Author: Mike Fletcher
Does your business provide a compelling value proposition to each segment of your customers?
A compelling customer value proposition (“CVP”) significantly would enhance your business’ prospects of success as it responds to customers’ expressed wants and needs, or it appeals to their unexpressed wants and needs, thereby differentiating your business’ products or services from the competition. A compelling CVP would solve your customer’s need or addresses a problem, or alternatively provides a desired or surprising benefit.
Abraham Maslow conducted research on people’s varying needs and how these influenced their motivation. He found that people’s needs could be classified in a hierarchy, one level building on another. From the lowest level to the highest, these are: survival; safety; social; self-esteem; self-actualisation. This theory has implications for how job descriptions are designed for employees, and also how products and services are designed for and delivered to customers.
Alexander Osterwalder of Strategyzer has developed a really useful diagram which explains how you would develop a CVP based on your understanding of your customers’ needs and wants – see below. By understanding the specific requirements that customers have for the features of a product or service, what risks or issues they would use the product or service to address, what desired or surprising benefits they would enjoy, you can begin to develop a compelling CVP for your business. In the diagram below, these elements are drawn on the right hand side as “customer jobs”, “pains” and “gains” respectively. Your CVP would then address these 3 elements by identifying features of “products & services”, “pain relievers” and “gain creators”, all drawn on the left hand side. Proper alignment of the each side would enhance your business’ success. This concept is explained in more detail in this clip.
Once you have developed a compelling CVP which is aligned to your business’ vision and mission statements, you would then be able to build a robust business model to deliver this CVP to your business’ customers (more on this concept in a later post).