The Value Proposition Canvas (VPC) is a tool to empathise with customers, identify needs and desires in order to understand which products or services they are willing to buy.
It is a "plug in" or an addition, to better define the characters of the idea for the start-up, of the Business Model Canvas; an in-depth study of two sections, made up of the block dedicated to customers and the one aimed at the value of the product, which allows you to identify the best correspondence between the needs and desires of a specific customer and the products and services that your start-up offers.
We usually use the Value Proposition Canva in marketing to understand the problems customers have and the benefits they can get from a product, service or solution with the aim of finding the right fit between what the product does and the customers' needs. A combined use with the buyer persona model is very powerful to define an inbound marketing & sales strategy and the characteristics of the customers to attract, engage and retain.
The usefulness of the value proposition canvas
This method was described by Alex Osterwalder in his book Value Proposition Design. This magnificent tool harnesses the power of visual thinking and brainstorming techniques to unleash the best creative ideas and channel them into a structured path to design the products/services that customers need.
What is the Value Proposition?
The Unique Value Proposition is the set of those elements that make your company unique to your customers. One of the most important factors for user/customer conversion.
If well constructed, this proposition can provide valid arguments as to why the user should buy your product over another belonging to a competitor. This is because you will be able to highlight strengths that will give you a real competitive advantage.
What we are working on today is to understand and make others understand, therefore, but also ourselves, what makes your business proposal unique compared to others on the market (there are always other similar proposals, never believe that you are alone; if you are, it is probably because there is no market).
Customers are interested in how your solution solves their problem or need, so: you have to create what the market wants, not what is missing.
Spoiler: Once the Value Proposition Canvas is filled out correctly we will have beautiful things in our hands: answers!
You may ask yourself now: "ok answers, but what are the questions?"
· What need does my product/service satisfy?
· Does this need exist?
· Is the market ready?
· Who do you intend to address?
HOW TO COMPILE THE VALUE PROPOSITION CANVAS?
Before starting to compile the template, one thing must be made clear: as with many other tools, there is an order to be respected in order to write it correctly. The Value Proposition Canvas is divided into two sections, one part dedicated to the user and another part dedicated to the product or service you intend to offer. Between the two sections, one initially concentrates on the one on the right, i.e. the one dedicated to the user (generally in the shape of a circle), followed by the offer, then the one on the left (also known as the value square).
THE CIRCLE ON THE RIGHT (THE CUSTOMER PROFILE)
It is time to dress the customer!
The Value Proposition Canvas help us, as mentioned so far, to define the customer profile through an analysis; that of the famous Job to be done, Pain and Gain.
We like to use Anglo-Saxon startupper terms, but very simply for you, the startupper you want to become, we are going to analyse what actions the user wants to do (JOB), what are the fears or rather the difficulties he/she encounters on a daily basis (PAIN) and finally what the user would like to obtain in terms of advantages (GAIN).
The JOB, as mentioned above, are the actions that a person wants to perform. Actions are of three types:
· Functional, those closely related to the action to be performed and/or the objectives to be achieved. To give practical examples: mowing the lawn, eating healthily, going to work, filling in a questionnaire, etc.
· Social, i.e. how the user wants to appear in the eyes of society, the status they want to achieve. How they want to be perceived. For example, being judged as fashionable for buying a new and innovative accessory or feeling/appearing competent in knowing how to choose healthy food.
· Emotional, how they want to feel, what emotions they want and try to feel. In fact, customers, but people in general, seek a specific emotional state. These include wanting to feel good and safe, for example, knowing they are using an accessory they can trust while gardening, or thinking they are physically healthy and strong thanks to an organic diet.
· Pain, or client difficulties, are situations that make an action unpleasant and complicated, also known as obstacles. These will not allow a task to be completed. Thanks to this analysis, we can understand what annoys or does not allow the person to satisfy their need. Also in this case, as for jobs, difficulties are classified into:
- Functional; wanting to continue with examples, the solution that the user has now to fulfil their task does not work at all or not as desired, or worse has an undesired side effect. Always imagine the lawnmower tool, think of too much power that does not allow the young gardener to work calmly or accurately;
- Social; the customer believes that performing a certain action could appear distasteful. For example, buying and wearing a pair of boots made from crocodile skin could have negative effects in the eyes of the public.
- Emotional; Difficulties that make the customer think that they are not able to or do not know how to use a certain product. Can the grass cutting attachment be used by everyone or only by a professional?
Finally, the Gains allow you to analyse what the customer wants to achieve in terms of results and benefits (what advantages they expect to receive). These are assessed according to characteristics that relate to the client's expectations; they will be:
- Required: characteristics without which your product does not create real value. By now we have considered a grass cutter so at this point what can the demand be if not that the attachment cuts grass?
- Expected: the expectations that the customer has; I expect, for example, that the lawn will be cut evenly and without inconvenience.
- Desired: these go beyond expectations; While cutting the lawn, the computer on the mower monitors the health of the garden.
- Unexpected: real (positive) surprises for the customer; "it even makes coffee!"
Having completed the first side, we already have a clear picture of who our hypothetical customer is, what he wants and does not want. You have in your hands a first answer to the question "who do you intend to address?".
PRODUCT MAP AND VALUE
In the left section of the Value Proposition Canvas, we need to identify the products/services that are able to satisfy customer jobs, create precise advantages and overcome precise difficulties. In practice, we associate the products and services we intend to offer with the individual tasks (jobs) identified.
For the examples given so far, our product can only be a grass cutter, and therefore we will write it in the appropriate space. If it had been an e-commerce, then that would be our product to insert.
Once we have identified our product and entered it in the appropriate space (products and services) we start to ask ourselves:
How do we intend to reduce customer difficulties?
Then find additional and/or complementary features, functionalities and services that allow the customer to solve or reduce their difficulties. Choose the difficulties judged to be the most critical, those that create the most obstacles; you cannot find the solution to everything. The difficulty reducers act on what could limit or prevent your customers from using your product/service.
How do we create customer benefits?
Then find features, functionalities, additional and complementary services that enable the customer to achieve the expected, required and unexpected benefits. Benefit generators are what guarantee a more rewarding experience.
How to apply Canva's Value Proposition to the sales process
As we help clients' New Business Development (NBD) teams acquire new customers, we are always looking for methods, technologies and processes to attract qualified prospects, increase the deal closure rate and shorten the sales cycle.
So we tried applying VPC internally to map best-practices and new business opportunities, and once we found the method, we started using it with clients.
The process is very simple and it’s divided into three steps:
1) The first step is based on an initial focus on the client's sales team to visually represent the business model in different market sectors. Then the VPC is designed for a specific product/service line. Each buyer person corresponds to one VPC.
2) A second steo is dedicated to the collection and analysis of all the messages that salespeople use in the various stages of the sales cycle (scripts, emails, pitches, presentations, methods of exploring needs, content of commercial offers, language used to handle objections, to negotiate and to close negotiations, etc).
3) The last step is to check if and how far the customer value proposition and the product offerings in each segment are really aligned with the sales actions and arguments. If they are misaligned, a process is created to orchestrate marketing, sales and after-sales messages.
What we learnt from mapping the Customer Value Proposition
This is what usually emerges from an alignment between sales messages and the results of the Value Proposition Canva:
Sales vocabularies are not aligned, so each salesperson uses different words and arguments in similar situations. This creates confusion both in customers and internally with marketing and customer success teams.
Marketing messages do not correspond with the arguments that salespeople use in the sales process. Often the content used in the marketing and sales process is different and does not reflect the problems and benefits that customers gain from using a product, service or solution.
Salespeople do not have a playbook to support them in the various steps of the sales process. Researching and identifying potential customers, connecting, qualifying and building trust, analysing needs, managing sales offers, negotiating, handling objections and closing are left to personal methods.
Salespeople do not use CRM and Sales Automation technologies to centralise information on prospects and customers. They struggle to automatically and quickly track the buyer's journey from start to finish, make inaccurate sales forecasts and spend a lot of time on operational tasks (e.g. preparing offers) rather than generating business.
As you can see, if a Value Proposition Canva is applied to the sales process there’s a better chance to raise many points of attention and creates a moment of internal reflection on what works and what doesn't in all demand processes (marketing, sales and customer success).
An interesting insight that has emerged from recent projects with B2B customers in the TPM, medical and industrial sectors is this: when potential customers made a demand, salespeople simply offered the most suitable products to satisfy that specific demand.
However what salespeople should bear in mind is the fact that customers do not always know what the best solution for their problem is. Hence, they don’t know what is the most suitable product for them.
Thanks to the approach with our clients, the latter have learned the process from first contact with the customer through to after-sales has a significant impact on revenues and profits. For a more detailed approach contact our team of experts!