The key to any successful business model is a clear and compelling value proposition: Why do customers come to you and not to the competition? Unfortunately, not all companies give much thought to this important question.

As a consultant at RevelX, I have fascinating conversations with many innovators. Many of them have awesome ideas that result in beautiful products. But, inspired as these entrepreneurs are, sometimes they forget the ironclad rules of the market. Because, in the end, it is not how much you like your product that counts, but whether it fulfills the needs of your customers in a compelling way.

The key is not to be focused on products and their attributes but on the buying public. In other words, you have to define a winning value proposition which addresses a real and compelling need. A great way to accomplish this is Value Proposition Design.

What is Value Proposition Design?

Value Proposition Design helps you focus on what customers really want, what problem you solve for them, and where their pains and gains lie. Anyone who does this in a structured and visual manner, for example by using a Value Proposition Canvas, can refine his value proposition and be better informed by and about his customers.

The Value Proposition Canvas consists of the following elements:

  • Jobs-to-be-done: What is the job the customer wants to be done in their work or life?
  • Pains: What is annoying or troubling your customer? What is preventing them from getting the job done?
  • Gains: What would make your customer happy? What would make their life and the job-to-be-done easier?
  • Products and services: What are the products and services you can offer your customer so that they can get their job done in an efficient and productive way?
  • Gain creators: What can you offer your customers to help them achieve their gains?
  • Pain relievers: How can you help your customers by relieving their pains, that is, their problems and difficulties?

A Value Proposition Design Example

At RevelX, we helped Trendiy improve their value proposition. The do-it-yourself (DIY) window decorations manufacturer was facing severe price pressure from its key clients, the DIY retailers. Branding, product features, and designs had not had sufficient positive effect on their buyers who kept increasing pressure on pricing.

Using the Value Proposition Canvas, we researched the buying structure at the DIY retailers and the criteria for success of the buyers. We found out that the financial performance of shop space was of greater importance than product design, brand, and other factors. Financial performance was largely influenced by logistic processes.

This new value proposition addressed Trendiy’s logistic performance much more prominently than their competitors did. The result was that the remaining customers were very happy and impressed with the new proposition. Lost customers returned, and revenues started to grow again. It is now a few years later, and the company is in its best financial position ever.

Some Concluding Advice

Finding the perfect product/market fit takes some practice and patience. Although the model seems simple, it requires some real dedication to make it happen. At RevelX, we help organizations to define and fine tune their value proposition.