BOOK SUMMARY 182 Value Proposition Design
·
Summary written by: Kate Cadet
"In today’s hypercompetitive world,
customers are surrounded by an ocean of tempting value propositions that all
compete for the same limited slots of attention"
- Value Proposition Design, page 58
Creating
products and services that customers actually want can seem like a never-ending
quest when you are in business. Value Proposition Design, a
contemporary alternative to traditional business books, is an extensive toolkit
of results-focused, shareable, easy-to-understand, applicable ideas that will
help you stop creating “stuff nobody wants”.
Designed
by the entrepreneurial team at Strategyzer, (the authors of international best
seller Business Model Generation), Value Proposition Design centres
on a strategic management tool, the “Value Proposition Canvas” to plan, try-out,
make and manage the items you sell.
Divided
into four practical sections: Canvas, Design, Test and Evolve, the
core theme in each chapter is aimed at helping you uncover and realise ideal
product “fit” – where your customers’ needs are meet by your value proposition.
The Golden Egg
Knowledge really is power
"Step into your customers’ shoes."- Value
Proposition Design, page 23
Whether
you are a start-up or an existing business, correctly defining your customer
segments will help you and your business stakeholders better understand what is
most valuable to a customer.
Of
course it’s tough knowing and appreciating what matters most to customers if
you aren’t prepared to step into their shoes. Daunting as the step seems, using
the recommended Customer (Segmentation) Profile is an easy
tool for understanding customers in a way that allows you to experiment and
evolve ideas within the everyday business context.
The Customer
Profile is a 3-segment visual map to help you plot and understand the
jobs (personal or work related) that your customers are trying to achieve on a
regular basis, while identifying the most advantageous and undesirable benefits
or attributes, referred to throughout the book as “pains” and “gains”,
customers look for in products and/or services that will help get their tasks done.
Suggested
“trigger questions” lists within the Canvas chapter also help
with creative thinking as you set about creating your first Customer Profiles.
You and your team members will soon be ranking the most important and
insignificant specific “gains” or “pains” customers may be facing by asking
questions like:
·
“What are the main difficulties and
challenges our customers encounter?”
·
“What would make our customers’ jobs or lives
easier?”
·
“What risks do customers fear?”
·
“How do our customers measure success and
failure?”
In a
written context using the authors’ example profile of a “Business Book Reader”,
segmenting this potential customer type with the Customer Profile tool
revealed the following key insights:
·
Business book readers largely undertake the
“job” (task) of reading.
·
To improve their skill set and advance their
careers – a “gain”.
·
That being stuck in a career or jeopardising
one is a “pain” that ranks highly for this customer group.
Therefore,
a proposition to write a business book that is easy to use leads to results and
helps communicate and sell ideas internally would be valuable to a potential
business book customer.
Gem #1
Lightbulb moments
"The process is iterative rather than
sequential."- Value Proposition Design, page 62
The
Strategyzer Team practice what they preach. You can’t help but like
advice that is both practical and credible. The value proposition for the book
itself has been inspired, tested, re-modelled and finally created using all of
the instruction they impart, page after page.
It
becomes clear however, that the job is not done and dusted once you have
profiled your customers; the real opportunity to take back to your teams is a
system that enables you to identify the value your proposition can really offer
them; understanding that to remain relevant, you must continue to nurture and
evolve the “fit” of your products and services to match customer needs.
Before
you design your value proposition, however, take the time to review ten of the
characteristics that make great value propositions outlined in the book:
·
Great value propositions are embedded in all
great business models.
·
They focus on the jobs, pains and gains that
matter most to customers.
·
They focus on unsatisfied jobs, unresolved
pains and unrealised gains.
·
They target few jobs, pains, and gains, but
do so extremely well.
·
They go beyond functional jobs and address
emotional and social tasks.
·
They align with how customers measure success
(personally and professionally).
·
They focus on jobs, pains and gains that a lot
of people have or that some will pay a lot of money for.
·
They differentiate from competition on jobs,
pains and gains customers care about.
·
They outperform competition substantially on
at least one dimension.
·
They are difficult to copy.
This
list will help you stay focused as you start exploring ideas for your value
proposition and assessing viable alternatives.
Gem #2
Don't Judge. Listen.
"In a great feedback culture people feel comfortable
presenting (bold) new ideas early, knowing that they will evolve
substantially…"- Value Proposition Design, page 134
There
are many new ideas, considerations, insights and value propositions that you
will ultimately want to put to the test with your immediate team and wider
company stakeholders as you work though your Visual Proposition Map.
The Strategyzer Team stress throughout the book the importance of getting
buy-in early, and continuously, from your colleagues to make sure your
strategic work and conversations deliver actionable and relevant outcomes that
align with your Value Proposition Canvas.
De
Bono’s Thinking Hats framework remains a valuable business model for collecting
effective feedback. In Value Proposition Design, the authors have
taken a new approach on the classic model by using just four (white, black,
yellow, and green) of de Bono’s six thinking hats to gather feedback in the
following six step sequence.
·
Step 1 – Pitch: present the
idea and value proposition or value canvas for a maximum of 15 mins.
·
Step 2 – White Hats on: Your
audience members can ask clarifying questions around the information and data
for 2-5 mins.
·
Step 3 – Black Hats on:
Participants quickly write down the reason they thinks your idea is a bad one –
difficulties, weaknesses are read out loud.
·
Step 4 – Yellow Hats on:
participants quickly write down a point each on why the idea is useful and then
discussed.
·
Step 5 – Green Hats on:
alternative solutions to evolve the ideas are discussed in an open forum.
·
Step 6 – Evolve: The presenting
team takes the 4-hat feedback and evolves the idea.
The
compelling viewpoint for suggested success from the authors is to encourage
your entire team to change their mindset and embrace a new way of “decision
making” centred on information gathering and the power of feedback. You need
them to listen to, not judge what you are proposing.
Value
Proposition Design is a fantastic resource for existing
businesses and new start-ups. Buying the physical book will unlock access to a
stack of additional and awesome downloadable resources.
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