Create Your Business Model Canvas

Reflect on Your Customer-Centricity

That’s a fair concern. We have tried to represent the customer, and their needs, in our considerations so far, but almost everything we’ve captured is our own ideas of what matters to the customer (not theirs).

Once you are clear that you know what they need/want, you need to focus on what your customer needs the most. You cannot address all customer pains and gains. You must prioritize them and the pain relievers and gain creators that support them. From these you can pull together jargon-free descriptions of your value proposition. 

Finally, you should think (as much as possible) in your customer’s words. How might they describe your value proposition? The reason this is so important is to avoid bias. 

Let me explain - when you use language that is important to you, there is a greater risk of misunderstanding the actual needs of your customer. For example, if I was to ask a consumer why they might use a specific type of toothpaste, they might say things like, “I want to avoid too many trips to the dentist,” or, “It gives me confidence my breath smells ok.” However, if I were to ask someone who works for the toothpaste company, they might say things like, “They want to ensure they have the best oral hygiene,” or, “they want to avoid gum disease.” Both groups’ language in answering the questions demonstrates a certain bias, which might lead to a disconnect.

In summary, there are three ways you can challenge your solution by:

1. Fostering customer-centric thinking.

2. Prioritizing the most important pains/gains.

3. Articulating your value proposition in a language your customer would recognize. 

So, let’s explore how to go about it so you can be sure it is right.

Challenge Your Solution

Customer-Centric Thinking

You need to validate your hypotheses about your customers, and the best way to do that is to “ask” them. You might be wondering why I put the word ask in quotation marks. Well, it’s because you may not have to ask them directly. Let’s explore the options here:

Quantitative Validation

You can capture this by:

• Observing their behavior around your category. 

• Creating a survey that you send to a large group of people who correspond to the audience profile of your target customer.  

You can then analyze the outcome. The resulting insight will be invaluable in validating your ideas. A great example of this would be Amazon, which continuously reviews data on its customers’ behavior to see what they search for or how they research specific topics. From their reviews of the data, they can extract insight that feeds into how they design new products for their customers. In market research circles, this is often referred to by the shortened term “Quant.”

Qualitative Validation

You could carry this out as:

• A series of focus groups.

• Market research interviews. 

• Networking with, or getting to know your target audience well enough so that you start to understand them. 

When Airbnb was a developing business, the company’s founders went on a road trip, visiting every single one of their customers (the ones listing properties). They got to know them in person, asked them how they used the platform, what they valued about it, what it was missing, and so on. That personal touch was delightful for the customers they visited, but it also enabled Airbnb to enhance and adapt its proposition to be more aligned with the needs of those customers! In market research circles, qualitative methods are often called “Qual.”

Test & Learn Validation

Let’s say you want to sell a product in bulk to a particular audience - you could produce a small volume of that product and see if people buy it in numbers before deciding to invest heavily in more stock.

Here’s a great example: The famous story behind Innocent Drinks. The three founders, Richard Reed, Adam Balon, and Jon Wright, spent six months in 1998 working on smoothie recipes while working day jobs in advertising and consulting.

One day they brought their new smoothies to Parsons Green in London for a jazz festival, with a sign over their booth that read, “Should we give up our jobs to make these smoothies?” There were two trash bins for the empty cups, one marked “yes” and one marked “no.” By the end of the festival, the “yes” bin was full, and the “no” bin had only three cups in it. So the three founders resigned from their day jobs to start working on Innocent full-time.

Innocent later became a massive hit, but success was far from secure. It took a long time to get funding and longer to prove the business’s viability. But the initial test provided the necessary validation to get moving.

Prioritizing the Most Important Pains and Gains

In our example business case, you saw six potential gains and four pains for the target customer. How do you decide if they are all needed or have the same value to the customer?

Remember when we discussed mobile phones and their value for the customer? Which is most valued? The camera, the phone network connection, the app store, the flashlight?

Maybe one of those features is sufficient to make the mobile phone valuable enough for someone to buy it. On the other hand, perhaps it’s three of them together (or none of them/a different one). Then again, maybe all of them need to be present for the value exchange to be sufficient for the audience to pay for the phone with their hard-earned money.

Articulating Our Value Proposition in a Language Our Customer Would Recognize

I think you know what I’m about to say….

Let’s look at an example we used earlier in this context.

When a person uses toothpaste, they have reasons they have chosen that product specifically for their dental care needs. For example, they may look for a fresh taste, effectiveness, fresh breath, price, packaging, user experience, etc. If you ask them to describe those reasons, they might say things like, “Well, I like to have good breath, so I’m not embarrassed,” or, “I’ve had problems with my gums before, so I want a product that will protect them.”

Suppose you asked the same question of the toothpaste company employees. In that case, you might get answers like, “Well, people care about their oral hygiene, and want to avoid gingivitis,” or, “the applicator of the toothpaste should be tactile.”

The consumer does not think like this at all. So, the value proposition needs to use language that would resonate with them.

Fill In the Value Proposition Block

The final task in this stage is to turn these ideas into a simple articulation of your value proposition. It needs to encapsulate the core value you are offering your potential customers.

Here’s an example to help you:

Digit – Save money without thinking about it

Digit helps users “save money without thinking about it” by allowing them to connect their bank accounts to the service and then automating the process of saving small amounts by rounding up the pennies from transactions and adding them to a savings account. This helps the customer save money over time without really noticing.

Your Turn!

Now over to you! Create a short, snappy description of the value proposition for The Founders Reading Guild. Now, of course, this needs to be represented on the BMC, so don’t forget to add it there too.

✅ Here’s what we came up with.

Next, it will be time to get comfortable with how to make money, market to customers, and what partners you need - just some of the aspects that represent the feasibility and profitability of your business model. And our BMC will be guiding us along the way!

Let’s Recap!

• You may have many pains and gains for your target customer, which you can rank to highlight the most important, impactful ones.

• Your value proposition needs to be free from jargon and bias. 

Great work on challenging your business value! In the next part of the course, we will look at how feasible and profitable the business idea is. But before we meet again there, I invite you to test your knowledge with a quiz. Good luck!