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How do you communicate your value to customers? In this article, we'll explain what a Value Proposition is, how to create your own Value Proposition Canvas with examples, how to customize our template to get you started, and if you read until the end, you'll learn how Gamestop – the video game retail that was about to go bankrupt in 2020 – communicates the value proposition of its new NFT marketplace.

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Gamestop's value proposition contributed to its recovery from near bankruptcy by effectively communicating the value of its new NFT marketplace to its customers. This new venture allowed Gamestop to tap into the growing market of digital assets, providing a unique offering that differentiated it from other video game retailers. This strategic move attracted new customers and retained existing ones, ultimately contributing to its financial recovery.

There are several alternative methods to communicate a value proposition. These include: using clear and concise language that resonates with your target audience, leveraging social proof such as testimonials or case studies, demonstrating the value proposition through a compelling story or narrative, using visuals like infographics or videos to illustrate the value proposition, and offering a unique selling proposition that sets your product or service apart from competitors.

A company can align its value proposition with customer perception by understanding the needs and wants of its customers, and then tailoring its products or services to meet those needs. This can be achieved through market research, customer feedback, and regular interaction with customers. The company should also ensure that its marketing and communication strategies accurately convey the value proposition to the customers. It's also important to consistently deliver on the promises made in the value proposition to maintain customer trust and satisfaction.

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Our customizable Value Proposition (Part 2) template includes some of the top tools to evaluate if your value proposition matches customer expectations and perception, such as a Value Proposition Canvas, Value Proposition Statement, the Pain vs Gain Ratio, a Customer Value Perception map, and a Product Features Audit, plus 25 other tools which you can use to position your products better.

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These tools can help a business improve its relationship with its customers by providing a framework to understand and match customer expectations and perceptions. The Value Proposition Canvas and Statement help identify and articulate the unique value a business offers. The Pain vs Gain Ratio helps understand the balance between the benefits (gains) a product offers and the costs (pains) it imposes on customers. The Customer Value Perception map provides insights into how customers perceive the value of a product. The Product Features Audit helps evaluate the features of a product against customer expectations. By using these tools, a business can better align its products with customer expectations and perceptions, thereby improving customer relationships.

Some best practices for using these tools to evaluate a business's value proposition include: understanding the customer's needs and expectations, using the Value Proposition Canvas to map out how your product or service meets these needs, using the Value Proposition Statement to clearly articulate your value proposition, using the Pain vs Gain Ratio to assess the balance between the benefits and drawbacks of your product or service, using a Customer Value Perception map to understand how customers perceive the value of your product or service, and conducting a Product Features Audit to ensure your product features align with your value proposition. It's also important to regularly review and update these tools as customer needs and market conditions change.

These tools can help a business understand the value its products provide to its customers by evaluating if the business's value proposition matches customer expectations and perception. The Value Proposition Canvas and Statement, the Pain vs Gain Ratio, a Customer Value Perception map, and a Product Features Audit, along with 25 other tools, can be used to better position the products according to the perceived value by the customers.

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Tool highlights

Value proposition canvas

A traditional Value Proposition canvas visualization represents the company's offer on the left, and the customer segment on the right. Both need to address three key things. On the Value prop side, the first third covers the details of your product or service. The second lists the gains that the product or service provides to the customer. The third is the pain relievers the product offers. This is arguably the most important portion of the value statement, but we address the proper balance between gain versus pain maneuvering below.

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A Value Proposition Canvas can be used to drive business growth by helping a company to clearly define and understand its value proposition. This involves detailing the product or service, listing the gains it provides to the customer, and identifying the pain points it alleviates. By doing this, a company can ensure that its product or service is meeting the needs and wants of its target customer segment, which can lead to increased customer satisfaction, loyalty, and ultimately, business growth.

The Value Proposition Canvas can be used to increase customer satisfaction by focusing on the pain relievers and gains that your product or service provides. By understanding and addressing the customer's pains and gains, you can tailor your product or service to meet their needs and expectations, thereby increasing their satisfaction. It's also important to maintain a balance between the gains and pain relievers to ensure that you're not overpromising and underdelivering.

A Value Proposition Canvas can be used to identify areas for improvement in a product or service by examining the three key areas it addresses. These include the details of the product or service, the gains it provides to the customer, and the pain relievers it offers. By analyzing these areas, one can identify where the product or service may be lacking and thus find areas for improvement.

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On the other side, the same elements of a value proposition are addressed from the customer's point of view. The customer has particular pains that need to be solved, and they should also find benefits in the product or service that are directly applicable to their needs. The last third is "customer jobs", or the tasks a customer needs to accomplish with a given product or service offering. A strong value prop addresses all three of these customer needs and how your company will answer them.

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A company can use its value proposition to attract new customers by clearly communicating how its product or service addresses the customer's needs, solves their problems, and helps them accomplish their tasks. The value proposition should highlight the unique benefits that the company offers, which are directly applicable to the customer's needs. This can make the company's offering more attractive to potential customers, thereby attracting them to the business.

The success of a value proposition can be measured in several ways. One way is to assess how well it addresses the customer's pains, benefits, and tasks they need to accomplish. This can be done through customer feedback, surveys, or market research. Another way is to evaluate its impact on sales and customer retention. If the value proposition is effective, it should lead to increased sales and customer loyalty. Lastly, the success of a value proposition can be measured by its differentiation in the market. If it successfully sets the company apart from its competitors, it can be considered successful.

A company can ensure that their value proposition is understood and appreciated by their customers by addressing the customer's specific pains, benefits, and tasks they need to accomplish with the product or service. The company should clearly communicate how their product or service can solve the customer's problems, provide benefits, and help them accomplish their tasks. This can be done through effective marketing and communication strategies, customer education, and providing excellent customer service.

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Value propositions can and should be continuously reevaluated over your company's lifetime, as the market perception of your offering changes over time. Your key value might also change based on your product or feature offerings and monetization strategy. (Slide 3)

Value proposition statement

So now that you have a canvas, how do you communicate all this to customers? A Value proposition statement is an external tool structured to communicate key value messages to customers. Here, the basic structure of the value prop canvas is listed. First, who is it for? What does that person need? What is your product or service? What benefit does it provide?

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For example, the product is "for freelance writers who have trouble getting clients to pay on time", the "software package tracks past-due payments and sends automated reminders so you can spend your time earning money..." (Slide 7)

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The extended value proposition is similar, except in this case, try to add a secondary sentence that covers why your product is different or better than other competitors with proof of the benefit to be delivered. (Slide 8)

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The gain vs pain ratio

What about a quantitative method to assess your value proposition? The general rule of thumb is that in order to overcome a customer's resistance to your product, you need a pain-to-gain ratio of 10 to 1. Here, a seesaw tracks product gains against the pain, or cost, to adopt the product. While your product might have gains like increased revenues, cost or time savings, or a competitive advantage like reduced time to market or faster customer acquisition, there are still costs for the customer to adopt you.

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There's a cost to find your company, cost to try your solution, cost to buy, and cost to implement, which takes inertia to overcome. And since your offering is an unknown alternative, you come with risk, as the customer's default is to do nothing, which takes zero energy. Position your value proposition to offer a net benefit that is so disruptive and defensible that it is ten times greater than the cost required to adopt your product or service. If you find your gain to pain score is less than 10 to 1, you should reassess how well you address the customer pain points. (Slide 11)

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Customer value perception

So how do you assess the customer perception of your value? Customer surveys can be used to collect input on what customers think your value is and why. A treemap diagram can then divide the value that customers perceive about your company into two main sections. In the example below, the two values are "overall quality" and "price." You can add additional branches if needed. While it sounds counterintuitive, the fewer values a customer perceives, the better. This is so your value proposition is not diluted by offering too much at once.

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Under each value, your distinctive business elements that determine the specific value can be listed. For example, under overall quality it could be reputational, it could be service related, or it could be based on billing. Under price, maybe your company always offers discounts. An alternative visualization plots this customer perception on a value perception map to compare how customers view your value versus how they perceive your competitors. (Slide 22-23)

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You can also use data from customer surveys to create a perceived value comparison table, which lists critical success factors that can be weighted and scored according to your company's most important components. These scores can then be compared against a "booster option" to include a little kick to each critical success factor. For example, a limited-time sale can temporarily boost the value perceived by customers, which would rank your pricing score higher. This functionality helps assess where boosters can improve your overall value. (Slide 25)

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Product features audit

So how do you determine where the value of your product or service comes from? A product features audit assesses who within the customer base uses what feature and how frequently they use that feature. This is a validation method to clarify what users genuinely value about your product, feature by feature. This insight guides what functionality you should hone in on and which to avoid.

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Oftentimes, customers value a product for a different reason than what it was designed for, in which case it's good to pivot your messaging and product development around what's working and what features are most desired. To more accurately assess usage, this graph can be edited and customized to whatever range or percentage of users makes the most sense to you. (Slide 18)

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Case study: GameStop

So how does Gamestop use the value proposition framework to communicate the core value of its new NFT platform to new customers? Here's the text straight from their website: "Power to the players. Buy, sell, and create NFTs at low fees and high speeds." This is a gain and also a pain for NFT traders. "Secured by Ethereum Mainnet and Loopring Layer 2, truly own your digital goods." The platform's secondary prioritization is "True ownership", a pain of current NFT traders. This second sentence also adds credibility. Connect your GameStop Wallet for a super streamlined experience."This is a secondary gain for novice traders who haven't traded NFTs before but trust the Gamestop brand.

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So how could Gamestop write this in a Value Prop Statement like we showed you above? "For players and traders who want low fee, high-speed NFT trading, the Gamestop NFT marketplace lets you buy, sell, and create NFTs with an easy-to-use wallet for a powerful, streamlined experience." And the second statement could be: "Unlike current platforms that offer high fees and slow speeds, our product provides low fee, high-speed trading, allowing for true ownership of your NFTs secured by Ethereum Mainnet and Loopring Layer 2 so you can truly own your digital goods."

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Conclusion

For additional tools and slides that are fully customizable like the Jobs-to-be-done Canvas, Value Prop Test Card, Value Prop Booster, Customer Empathy Map, Value Prop with Mockups, plus many more to save time and hours of work, download the Value Proposition (Part 2) presentation template today. And don't forget, we also have another Value Proposition template you can download for additional tools and visualizations.

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