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Rethinking Value Proposition

Uwem March 27, 2017 59

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When designing a Business Model for a startup or any business at all,   a “Value Proposition” is an essential element. This Value Proposition is combination of products, services, information or experiences offered to a market to satisfy a need or want. Successfully creating a differentiated Value Proposition, ensure it is successful. This is what has made Uber, Airbnb, Apple, Amazon and similar companies great.

Over time, we have been taught to innovate by improving on products in the market, or creatively coming up with a new one. We’ve spent time viewing the market place from our point of view and not the way customer’s view it.

However, one thing to understand is:

Customers don’t buy products, they hire various solutions at various times to get a wide array of jobs done.

To illustrate this, when you buy a Pizza, your first thought was not “I want Pizza”. It might have been “I need fast dinner which i don’t have to cook”; “I am having friends over and we need to snack over something”, “I need to satisfy my cheese craving”. All these “thoughts” are your Job-to-be-Done (JTBD). This is essentially the higher purpose for which customers buy a product or service.

Coming up with a differentiated value proposition calls for understanding a customers JTBD, understanding the current pains and gains he experiences in fulfilling that JTBD, and then coming up with Pain Relievers and Gain Creators which essentially help form the product, service or solution you take to the market.

An illustration of this would be that a Taxi app that recognises that a Pain customers who want to get from Point A to Point B easily face in Nigeria is that current Taxi drivers do not use GPS services. They then come up with a Pain Reliever that helps un-educated drivers understand GPS.

A Gain might be enjoying music on your way to Point B, and they might create a Gain on top of that where the GPS service and a music streaming app work together; coming up with a final product that addresses this market.

You can understand a customer’s JTBD (Jobs To Be Done) by using Observatory research techniques such as “Empathic Design”, Mystery Shopping, Netnography, among others. Surveys and Focus Groups are also an option. However, customers find it difficult to articulate what they want hence it can be misleading.

In summary, you can use the JTBD framework to do the following and more:

  • define your market. For example, a taxi app for people who want to enjoy their nights out running only in the evenings.
  • Get your customer’s entire jobs done. The taxi app can offer alcohol/club recommendations, etc
  •  Get more jobs done for your customers. Get an app to pair people who just want half a pizza  and they each get half-a-whole pizza delivered.
  • Targeting a customer segment who will pay the most to get that job done. (This way you communicate only to people that place the highest value on your offering).
  • Focus R & D on getting the customers’ job get done better. (Looking at research this way, from the customers point of view, ensures you are ahead of the market at all times).

This presentation was given by Didi Uwemakpan at Startup Grind Lagos’ March Meetup

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