Shree Krishna Subedi, August 18, 2017
A value is created when the company creates goods or provides services to solve the problem faced by customers. A value proposition is a promise by a company, a promise of the value to be delivered.
It is essential to first identify the problem-solution fit and analyzing whether the problem is worth solving and whether the problem is underserved. Further, the search for the correct product-market fit is also equally important where the companies can analyze whether they have built a product that the customers really want.
Value proposition is a clear statement that explains how your product solves the customer's problems or improves their situation and tells the customer why they should buy from you and not from the competition.
There are various ways on how a company can add value to its products and hence to the consumers. Although as simple as it may seem, it is difficult to identify where a company can add value within the value chain process. A tool like value proposition canvas is an effective way to make this process easier.
The Value Proposition Canvas is like a plug-in tool to the Business Model Canvas. It helps to design, test, and build the company's Value Proposition to customers in a more structured and thoughtful way, just like the Canvas assists in the business model design process
Value proposition canvas composes of two blocks, the value proposition and the corresponding customer segment that one is targeting.
The customer segment effortlessly collects what the customers are trying to get done (jobs), what annoys the customers before, during and after getting the job done (pains) and what outcome and benefits customers want (gains).
This value proposition customer segment has scrutinized the core issues at hand and points out a way towards solving it. This is when the value proposition comes into use. The value proposition explicatively describes how the products and services create value. It addresses the customer profile created before hand.
It consists of what the company offers to customer (products and services), how exactly these products alleviate specific pains (Pains), how these products and services create customer gains (gain creators).
Companies with no outlook of the problems that they are trying to solve will encounter a loss in direction. As a result, these companies become unable to deliver the value they promised. In modern times, using tools like value proposition canvas will definitely assist in identifying and working on a distinct idea of the problems they are trying to solve and what value they can provide.