37 Signals, business acronyms and screw drivers part 2
I wanted to share with you another tool that can help you with your value proposition.
Those of you that have seen the Business Model Canvas know that it is a simple tool which allows you to map out your current business model and then modify it. It contains a number of boxes, including partnerships, revenue streams, delivery, costs, key activities and key resources. Two of the biggest and most important are the Value proposition and Customer Segments boxes. Osterwalder, Pigneur and many other business experts believe you can’t even think of revenue until you have figured out, what the value is and to whom are you offering it. This is the DNA of your business model and everything else comes after this.
People are important, and should be put first before thinking about revenue. We have a choice as consumers about who we would like to do business with and often it doesn’t come down to price but who is offering the most value and how we are treated in the process. As a customer I want someone to understand what job I need doing and to offer me clear information about how they will do that. Whether that is to make me feel good, entertain me or offering me a service or product which will make a job easier.
So knowing your V.P (value proposition) is important and the key to be able to switch your business model and increase your customers but uncovering a value proposition can be challenging. A lot of the work I have been doing over the last few years has shown me that this has been one of the hardest things for companies to uncover and define in their business.
In the last blog I shared with you 3 questions to help figure out what your VP is, however, if you are serious about figure out what your customers or audience value, independent of your projects then the business model canvas folk have created a new tool which should help you redesign your business and create new solutions for your customers.
Firstly, it looks at what job a customer is trying to get done, on a functional, social and emotional level. Secondly, it covers what pains customers have experienced and what can a customer can gain. Lastly, it helps you list your current products, services and content and to rank them in order of success when it comes to’ getting the job done’.
Those of you who are following the lean start up method this works closely with the principle as you can design, test and build things that people really want.
It is a clever tool that can really help you define your value proposition and measure how your current products, services and content are doing. It is a very good process to go through with your board or team as it helps to clarify whether you are on the same page as your customers/audience or has the ‘job to be done’ shifted. This is only the first step but a crucial one to make sure you are, even more relevant tomorrow than you are today.