Think of a product or service that you love using. Why do you value it so highly?

Personally, I think of my heated clothes airer, Nest smart speaker or, perhaps more simply, a flat white from my local deli. For Ian, one of our founders, it’s his Bose headphones that he uses every single day. Have you thought of yours yet?

What you’ve chosen might be cheap, expensive, simple, complex, bland or beautiful, but that doesn’t really matter, does it? What matters is that it gets the job done in a way that relieves some annoyance or pressure from your day, even giving you added benefits on top of the practical need that it meets.

Taking my flat white as an example, it hits the bar of quality and it’s close by, but the added benefit is the service and kindness of the staff who love to ask how I’m doing. That is what keeps me coming back; I might even head down right now and get one! For Ian, his headphones serve the purpose of next level noise cancellation and quality sound, with the added perk of being super comfortable, meaning he has the luxury of being able to wear them all day every day.

Every start-up is in the business of creating enough value for customers that they’ll choose you instead of the competition. For those who aren’t thinking this way, it’s going to be difficult to survive.

To help start-ups create products, services and messages that draw customers in and keep them there, we use a tool called the Value Proposition Canvas (VPC). You might have heard of the Business Model Canvas, a tool by Strategyzer used to visualise an entire business plan on one page. Well, the VPC is a close-up view of your customers who are, we believe, the starting point of your business.

 

How to use the Value Proposition Canvas

Businesses start in people’s brains. A random connection or experience triggers a solution, spurring creatives into action. We’ve all been there.

The problems start when people assume that, because they love their idea, and their mum loves their idea, everyone is going to run with it! The VPC runs up against this. It is about designing products or services based on the reality of who your customer is, not who you want them to be, or think they are. It does this by helping you to visualise your customer and what you offer, all on one page:

 

The right-hand side is your customer profile, where you explain your customer and what they really care about, based on what you have observed, conversations you have had and tests you have run.

The customer profile is split into three sections:

1.     The job, or jobs, they are looking to get done

2.     The pains they experience when trying to complete these jobs

3.     The gains/benefits they require, expect, desire or would be pleasantly surprised to get

Diving deep and wide into each of these sections creates a rounded picture of your customer base, which can only serve to benefit you and your business.

The left-hand side is the value map. This is about making choices about which jobs, pains and gains to focus on. Which are the most frustrating? Which are underserved? What are competitors doing poorly and how can you fill that gap?

Think of Giffgaff as an example. Giffgaff saw that people hated being trapped in fixed 24-month contracts, so they pushed hard to rectify and go above and beyond those pains. As a result, they have built a huge customer base of over 2.5m people.

When your offering matches up to your customer profile, you achieve the holy grail of product-market fit; people become excited about your product! Your start-up isn’t a classroom exercise, and your amazingly designed value proposition may not generate interest in the real world; therefore research, testing and learning are all essential parts of the process.

 

How does this relate to impact-driven start-ups?

As an impact-driven start-up it is all too easy to fall into the trap of relying on your impact to sell your product. But selling your product is what is required to make an impact. By that I mean, to win customers over you need to create a razor-sharp offering that clearly speaks to their most pressing needs and delights them in ways they didn’t expect.

Of course, if, through your research, you discover that your impact (be that social or environmental) sits high on your customers’ list of priorities, or if it’s your one niche that makes you stand out, by all means make it a major part of your messaging. However, if it is 5th or 6th on the list, treat your impact as the cherry on top, rather than the whole cake. If every purchase contributes to making a legitimate, measurable impact, then the more you sell the bigger the difference your business will be able to make. Discovering how to prioritise the messaging and communication around your impact-driven business is vital and the VPC is an invaluable resource in this process.

Figuring this stuff out isn’t easy at the best of times. Every single business is different, and each one has varied customers; there is no one size fits all. However, taking the time to understand your customers as they really are, creating something that speaks to that and going beyond their expectations will aid you massively in your impact start-up journey.

So, think back to that product or service you had in your mind when you started reading. Are you ready to provide the same satisfaction and delight for someone else through what you’ve created?

The Value Proposition Canvas is a foundational tool on the Impact Central Accelerator Programme and one that we work through with every founder; to find out more about our programme and how we work with impact start-ups, ‘book a call’ TODAY!