A few years ago, I discovered the business model canvas, one of the most helpful tools for a start-up. Recently, Alex Osterwalder, Yves Pigneur, Greg Bernarda, and Alan Smith released the book “Value Proposition Design.” The book, like the business model canvas, outlines a simple yet invaluable practice for any business.
One customer at a time
In order to build a good business model, you first need to provide a product or service that satisfies customers’ needs. However, every product does not fill each customer’s needs; that’s where a value proposition canvas and business model canvas become helpful.
Customer profile: Discovering what customers want
The value proposition canvas uncovers what your customers want by helping you learn the answers to the following three questions:
1. What work is a customer trying to complete, and why?
- In others words, what are – the tasks he or she is trying to complete?
- the problems he or she is trying to solve?
- the needs he or she is trying to satisfy?
The canvas can reveal whether work and/or personal reasons are motivating the customer to complete the tasks at hand.
2. What are a customer’s concerns?
The canvas can help you determine a customer’s concerns, either before or during work on a job. The concerns can involve costs, circumstances, negative emotions, or risks.
3. What does a customer hope to gain?
- Potential gains could be the overall outcome or specific benefits a customer expects or would be surprised by. It could be something useful, like cost savings or a feeling of accomplishment.
Put it in order
After reviewing a customer’s tasks, concerns, and anticipated gains, organize the information from what is most important to least important. I have found that using sticky notes makes quick work of organizing data, since the information can be re-sorted if the customer changes his or her view of what is important.
Show what you have to offer
Now that the customer profile is complete, it is time to use a value proposition map to show a customer your plan to address his needs. The map has three parts:
Products and services
Design a product or service that fits a customer’s jobs and addresses his or her concerns and expectations.
Clearly explain how you product or service will alleviate each concern a customer may have.
Provide details on how your products or services will result in gains for the customer.
Give it life
Now that you have clearly shown a customer how your product or services will fill his or her needs, it’s time to put the model to work. Once you have worked out a payment agreement, your work is done.
What about you?
Have you experimented with these tools? How effective were they? Feel free to share your comments.