The Value Proposition Canvas is a tool that helps you understand what value you bring and how to communicate it to your customers. It’s a plugin for the Business Model Canvas (BMC).

The Value Proposition Canvas

Within the framework of today’s session Christoph will further expand our BizMo knowledge and tell us more about another canvas, the value proposition canvas (VPC).

Hi Christoph! Thank you for joining us again. So, you brought us another canvas today, I heard. We’re already super curious – Please tell us more about the value proposition canvas.

Hello Ulrike! Thanks for having me again.

Last time I told you about the 9 elements of the business model canvas. One of these 9 elements is the value proposition. But that’s not all: It is also the most important element of the business model canvas, that’s why I would like to go more into detail. I work a lot with the canvas and in my experience the value proposition is one of the most difficult and at the same time most crucial parts of a business model.

But let’s begin with an easy question: What is the value proposition canvas?

👉 The value proposition canvas is another tool created by the group around Alex Osterwalder, inventor of the business model canvas. Just like the business model canvas, it breaks the problem of identifying the value proposition down into discrete parts. This allows a person or team to address each part, step by step.

The right side of the canvas profiles the customer by asking (Customer Profile):

Customer Jobs: What jobs are they trying to accomplish?
Pains: What’s hard or unpleasant (pains) about their current way of doing it?
Gains: What’s desirable or delightful (gains) in an ideal solution?

Once you understand your customer you can turn to the left side which maps out the value proposition by asking (Value Map):

Gain Creator: How do we create or increase the customer gains?
Pain Reliefers: How do we soothe the pains they experience?
And finally our Solution: What is our offering?

A solutions does not always have to offer pain reliefers and gain creators at the same time. It might be sufficient to only focus on one side.

(If you want to download a template for the VPC, we recommend downloading it here. You will also find a short video here, explaining the VPC)

Great explanation Christoph! Could you also explain us why we should use the VPC?

Well, there are a few benefits you can expect:

You get a better customer understanding! I think this reason is obvious since you begin by analyzing your customer. It makes you more customer centric. It gives you the possibility to take the customer’s point of view.
The right focus and product development direction: Knowing your value proposition makes it that much easier to get your product or service moving in the right direction. The tool acts as fundamental guidance to stay focused and keep the track. It lets you understand your customers, what they need, and how to make them happy. Based on that, you can shape the idea of what features and functionalities the product should possess.
It’s easy to use and practical: it’s simple, straightforward, and intuitive design make the value proposition canvas a uniquely quick, functional, and analytical way to strengthen your product strategy and your overall business.
Right messaging + effective marketing: Building your VPC is a way to find how you should approach your customers and what you need to promise them. The people who will buy the product must understand what it offers and why it’s worth their money. Your solution will provide a particular value, and you need to put in the customers’ minds the explanation of what is so remarkable about it.

These are just some of the reasons you need to focus on your value proposition.

These are definitely some convincing arguments to use the VPC. Thanks for sharing your knowledge with us today.

Thank you for having me today Ulrike. I can’t wait for our next session together!

In our last BizMo article, business model expert Dr. Christoph Meister explained the business model canvas and why it is a helpful tool. If you are interested, follow this Link.