Value Proposition

What is the importance of knowing the customer profile in designing the value proposition for the business?
by Aminat Abubakar – Wednesday, 18 January 2017

Osterwalder & Pigneur, describes “value proposition as the benefits customers can expect from a company’s product and services” (2010, p.2).  The importance of an organization understands a customer profile in the design of value proposition cannot be overemphasize.  “The Customer (Segment) Profile describes a specific customer segment in your business model in a more structured and detailed way, it breaks the customer down into its jobs, pains, and gains” (Thompson, Jnr., Strickland III, & Gamble, 2010, p. 9).
The Customer Profile gives an in-depth understanding of a customer problem and need that aids an organization in the design, production, or customization of a value proposition in a business; there are three components identified as Pains, Jobs, and Gains.
Customers Jobs are those daily activities in a customer’s life or work that needs to be accomplish in order to solve a problem or satisfy a need, it is important for an organization to understand hierarchy placed on each problem and need, not to assume collectively as the same.

Customer Pain is the degree of discomfort a customer feels on trying to get job done before, during, and after an event.  An organization can decipher the degree of pain whether moderate or extreme, and level of significance to the customer.
Customer Gain is the result and values a customer would expect in solving a problem or satisfying a need.  Hyatt (2012) explains a “WOW” experience always exceeds customer expectation.  These benefits can be required, expected, or desired, but an organization must understand the relevance.

To sum up, successful value proposition is an organization’s in-depth understanding of Customer Profile through job rank, pain severity, and gain relevance.  Apple’s success is evident in its Apple iTune music store and Apple iPod, whereas, “Sony developed the Walktnan audio player, redefining the market for portable music devices, but failed to develop a successful MP3 player” (Koen, Bertels, & Elsum, 2011).  As such, organizations that miss on this critical aspect of Customer Profile run the great risk of value proposition failure.

In order for your organization to avoid risk of failure in your value proposition to the market, you should study the steps Apple took and applied, as well as other successful businesses in understanding the importance of customer profile in designing the value proposition for the business.  This cannot be over emphasize.

Value Proposition Canvas Explained 

References

  1. Hyatt, M. (2012). PLATFORM: Get Noticed In A Noisy World. Nashville, TN: Thomas Nelson Inc.
  2. Koen, P. A., Bertels, H. J., & Elsum, I. R. (2011). THE THREE FACES OF BUSINESS MODEL INNOVATION: CHALLENGES FOR ESTABLISHED FIRMS. Research Technology Management, 54(3), 52-59. doi:10.5437/08953608X5403009
  3. Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. Hoboken, NJ: John Wiley & Sons, Inc.
  4. Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014). Value Proposition Design. Hoboken, NJ: John Wiley & Sons, Inc.
  5. Strategyzer. (2014, July 21). Value Proposition Canvas Explained [Video file]. Retrieved from https://www.youtube.com/watch?v=aN36EcTE54Q
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