Product Management

Value Proposition Formulation Map

Aleksandr Kosenko

19 Jul 2024 • 7 min read

A look at the business model from the product manager's point of view
CANVAS 13 - Great guide on the business model, from the product manager's point of view

1 – Customer Problem
2 – Customer Segments
3 – Value Propositions
You are here ➔ Value Proposition Formulation Map
4 – Customer Relationships
5 – Channels
6 – Revenue Streams
7 – Key Activities
8 – Key Resources
9 – Key Partners
10 – Cost Structure
11 – Eco-Social Costs
12 – Eco-Social Benefits
13 – KPI (Key Performance Indicators)

Introduction

The article examines the key components of a value proposition model and describes how products and services can address customer needs, solve their problems, and increase profitability.

Product

Products and Services:

This section should clearly and thoroughly describe the characteristics and functions of our product or service. These should be features that purposefully solve problems or meet the needs of our customers.

Products and services are the foundation of your business’s value proposition. They should:

Satisfy customers' functional, social, and emotional needs.
Include both core and additional offerings, enhancing the customer experience at every stage: from purchase to co-creation of value and repeat sales.

Pain Relievers:

Before developing a solution, conduct a thorough analysis of customer problems. Consider aspects such as time savings, ease of use, information accessibility, and cost.

This section describes how products and services reduce or eliminate customer difficulties related to:

Saving time and money.
Improving the quality of existing solutions.
Simplifying tasks and processes.

Profit Creators:

We describe the benefits of our solution based on the expectations and needs of customers.

Here you should describe in detail what benefits your solution brings to customers, paying attention to:

Resource savings and achieving expected results.
Simplifying the lives of customers and meeting their aspirations.

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Customer

Customer Tasks and Responsibilities

Our goal is to make your business profitable and sustainable. We aim to increase the average check, expand the customer segment, develop and launch new products. We help identify weaknesses in your business and turn them into strengths.

Describe the functional, social, emotional, and core needs your customers seek to meet and the tasks they want to accomplish.

Customer Problems and Challenges

Customers often face chaos and information overload, have difficulties understanding where to start and what to do next. They may also face the problem of choosing a competent service provider.

Identify the difficulties customers face when trying to accomplish their tasks and the negative emotions, situations, and risks that arise in this process.

Customer Benefits

We offer our clients extensive knowledge about their business, which helps to increase their profitability. We also strive to reduce the risks and costs associated with running a business.

Here you need to identify the practical, emotional, and social benefits customers expect from accomplishing their tasks and the results that can exceed their expectations.

Product

Products and Services

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It is important to clearly define the products and services that are the foundation of your value proposition. What specific products and services do you offer to help your customer accomplish their functional, social, or emotional tasks? What products and services meet the core needs of your customer?

Pay attention to the additional products and services you provide to support your customer in various roles:

Customer-Buyer: What products and services do you offer to help customers compare offers, make decisions, purchase, and receive the selected product or service?
Customer-Co-Creator: What products and services do you provide that help customers co-develop solutions or add value to an existing solution?
Customer-Transferor: What products and services do you offer that help customers dispose of a product, transfer it to another person, or resell it?

These products and services can vary in form: tangible (such as manufacturing goods or real-time service), digital or virtual (such as downloads or online recommendations), intangible (such as copyrights or quality guarantees), or financial (such as investment funds or financial services).

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Finally, assess the importance of each product or service to your customer. Are they vital or rather supplementary for your customer?

Profit Creators

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Describe in detail how your products and services create advantages for customers. How exactly do they help meet customer expectations, what benefits do they bring that may be unexpected or desired, including functional ease of use, social benefits, positive emotional impressions, and resource savings?

Your solutions should aim to:

Save resources that your customers value. For example, saved time, money, or effort.
Achieve results that meet or even exceed your customers' expectations. For example, improved quality, more or less of a certain parameter.
Surpass current solutions, which can delight your customers. For example, considering specific features, increased performance, quality.
Simplify your customer's work or life. For example, simplifying the learning process, ease of use, accessibility, additional services, reduced ownership cost.
Provide positive social consequences that your customers desire. For example, improving their public image, increasing their power or status.
Offer what customers are looking for. For example, good design, guarantees, special or additional features.
Satisfy customer aspirations. For example, helping to achieve significant goals, easing their tasks.
Create positive outcomes that meet your customers' success and failure criteria. For example, improving performance, reducing cost.
Make it easier to decide in favor of your products or services. For example, reducing cost, lower investments, lower risk, improved quality, performance, design.

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Prioritize each benefit that your products and services create, based on its importance to your customer. Is this benefit significant or minor? For each benefit, indicate how often it manifests.

Pain Relievers

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Describe in detail how your products and services are designed to ease customer problems. How do they help reduce or eliminate negative emotions, undesirable costs and situations, as well as risks that your customer may face before, during, and after the job is done?

Your products and services:

Help save resources? (For example, time, money, or effort)
Improve customer satisfaction? (For example, eliminate negative points that cause customer dissatisfaction)
Enhance the effectiveness of existing solutions? (For example, add new features or improve quality)
Eliminate complexities and problems that customers face? (For example, make tasks simpler)
Minimize negative social consequences that your customers might experience or fear? (For example, loss of respect, power, trust, or status)
Reduce risks that may worry your customers? (For example, financial, social, or technical risks)
Allow customers to be calm? (For example, solve major problems or eliminate anxiety)
Limit or eliminate common mistakes that customers make? (For example, errors in using the product or service)
Remove barriers that prevent customers from making a decision? (For example, by reducing initial costs or easing the learning process)

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Rank each problem that your products and services help eliminate by its level of importance to the customer. How serious is this problem for the customer? How often does the customer face each of these problems?

Customer

Customer Benefits:

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Describe the benefits your clients expect, strive for, or that could pleasantly surprise them. This can include practical benefits, social advantages, positive emotions, and economic gains.

What savings (time, money, or effort) can bring pleasure to your customers?
Consider what results clients expect from your products or services, and what could exceed these expectations?
What aspects of current solutions bring pleasure to your customers? These can be specific features, high performance, quality, etc.
What could make your customer’s work or life easier? This can include an improved learning curve, more services, reduced ownership costs.
What positive social consequences do your customers desire? This can be the desire to look good, increase their power or status.
What are customers looking for in products or services? This can be good design, guarantees, special or additional features.
What do your customers dream about? This can be a great achievement, significant easing of their tasks.
How do your customers measure success and failure? This can be performance, cost, etc.
What could increase the likelihood that clients will decide in favor of your products or services? This can be reduced cost, lower investments, lower risk, improved quality, performance, design.

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Rank each benefit by its significance to your customer. Is this a significant or minor benefit? Indicate how often the customer encounters each benefit.

Customer Problems and Challenges:

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Describe the problems and challenges your customers face in the process of accomplishing their tasks. These can be negative emotions, unfavorable situations, or risks that may arise before, during, or after the job.

What aspects do customers find too costly? Consider which factors may be too expensive for them, whether it be time, money, or effort.
What problems cause inconvenience for your customers? These can be sources of irritation, troubles, or headaches that hinder them.
In what ways do current solutions not meet your customers' needs? Consider what might not satisfy their needs, whether it be lack of certain features, insufficient performance, or operational failures.
What major difficulties and problems arise for your customers? This can include problems understanding how things work, obstacles to achieving their goals, or resistance to change.
What negative social consequences might your customers experience or fear, such as loss of respect, power, trust, or status?
What risks concern your customers? These can be financial, social, technical risks, or potential catastrophic consequences.
What worries may keep your customers up at night? These can be major problems, anxieties, or fears that disturb their peace.
What common mistakes do your customers make? Consider what mistakes they typically make in the process of accomplishing their tasks.
What obstacles prevent your customers from making decisions, such as high initial investments, the complexity of learning, or resistance to change?

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Rank each problem by its impact on your customer. Is it a serious problem or not so important? Determine how often each of these problems occurs for your customer.

Client's tasks and responsibilities:

It is important to understand what exactly your client is trying to accomplish. This can be categorized as follows:

Functional tasks: Your clients may face specific tasks or problems they want to solve. An example could be completing a particular job or solving a specific problem.
Social tasks: These tasks are related to the client's social status. For example, they may want to improve their public image, increase their power, or enhance their status.
Emotional tasks: Your clients may have emotional needs they want to satisfy. These could include needs for aesthetic appeal, evoking positive emotions, or ensuring safety.
Basic needs: Basic needs may encompass more general human needs, such as the need for communication or sexual needs.

Your client will also perform additional tasks in various roles related to their primary task. These roles may include:

Buyer: Here, they can improve their image, increase power, enhance status, etc.
Co-creator: Here, the client may work on improving aesthetic appeal, evoking positive emotions, ensuring safety, etc.
Transformer: Here, the client may facilitate product disposal, transfer, or resale.

It is important to rank each task by its importance to your client. Is it significant or insignificant? Indicate how often each task is performed.

Additionally, it is important to determine the specific context in which the task is performed, as it may impose constraints or limitations. For example, the task may be performed while driving a car or outdoors.

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