Understanding the Value Proposition Canvas
Based on the case by KSE Consulting Initiative
Client Overview: Furniture Factory Stojka
Company Information:
Facebook: https://www.facebook.com/stojka.ua
Instagram: https://www.instagram.com/stojka.ua/
Company Name: Furniture Factory Stojka
Years in the Market: Over 11 years
Number of Employees: Up to 10 individuals
In the wake of the devastating impact of the war in Ukraine, businesses like Furniture Factory Stojka are navigating the challenging aftermath. As a small furniture factory, they, like many others, found themselves uprooted, their operations disrupted, and their plans placed on hold. The echoes of destruction and displacement reverberated across the industry, causing orders to dwindle and uncertainty to prevail.
Maksim Mizhenskiy, the client, provided a snapshot of the factory's journey – from selling office furniture to dabbling in home furniture before eventually specializing in store furniture for retail chains. The factory's resilience shone through as they pondered venturing into a unique niche: crafting furniture for pets. Initial market analysis hinted at promising demand in this untapped market.
With a focus on refining the brand and product offerings, Maksym Antonenko, the KSE consultant, honed in on a key challenge: sustainable growth. Maksym's question about the success of the consultation pointed to a clear goal – finding new orders source and expanding their customer base, particularly in the international arena for pet furniture.
Maksym's guidance emphasized the need for preliminary research, assessing risks, and aligning consultations for practical improvements. The conversation also addressed the challenge of optimizing sales for POS furniture, a segment affected by disrupted demand due to the war.
Unpacking the Initial Consultation: Navigating Forward
With a team of ten individuals, including Maksim Mizhenskiy the owner, and salesperson, Furniture Factory Stojka embarked on a journey of revival. After a complete stall in operations, they began witnessing the gradual return of clients. The factory's reliance on a core group of loyal clients became evident, especially as they continued to supply furniture to burgeoning retail chains. Meanwhile, the factory was gearing up for a nationwide advertising campaign, poised to tap into markets across Ukraine.
Understanding customer needs became a priority, driven by insights gleaned from trend analysis and past requests. A noteworthy revelation emerged – a significant 85% of sales were attributed to non-standard equipment. This spotlighted the factory's flair for tailored solutions, while simultaneously highlighting the challenge of optimizing these diverse requests.
Maksym Antonenko, the KSE expert, recognizing the need for strategic refinement, encouraged the factory to adjust their sales and marketing messaging. A call for clarity and value-driven communication was essential. Fortunately, Furniture Factory Stojka had already taken steps in the right direction. They had segmented their target audience and developed an appealing website and a few compelling presentations. The next phase involved honing the messaging and aligning it with the needs of their target audience.
Notably, Maksim Mizhenskiy proudly shared the impact of his newly created LinkedIn profile. This foray into targeted messaging had already yielded promising results, underscoring the power of targeted communication in driving positive outcomes. This channel opened line of direct approach to the decision-makers in the Stojka’s target community of marketers.
In line with this direction, Maksym Antonenko recommended leveraging the Value Proposition Canvas as a valuable tool to refine the messaging strategy. This canvas would help Furniture Factory Stojka gain a comprehensive understanding of their customers' needs, tailor their value offerings, and ensure their communication resonated effectively.
Value Proposition Canvas
The Value Proposition Canvas stands as a strategic framework that places customer needs and desires at the heart of product or service message development. Conceived by Dr. Alexander Osterwalder, this tool ensures an alignment between what you offer and what the customer expects.
Settled within Osterwalder's broader Business Model Canvas, the Value Proposition Canvas is a direct link between your offers and your target customers’ gains.
Deciphering the Value Proposition Canvas
The Canvas consists of 2 sides: the Customer Profile and a company's Value Proposition.
Customer Profile
Gains: Unveils the benefits customers seek, delighting them and fostering adoption.
Pains: Uncovers the negative experiences and risks customers encounter in their endeavors.
Customer Jobs: Unravels functional, social, and emotional tasks, as well as problems customers aim to solve and needs they wish to fulfill. Each customer segment demands a tailored profile, recognizing unique 'jobs to be done', pains, and gains.
Value Map
Gain Creators: Details how the product or service enhances customer gains and brings added value. “Nice to have”
Pain Relievers: Describes precisely how the offering mitigates customer pains.”Must have”
Products and Services: The offerings generating the above described gains and alleviating pains, basically the purpose of customer value creation.
Crafting Harmony Between Canvas and Customer Profile
After outlining gain creators, pain relievers, and offerings, each element is ranked from 'nice to have' to 'essential' in terms of customer value. A harmonious fit emerges when the value proposition's products and services effectively address the most pivotal pains and gains from the customer profile.
Let's explore how Stojka Furniture Factory can apply this framework
1. Customer Segments: Addressing Unique Needs
Furniture Factory Stojka identifies several key customer segments, each with specific pains, gains, and jobs:
Marketers: Pain - Struggling to differentiate products; Gain - Effective strategies for brand differentiation; Jobs - Stand out in a competitive market.
Trade Marketers: Pain - Challenges in launching new products, ease of assembly of the display, compact size, light and durable; Gain - Effective techniques for successful launches, being remembered; Jobs - Ensure a flawless product introduction.
Small Brand Owners: Pain - Limited resources for brand growth; Gain - Empowering brand identity and growth strategies; Jobs - Establish a strong brand presence.
Marketing Agency Representatives: Pain - Ensuring client strategies align with trends; Gain - Expert insights for impressive strategies; Jobs - Provide clients with cutting-edge solutions.
Designers: Pain - Infusing designs with brand essence; Gain - Amplified creative impact; Jobs - Craft designs that resonate deeply with the target audience.
Distributors: Pain - Need for effective distribution strategies; Gain - Enhanced market presence and promotion; Jobs - Optimize distribution channels.
3. Addressing Pains and Providing Gains
To address these pains and provide gains, Furniture Factory Stojka currently lists the following gains and pain relievers:
Affordable Pricing: Addresses budget constraints and financial worries.
Certified Materials: Alleviates concerns about product quality and durability.
Wide Selection: Provides variety, reducing the risk of not finding the right fit.
Distinctive Design: Offers unique designs to meet personal preferences.
Efficient Ordering: Saves time and reduces frustration in the ordering process.
Quick Turnaround: Addresses the impatience associated with waiting for products.
While valid, these pains and gains come across as rather generic and the marketing content designed around them becomes generic as well, thus being lost before reaching the target audience.
4. Redefining the Message for Customer Segments
Now, let's put the Customer Value Proposition mapping into action and directly address the pains experienced by each customer segment. Additionally, let's provide those "nice-to-have gains" by assisting them in accomplishing their essential tasks. We will offer recommendations on the new messages (for this case study purpose only):
For Marketers: Find your edge in the competitive market by effortlessly aligning your brand with your target consumers' preferences. Craft an identity that stands out as valuable and distinct.
For Trade Marketers: Launch your products effortlessly, with attention-grabbing displays that are compact, lightweight, and durable. Leave a lasting impression that keeps your brand memorable.
For Small Business Owners: Elevate your brand with uniquely designed, reusable product displays that are both cost-effective and durable.
For Marketing Agency Representatives: Keep your projects on track with seamless, on-time, and budget-friendly furniture delivery. One less milestone to worry about, ensuring your strategies align perfectly with market trends.
For Designers: Infuse your designs with the very essence of the brand, creating displays that are not just functional, but also tell compelling stories. Let your designs speak volumes about the brand's identity and values.
For Distributors: Boost product promotion with displays that add undeniable value. Capture the attention of potential buyers by showcasing products in a way that demands notice, increasing the likelihood of sales.
This way Stojka can pro-actively show they understand their main TA needs, and guide them to making purchasing decision.
5. Refining Messages with the CVP Framework
With the strategic application of the Customer Value Proposition (CVP) framework, "Furniture Factory Stojka would now be able to dig deeper into the intricacies of its diverse customer segments, ensuring that their messaging is not only tailored but resonates profoundly. In the past, generic statements such as "unique designs" and "quality and durability" might have sounded like empty slogans. However, armed with insights from the CVP framework, these phrases can be rephrased and carefully positioned to penetrate the core pain points of their respective segments.
The true essence lies in understanding that each customer segment seeks specific gains and solutions for their distinct challenges. This transformation means that "unique designs" evolves into "Showcase your brand essence through designs that uniquely resonate with your target audience." Likewise, "quality and durability" seamlessly transitions into "Relieve concerns about product longevity and build trust through certified materials that stand the test of time." By reframing these offerings, Stojka can ensure that their value proposition effectively communicates solutions rather than remaining superficial claims.
This profound shift not only enables the factory to establish a connection on a deeper level but also positions them as a solution provider that truly comprehends the pain points and aspirations of their customers. The CVP framework, in its essence, guides Furniture Factory Stojka to articulate its unique strengths in ways that matter most to each segment, ultimately resulting in a more impactful and resonant brand message.
5. Validation and Refinement
Curiously, Mezhinskiy mentioned, that while he is happy with optimization they achieved for their website, the navigation is not as intuitive as they hoped. The website only started as a portfolio, naturally evolving into a sales channel now. Using newly found pain relievers and “nice to have” gains, Stojka’s website can refine the navigation, and start speaking directly to the segments offering them exactly what they are looking for.
Marketers: Align your brand effortlessly for a competitive edge and distinct identity. Click here (link to the brands’ designs collections)
Trade Marketers: Launch products with lasting impact and memorable displays. Click here (link to the trade shows collections)
Small Business Owners: Elevate brand presence with cost-effective, unique displays. Click here (link to the best cost-saving options)
Marketing Agency Reps: Ensure on-time, budget-friendly furniture delivery for seamless strategies. Click here (link to timelines page)
Designers: Infuse designs with brand essence, crafting impactful narratives. Click here (link to connect to the in-house designers to discuss projects)
Distributors: Boost sales potential with attention-demanding displays. Click here (link to collection for distributors, with corresponding quantities and pricing)
This way CVP next natural step is applying the newly found solutions and start communicating to the segments in the terms they are most interested in.
6. Applying the Value Proposition: Practical Insights for Different Roles
This CVP example was easy, thanks to the Stojka’s well-defined target audience and segments. No need to be afraid to “lose customers” while working on the segmenting your potential buyers. The clearer the segmentation, the more inviting the message speaking to the pains and gains of this segment will sound. The better the sales will go.
The Milkshake Morning Scenario – A Customer Value Proposition Tale
In a pivotal illustration of the Customer Value Proposition (CVP), a major fast food chain harnessed the Jobs to be Done (JTBD) theory to reshape its milkshake sales strategy. While conventional data explored flavor and thickness preferences, these tweaks yielded minimal sales impact. The breakthrough emerged when the company reframed its approach.
Instead of merely focusing on taste preferences, Clayton Christensen and his team identified the fundamental "jobs" that milkshakes were hired to perform. The primary customers were morning commuters seeking an engaging and satisfying way to make their drives enjoyable. These milkshakes weren't just competing with other milkshakes; they were rivaling options like bananas, Snickers bars, and doughnuts – anything that could enhance the commute experience. By understanding and enhancing the milkshake's role in fulfilling this specific job, the company achieved remarkable growth.
This case underscores the potency of the CVP in uncovering customers' underlying needs and redefining the competitive landscape. Beyond products, customers are actively seeking solutions to fulfill their jobs, often influenced by distinct circumstances and criteria. By catering to these job-based needs, businesses can spark transformative change and surpass competitors.
