How to create a value proposition?

Value Proposition - a clear and simple explanation of the benefits consumers get by purchasing a product or service.

In this article, I'll explain how to create a value proposition using the Value Proposition Canvas (VPC) tool. With VPC, you can better test ideas and plan the product's functionality.

The customer segment is located in the circle on the right. This pattern describes the motivation for purchase and consists of three elements:

• Needs (jobs)
• Problems, blockers, pains (pains)
• Advantages, benefits (gains)

Together, they answer the question, "Why does this person buy the product?"

The product is described in detail in the box on the left:

• Products and services: what makes up your value proposition
• Pain relievers: how the product solves problems
• Gain creators: how the product enables advantages

If the pain relievers and gain creators address the problems and expectations, then the value proposition is considered aligned.

How to work with this tool?

Start by filling out a template on paper. Print it in A0 format, hang it on the wall, and use sticky notes for brainstorming. Perform 3-4 iterations, then digitize and transfer the data to an online board for refinement. Expect many corrections; this is normal.

Needs (jobs)

With the TBD (to be done) methodology, you can answer the question: "Why does the consumer buy the product?"

Example: A product to clean car glass that "improves driving safety." Do you think advertisers have correctly formulated my need? I certainly want safe driving, but is that why I buy a cleaner? Do I feel "greater safety" after buying it, especially if dirty glass rarely causes traffic accidents in my city? No. I "hire" the cleaner for a much simpler job: cleaning the glass. I'm more interested in how well it cleans. "Driving safety" is too strong and global a motivation for such a simple product.

Problems, blockers, pains (pains)

Key question:

What does the customer dislike right now when performing the "job"?

Problem formulation = understanding how to solve it.

Example: "Problem of filling out the document" - not clear what the problem is or how to solve it. "You have to read overly complicated reports" - solution: simplify the report forms.

Advantages, benefits (gains)

Key question:

When the consumer "hires" your product to "work," what result does he want to achieve?

Gains are an entity in the customer's imaginary future. After the "new behavioral economy," it became clear that humans are irrational. Gains can be basic, expected, or a "wow effect." Pains and benefits together form a positive and negative motivation to buy.

The product consists of goods and services. Properties are the characteristics of the product. You can say, "Our product has this feature." The impact is what a property does to a problem or benefit.

The cleaner is a product. Nanoparticles and the coffee aroma are pain relievers and gain creators. They "keep the glass clean for longer" and "provide a pleasant smell."

We need to derive related statements for market use. For this, we use the design thinking tool "Point-of-View" (POV). This means evaluating the situation from a specific perspective and guiding the team's work.

Our glass cleaner helps car enthusiasts who want to keep their glass clean, as it keeps the glass clean for longer thanks to nanoparticles. Moreover, it provides a pleasant aroma of expensive coffee in the car's interior.