Rust vs. C in networking application
Close

9 August 2022

Software Development

Value Proposition Canvas—what is it and how to use it?

15 minutes reading

Value Proposition Canvas—what is it and how to use it?

The beginning of developing any business model is to define our target group and the value that we want to deliver to this group. This is where the Value Proposition Canvas comes in handy as a tool that helps to analyze, design and above all, choose the right solution to meet the needs of the identified customers. In this article, you can find out everything you need to know about the VPC, its benefits and how it can improve your business.

What is the Value Proposition Canvas?

Essentially, the Value Proposition Canvas is a framework used to ensure that there is a fit between the product and its market. The main goal of the VPC is to understand your product's value from the customer’s perspective. It focuses on two main blocks - Customer Profile and Value Map - to better analyze and understand customers’ needs. The Value Proposition Canvas can be used to remake or improve an existing product as well as to help create a new product that is being developed from scratch. 

The Value Product Canvas can be very beneficial for software product development as it gives the ‘big picture’ for the product and can help ensure that it is positioned around what the customer values and needs. Additionally, it does it in a structured and visual way.

Value Proposition Canvas: two main blocks

The Value Proposition Canvas is a powerful solution that allows you to understand what your target customers want, and which way your product should go to satisfy them. This is why the VPC focuses on two main blocks: Customer Profile and Value Map. Now, let’s dive deeper into what they actually are and how using this framework can benefit any product developer.

Value Proposition Canvas - two main blocks

Customer Profile

The first block, Customer Profile, is further divided into three parts: gains, pains and customer jobs. They all define your target group and help understand their needs and fears, and create a vision to address them. 

Gains

Gains are positive experiences and desires that your target group wants to achieve. They are the general benefits which your customer expects and needs, that would make them happy and encourage them to adopt this product or service. It’s important to remember that gains are not the opposite of pains, which we will talk about later. 


To help define gains, think about what would make your customers happy, what are they looking for and how your product or service can bring them what they want or even exceed their expectations. 

Pains

Pains are all the negative experiences and factors that can stop customers from finishing the job. They are all potential risks that may occur and roadblocks to deal with. Defining them can help avoid them and help identify problems from a customer perspective. It can be also helpful to categorize them from most to least severe, to later prioritize how to deal with them.

To define pains it is good to ask questions about what can make our customer unhappy, what are their fears and what general challenges might they face. This helps eliminate these risks and improve the outcome of the final product.

Customer jobs

Jobs include all tasks customers are trying to solve. We can differentiate three types of jobs: social, functional and emotional. Social jobs are motivated by our reputation and relationship or social roles, for example buying expensive electronics to represent your social status. Functional jobs are very practical, for example buying expensive electronics to have something with a good quality. Emotional jobs are motivated by customers’ preferences, likes and even insecurities. Here, for example, having those expensive electronics would make a customer feel better about themselves, more satisfied. 

For a better understanding of customer jobs it helps to think about what their goals are, how they want to feel and ultimately how we can satisfy their needs and preferences. This can help optimize the whole process and create the perfect product for your client.

Important to note that a customer profile should be created for each customer segment, as they all have specific gains, pains and jobs to be done. 

Value Map

The second block of the Value Proposition Canvas is a Value Map, also further divided into three segments which are: gain creators, pain relievers and products and services. This block corresponds to the customer profile but here the focus is more on the product, its features and functionality, and how it can benefit the customer.

Gain creators

The first segment of the Value Map, gain creators are all the things that offer something new or improved to the customer experience. This part shows how the product or service adds value to the client; essentially how it creates gains. The main goal is to offer the customers something new and unique that will improve their experience.

Here you need to check if the product creates value and make sure it is helpful to the client. For example, think about whether the product simplifies customers’ lives, how it benefits them, if it meets the customers’ criteria for success, and in general, whether it gives them what they are looking for.

Pain relievers

Pain relievers focus on how your product can minimize customers' pain. They should broadly match up with the pains that were mentioned in the Customer Profile.

This part describes how the product or service will ease customers' pains and benefit them. For example, if a pain is ‘excessive cost’, the pain reliever should work on lowering it.

Pain relievers encourage you to think about how the product affects customers emotionally and financially. It is important to answer questions such as, does the product reduce risks that customers are afraid of, how does it affect their emotional state, and does it eliminate barriers that keep your customers from implementing the specific solution? This can help avoid any unnecessary blocks, remove any frustrations, and create the most satisfying and beneficial product.

Products and services

Here the main focus is the features, products and services you will provide. These aspects create gain and relieve pain, and additionally help create value for the customer. All these parts correlate with each other, so it is essential to focus on all of them and look at it in a ‘big picture’ way - they are all connected. 

Products and services is a very practical segment, since it is essential to what you are developing. The most important thing to focus on here is how the product or service will help customers and whether there are ways to improve it even further.

New call-to-action

Benefits of the Value Proposition Canvas 

The Value Proposition Canvas is an increasingly popular framework because of its many benefits for software product development. Nevertheless there could be some potential disadvantages along the way. By understanding such risks it becomes easier to avoid them and makes the whole process more efficient.

Focus and direction

The VPC is undoubtedly a tool that can help you navigate your project with clear focus and direction. It is sort of a visual guide that will keep you focused on the value you want to bring to your clients. While developing a new product or service, a lot of new ideas can emerge along the way so it is essential to always retain the key focus points. The VPC helps decide what kind of improvements to prioritize and keeps the whole process together. The Value Proposition Canvas acts as a guide that keeps everyone on track, helps you understand your target group, and work more efficiently. This framework prevents you wasting time on unimportant things and helps you prioritize tasks in the best possible way. 

Precise custom profile 

The next major benefit of using the VPC is the ability to create a very precise customer profile. This is critical because without knowing who our customers are, the whole process will turn out to be ineffective. This VPC framework is highly focused on understanding your target group and really digging deep into their needs and desires. This is the key to developing a product that will satisfy your customers.

Improved marketing outreach

Marketing and branding is an extremely important aspect of launching a new product. It is crucial that people can gain knowledge about the product or service, get interested, and ultimately buy it. Although this is not an easy task, it is necessary that potential customers understand that this product is exactly what they are looking for and will satisfy their needs. The Value Proposition Canvas helps with this aspect because in this framework the value that the product will bring the customers is the main focus. It helps create a best-fit message for potential clients, answering their needs. This is why building a precise customer profile is fundamental to the whole process. 

Practical and simple

One of the biggest pros of the Value Proposition Canvas is its simplicity and practicality. While creating a product and finding the target group it is easy to get lost in the process. This is why the simplicity of this framework is very helpful and keeps all the aspects of the development process visible and clear. Analyzing product strategy and performance becomes easier with a VPC and because of that the whole process is more time and cost efficient.

Tips to successfully using the Value Proposition Canvas 

There are a few important tips to follow when creating a Value Proposition Canvas to get the best out of using this framework. Firstly, while filling out the canvas one of the most important things to remember is that, despite the correlation between the two main blocks, each part is a separate unit. Not differentiating these two elements is one of the most common errors. All of the components are unique yet correlated. Also, going further into dividing specific parts of the project, it is crucial to create each customer segment with different gains, pains and jobs. They all are slightly different so this gives you an option to create a value proposition for every segment separately

Another thing that is important to keep in mind, is that the framework, despite being very thorough, might not take all possibilities into account. Humans can be extremely unpredictable and it is impossible for a tool like this to foresee every possible scenario. Even though we put a lot of focus on potential customers’ needs and fears, and try to predict their behavior, there are factors like impulsive and emotional shopping that those frames cannot always account for. The human factor is always a bit uncertain and we simply have to accept that and try our best to predict the most we can. 

Conclusion

The Value Proposition Canvas is a useful tool for both startups and entrepreneurs that want to enhance their business. It gives a project a graphical expression of customers’ needs and lets you focus on the key factors that will boost the project. Thanks to the Value Proposition Canvas it is easier to figure out the best way to match products to the target market. Its main goal is to ensure that the product you want to develop is based around what customers really want. All of this will help create the perfect product and satisfy clients, which is what every business owner wants.

Adam

Adam Detko

Head of Sales