessions and workshops, as you can fill up the template with post-it notes, and easily re-evaluate and add or remove items as you go.

Alternatively, when you’ve created a Value Proposition Canvas that you’re proud of, it can be a useful way to show your value proposition in an easy-to-understand manner, such as when you’re in meetings with stakeholders.

It can guide your marketing efforts

Besides helping you to refine your products or services, the Value Proposition Canvas is useful for ensuring your marketing efforts focus on your products’ strengths. By comparing the benefits of your products to the needs that are most important to your customers, you’ll identify exactly what you should be showing off to your target audience.

The sections of a value proposition canvas

Now that you know what a Value Proposition Canvas is and how it can help, let’s take a closer look at the different sections and what purpose they serve.

Customer Profile

The Customer Profile is made up of three sections: customer jobs, pains, and gains. The Customer Profile side of the chart is where you should begin because that will help you focus on customers’ needs as you complete the rest of the canvas.

Customer jobs

This section can include a variety of tasks that customers are trying to perform. To help you identify all those tasks, consider these three different types of jobs:

  • Functional jobs are straightforward and practical tasks. They will likely be the first thing to come to mind when you think about customers’ needs. For example, if you were a car manufacturer, one of your customers’ functional jobs would be their need to commute.
  • Social jobs are things that customers need to do (or feel they need to do) as part of their role in society or their relationships. For example, that might include choosing a car that their family will want to ride in, or one that’s environmentally friendly. 
  • Emotional jobs are the things customers want to do based on their preferences or feelings. For example, choosing a car that they find aesthetically pleasing.

Pains

This section can cover all the negative emotions, risks, obstacles, or bad experiences that customers have to deal with as part of getting their jobs done.

Gains

This section includes the benefits that customers want or expect from your product, and will make them more likely to make a purchase. 

Keep in mind that gains are not simply the opposite of pains. Instead, this section can include ambitions, goals, and the things that will grab their attention, make them happy, or excite them.

Value Map

The Value Map consists of three sections. They are designated for listing your products or services, pain relievers, and gain creators.

Products and services

This is the section for the parts of your offering that will serve the customer’s needs. It can be whatever product or service you plan to focus on. If your offering includes multiple versions of the same product or related products, you can list them here.

Pain relievers

This section focuses on the ways your product can solve or minimize the pains listed in your Customer Profile. It should describe precisely how your product alleviates those pains.

Gain creators

This section includes the ways your product offers extra value to customers. That can include features or aspects of the product that will improve the customer’s experience.

Value proposition canvas case study

The best way to get a deeper understanding of the Value Proposition Canvas is to see some concrete examples. So here’s an example of how Uber might fill out their canvas.

Uber Customer Profile

Beginning with the Customer Profile, these are some of the jobs that could apply to potential Uber customers.

Functional jobs

  • Contact a taxi service for a ride
  • Wait for it to arrive
  • Inform the driver of the destination
  • Ride to the destination
  • Pay for the ride

Social jobs

  • Being able to travel with friends
  • Give the driver an appropriate tip
  • Use a service with some cool-factor
  • Not appearing too frugal
  • Not appearing too extravagant

Emotional jobs

  • Being able to enjoy the trip
  • Having a way to voice complaints
  • Having a way to praise good drivers

Customer pains

Next, here are some of the pains that could apply to these customers:

  • Lack of rides available
  • Dealing with a bad driver
  • Arriving later than expected
  • Facing any issues with making the payment

Customer gains

And lastly for the Customer Profile, these are the gains that customers might want or expect:

  • Accurate information on when the car will arrive
  • Ease of placing an order or making a cancellation
  • Confidence in getting a good driver

Uber’s Value Map

Now for the Value Map side of the canvas. Starting with the product and services section, Uber could fill in some of the different services and features that it offers including:

Products and services

  • The Uber mobile app
  • The different tiers of its service (UberX, UberXL, Uber Black, etc.)

Pain relievers

Next up, Uber could fill out their pain relievers section with some of these features:

  • Driver ratings to inspire confidence
  • Vehicles available 24/7
  • Providing estimated arrival and travel times
  • Simple automatic payment
  • Standard recommendations for tipping

Gain Creators

Finally, here are some gain creators that address how Uber’s features might attract and excite customers:

  • Fast response time
  • Ease of using the app
  • Driver rating system
  • The ability to track the ride while it’s en route to pickup

What to avoid

There are some potential drawbacks to the Value Proposition Canvas if you don’t use it properly. But you can avoid most of those common mistakes by following some simple tips. So let’s go over what those drawbacks are and what to do about them.

Including too many customer segments

Since one of the strengths of the Value Proposition Canvas is that it helps you take a closer look at your customer’s needs, it’s a good idea to focus on a particular customer segment. That could mean narrowing it down by age, sex, income, or other demographics.

These different types of customers will each have some of their own unique needs. So you should think about all the different niches you serve and consider doing a separate canvas for each type of customer. Otherwise, your canvas will end up with too broad a focus, and you may lose sight of which jobs, pains, and gains are the most important.

Trying to meet every single need

This point is related to the one above because it is also all about narrowing your focus. 

Even when you have a Customer Profile that’s dedicated to a specific type of customer, you may find yourself struggling to ensure your product meets all of the customer’s needs. That’s because it’s often unrealistic to think your product can do that.

So instead, you should prioritize those needs. Think about which ones are most important to the customer, as well as your product’s strengths and weaknesses. This will help you identify areas where you should improve, and others that you shouldn’t spend too much time or resources on.

Expecting a comprehensive view of your value

One drawback of the Value Proposition Canvas is that it can be a little simplistic. It doesn’t take into account some important aspects of your value. 

For example, there’s no space on the template for analyzing how your offering compares to the competition.

However, this simplicity is also one of the strengths of this tool. By keeping things minimalistic, the Value Proposition Canvas is easy to understand. So just keep that in mind and don’t expect it to be a comprehensive analysis.

Related business tools

The Business Model Canvas

In addition to creating the Value Proposition Canvas, Alexander Osterwalder is also the inventor of the Business Model Canvas. This is a related strategic tool that’s used to create a visual chart of your business model. 

When compared to the Value Proposition Canvas, this tool has a broader focus. It looks at many aspects of your business, including your key partners, resources, activities, revenue streams, cost structure, customer relationships, and more.

It offers many of the same benefits as the Value Proposition Canvas. It’s useful as a tool to help people understand, discuss, analyze, and brainstorm ideas on how to model your business. 

The Persona Canvas

Another related tool is the Persona Canvas. It is a tool for creating a visual representation of a customer persona. This is a semi-fictionalized representation of an ideal customer that’s based on data and research.

It is useful for providing a face and a name to a particular customer segment. This makes it easier to relate to your potential customers and understand their motivations. As opposed to always dealing with a nebulous customer segment or type, it can help you think and talk about them in a more tangible way.

These three strategic business tools can also be used in conjunction with each other to shape your business model, gain a better understanding of your target customers, and refine your product offering to meet their needs.

Try it out

Now you should know everything you need to get started. Remember that similar to creating a business plan or crafting your mission statement, the Value Proposition Canvas can be invaluable for helping provide you with direction. It will help you focus your efforts and ensure all of your stakeholders are on the same page.

So start filling out your template and see for yourself how it can help. You can download a PDF template of the Value Proposition Canvas on Osterwalder’s website, Strategyzer.com. It shouldn’t take long for you to get a clearer idea of how your offering matches up with your customers’ needs and some ways that you can improve.


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