We use the value proposition canvas to help innovation teams design products and services customers actually want. Although one question we get all the time (especially from new users of the value proposition canvas) is: Do you always start with the customer?
The last couple of decades have seen an overwhelming focus on customers. I have yet to advise a company whose vision or strategy doesn’t include an acute customer focus. And this plethora of customer-driven organisations rely more and more on methodologies such as Design Thinking which starts with an empathetic and exploratory approach toward the customer. But a good idea doesn’t have to become a dogma.
In this post we explain why you don’t always have to start with the customer, but you always have to end with the customer — especially the validation of fit between the customer (as mapped in your customer profile) and your product/service (as designed in your value map).
The innovation journey of many teams starts with a customer discovery process and a large number of customer interviews. In many corporate innovation programmes, it has become a design principle that teams cannot advance to the next stage of the programme and access more funding before having completed a large number of customer interviews, sometimes as high as 100 interviews in a 6-12 week window.
Why this focus on customer interviews?
There are many benefits to doing many customer interviews early in the innovation process:
Consistent customer feedback helps innovators to not fall in love with their initial ideas, and thus avoid one of the most dangerous pitfalls facing entrepreneurs.
Customer interviews are the simplest form of testing innovators can do. When done properly, these interviews can provide early evidence on the most critical assumptions.
After a while, these interviews will lead to a deeper customer understanding and to critical insights for designing a product or service that customers want.
The insights that innovators need to get from this discovery process are:
What are the most critical jobs, pains and gains of customers.
And are any of these important enough that customers would be willing to pay for your product or service?
When teams start their innovation process with just a business idea, the customer is a pretty good starting point. In this case, we coach teams to work on the circle — the customer profile — and map the critical jobs, pains and gains.
Many of the teams we coach in large organisations have much more than just good ideas. These organisations might have key resources such as patents, capabilities or access to technologies that innovation teams can use to prototype new value propositions and business models.
A classic example of reusing an existing capability to build a new business model is Amazon with Amazon Web Services (AWS). Amazon leveraged its IT expertise and infrastructure, which was initially built for its e-commerce business, to create AWS - a suite of cloud computing services sold to enterprise customers.
The innovation journey is long and hard enough: it would be careless not to use all the assets and opportunities available to you. When we work with teams in large organisations we often help them prototype many different product and services using available assets early in their innovation process. In this case, we start our innovation process with the square - the value map - and we ask them “what new value proposition could you design based on this key resource?” This piece of technology? Or this capability? Or this patent? And they describe how those available assets could contribute to a potential value proposition using the value map.
In both instances, whether you start with the customer to identify critical customer insights or start prototyping a new value proposition built on an existing key resource, you will soon need to go through a solid testing process to validate the fit between your value proposition and the customer segment.
That’s why we always remind innovation teams that we work with that you don’t always have to start with the customer, but if you want to achieve fit, you have to end with the customer.
Why not come and join us at one of our global masterclasses to learn about more value proposition design best practices for you to apply to your own business?
* Please note that this post is only a small insight into the great work done by Greg Bernarda on Value Proposition Design best practices.