unique value proposition business model canvas

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Putting the customer first using the Value Proposition Canvas

It’s all around us, most companies have a singular focus on ‘innovation’ which has resulted in a flood of products and services competing for attention. Each claims superiority over its rivals, each iteration touting improvement upon the last. But most times there is a huge disparity between what customers truly desire and what companies offer. Understanding and meeting these multifaceted customer needs is no small feat.

The Value Proposition Canvas is a strategic tool that enables businesses to zero in on their customers' needs and design products or services that cater precisely to those requirements. Originating from the Business Model Canvas, it provides a detailed look into the customer’s world, ensuring that companies can align their offerings with customer expectations for a competitive edge in today’s market.

What is the Value Proposition Canvas?

At its core, the Value Proposition Canvas is a framework that helps businesses understand their customers better and create value propositions that solve real problems. It’s a visual chart that guides teams through the process of identifying customer pains, gains, and jobs-to-be-done, which are crucial for developing products that customers truly want.

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The Two Sides of the Canvas

The canvas is divided into two main sections: the Customer Profile and the Value Map . The Customer Profile helps you delve into the customer’s mindset, identifying the tasks they are trying to accomplish ( Jobs-to-be-Done ), their frustrations (Pains), and what they hope to achieve (Gains). On the flip side, the Value Map allows you to outline how your product or service eases those pains and creates gains, thereby crafting a compelling value proposition.

By fostering empathy with customer needs and wants, the Value Proposition Canvas becomes an indispensable part of strategic business planning. It’s not just about what you sell; it’s about understanding the ‘why’ behind customer behaviors and tailoring your offerings to meet those needs.

For teams looking to apply this model, tools like Creately offer an advanced diagramming and whiteboarding platform that can enhance the collaborative process of filling out the Value Proposition Canvas. With Creately’s visual tools, teams can effortlessly create a shared understanding of the customer and visualize the value created, ensuring that everyone is aligned towards achieving product-market fit.

The Advantages of Implementing the Value Proposition Canvas

Embracing the value proposition canvas is a strategic move that can significantly enhance your business’s understanding of its customers. This powerful tool clarifies customer segments and delves deep into their specific needs, ensuring that your product or service is designed with precision to create maximum value. Here are some key advantages of implementing the value proposition canvas:

Clarifies Customer Segments: By defining customer profiles, the value proposition canvas helps in tailoring your offerings to meet the exact needs of different market segments, leading to more effective targeting and customer satisfaction.

Visualization of Value Creation: It enables a clear depiction of how your product or service benefits customers, aligning features with customer desires and expectations, which is crucial for strategic business planning .

Product-Market Fit: The canvas is instrumental in achieving a strong product-market fit, a cornerstone for any successful business. It ensures that your offerings not only meet market demands but also outshine competitors.

Strategic Business Planning: With its structured approach, the value proposition canvas supports focused planning, helping businesses to prioritize resources and efforts effectively.

Customer Involvement: It encourages active customer involvement in product development, fostering a collaborative environment where feedback is valued and acted upon, leading to products that truly resonate with the market.

By leveraging the value proposition canvas , businesses can ensure that their strategies are not just aligned with, but also driven by, customer needs and wants. This customer-centric approach is at the heart of product-market fit and is essential for businesses looking to establish a competitive edge in today’s dynamic market landscape.

Understanding the Structure of the Value Proposition Canvas

The Value Proposition Canvas is a strategic tool that enables businesses to ensure that the products or services they offer meet the needs and wants of their customers. It is divided into two main sections: the Customer Profile and the Value Map. Each section plays a crucial role in helping businesses align their offerings with customer expectations and market demand.

Customer Profile: Jobs, Pains, and Gains

The Customer Profile section is designed to give businesses a deep understanding of their customers. It focuses on three key areas:

• Jobs: This refers to the tasks customers are trying to accomplish, the problems they are trying to solve, and the needs they wish to satisfy. Understanding the customer journey and the customer segments is essential for identifying these jobs.
• Pains: These are the negative experiences, emotions, and risks that customers face when trying to accomplish their jobs. Identifying these pains helps businesses create solutions that alleviate customer frustrations.
• Gains: These are the outcomes and benefits that customers want. Recognizing these gains allows businesses to enhance their product features to better meet customer desires.

Value Map: Products and Services

The Value Map section outlines how a business’s products and services relieve pain and create gain for customers. It includes:

• Pain Relievers: These are the features or services that alleviate specific customer pains. They are critical in making a product or service compelling to the customer.
• Gain Creators: These are the features or services that generate expected or desired outcomes, enhancing customer satisfaction and providing added value.

Aligning the Customer Profile with the Value Map is where the magic happens. By matching pain relievers to customer pains and gain creators to customer gains, businesses can ensure that their offerings are not just functional but also highly desirable.

For example, Creately’s Value Chain Model templates can help businesses visualize and analyze their value creation process, ensuring that every step is aligned with customer needs.

Successful application of the Value Proposition Canvas involves a careful examination of these sections and a strategic approach to product development. By leveraging tools like Creately’s Value Stream Mapping Software , businesses can gain a comprehensive view of how their products flow from concept to customer, ensuring that every feature is designed with the customer in mind.

How to Use the Value Proposition Canvas

Mastering the Value Proposition Canvas is a strategic endeavor that can significantly enhance your business’s customer-centric approach. This powerful tool is not just about filling in the blanks; it’s about deeply understanding your customers and aligning your offerings to their needs. Let’s dive into a step-by-step guide on how to effectively utilize the canvas.

Filling Out the Canvas: A Step-by-Step Approach

• Start with the Customer Profile: Identify your customer segments and list out their jobs-to-be-done, pains, and gains. This will form the basis of your empathy towards customer needs.
• Map Out the Value Map: Outline how your products or services alleviate customer pains and enhance their gains. This is where you connect your solutions to customer problems.
• Align and Adjust: Look for the fit between the Customer Profile and the Value Map. Ensure that your value proposition is not just a list of features but a set of benefits that resonate with your customers.
• Gather Customer Feedback: Use tools like surveys, interviews, and Business Model Canvas Explained to validate your assumptions and refine your canvas.
• Iterate Relentlessly: The Value Proposition Canvas is not a one-time activity. Continuously update it as you learn more about your customers and as market conditions evolve.

Iterating and Refining Your Value Proposition

Refinement is key when it comes to the Value Proposition Canvas . It’s an iterative process that involves back-and-forth between what you offer and what your customers need. Utilize customer feedback to tweak and enhance your value proposition. Remember, the goal is to achieve a product-market fit that not only meets customer expectations but exceeds them.

Avoid common pitfalls such as becoming too attached to your initial ideas or ignoring market signals. Instead, stay agile and responsive, always ready to refine your value proposition to better serve your customers.

By integrating the Value Proposition Canvas into your strategic planning, you can ensure that every aspect of your product development is customer-focused. This not only leads to a stronger market position but also fosters a loyal customer base that sees the value in what you offer.

When to Utilize the Value Proposition Canvas

Understanding when to deploy the value proposition canvas is crucial for maximizing its impact on your business strategy. This versatile tool is not just for the initial stages of product development; it’s a dynamic instrument that can be woven into various phases of your business lifecycle.

• Product Development: At the inception of a product idea, the value proposition canvas helps you align your vision with customer needs, ensuring a strong foundation for your new product.
• Pivot or Rebranding: When considering a pivot or rebranding, the canvas serves as a guide to re-evaluate and adjust your value proposition to better meet market demands.
• Continuous Improvement: It’s a tool for ongoing refinement, helping you stay responsive to customer feedback and evolving market conditions.
• Market Changes: In the face of market shifts, the value proposition canvas allows you to reassess and stay ahead of the competition, ensuring your offerings remain relevant.
• Strategy Sessions: Incorporating the canvas into regular business reviews and strategy sessions fosters a culture of continuous alignment with customer values and market trends.

By integrating the value proposition canvas into these critical stages, you not only create a customer-centric approach but also leverage a strategic asset for business growth. Creately’s Business Model Canvas Template can be instrumental in this process, providing a visual collaboration platform that enhances team efficiency and streamlines work processes.

Expert Tips for Maximizing the Value Proposition Canvas

Mastering the value proposition canvas is not just about understanding its structure; it’s about leveraging it to its full potential. Here are expert tips to ensure you’re maximizing the benefits of this powerful tool:

• Collaborative Team Use: Encourage team members to contribute their unique insights by using a visual collaboration tool for teams like Creately. This fosters a diverse perspective on customer needs and value creation.
• Effective Communication: Clearly articulate your value proposition both internally and externally. Use visuals to communicate complex ideas simply and effectively, ensuring alignment across all departments.
• Targeted Strategies: Utilize the canvas to inform your marketing and sales strategies, ensuring that they are closely aligned with the customer’s jobs-to-be-done, pains, and gains.
• Regular Updates: The market is ever-changing, and so are customer needs. Revisit and update your value proposition canvas regularly to stay relevant and responsive.
• Customer Feedback Loops: Integrate customer feedback loops into your canvas. This continuous improvement process ensures that your value proposition remains customer-centric.

Identifying Customer Advantage with the Value Proposition Canvas

Understanding your customers' needs and desires is the cornerstone of a successful business strategy. The Value Proposition Canvas is a powerful tool that helps businesses to create a structured approach to analyzing customer pains and gains for a competitive advantage. By mapping customer insights to your value proposition, you can ensure that your offerings resonate deeply with your target audience.

Leveraging Creately to Craft Your Value Proposition Canvas

When it comes to mastering the art of customer-centricity, the value proposition canvas is an indispensable tool. But to truly harness its power, you need a platform that facilitates seamless collaboration and deep customer understanding.

• Visual Canvas Mapping Tools: Creately’s intuitive interface allows you to map out strong value propositions with your team, ensuring that every voice is heard and every customer insight is captured. With features like an infinite canvas and AI-powered visual intelligence, you can visualize the value created for customers in a way that’s both comprehensive and easy to understand.
• In-Depth Research and Customer-First Experiences: Conducting thorough research is crucial for understanding your customers. Creately’s platform supports this with multiple visual frameworks and templates, such as the USP Analysis Template , which help you gain an in-depth understanding of your customer segments.
• Collaborative Shared Visual Canvas: The shared visual canvas feature of Creately allows for real-time collaboration, making it easier to align your team’s efforts and iterate on your value proposition canvas. This fosters a strong customer involvement, which is key to creating products that truly resonate with your audience.

By leveraging Creately’s advanced diagramming and whiteboarding, you can create a value proposition canvas that not only identifies customer jobs to be done but also aligns them with your product’s features and benefits. This ensures a focused planning approach and a competitive edge in achieving product-market fit. With Creately, you’re not just crafting a value proposition canvas; you’re building a bridge between your product and the customers it serves.

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Chiraag George is a communication specialist here at Creately. He is a marketing junkie that is fascinated by how brands occupy consumer mind space. A lover of all things tech, he writes a lot about the intersection of technology, branding and culture at large.

The Value Proposition Canvas

Value Proposition Canvas is a tool for marketing experts, product owners, and value creators. This method from the bestselling innovation book Value Proposition Design is applied in leading organizations and start-ups worldwide.

Why use the Value Proposition Canvas?

Precisely define your customer profiles.

Identify your customer's major Jobs-to-be-done, the pains they face when trying to accomplish their Jobs-to-be-done and the gains they perceive by getting their jobs done.

Visualize the value you create

Define the most important components of your offering, how you relieve pain and create gains for your customers.

Achieve product-market fit

Adjust your Value Proposition based on the insights you gained from customer evidence and achieve Product-Market fit.

The Value Proposition Canvas explained

A 2 minute overview of the Value Proposition Canvas, a tool for marketing experts, product owners, and value creators. This method from the bestselling innovation book Value Proposition Design is applied in leading organizations and start-ups worldwide.

About the speakers

Download your free copy of this whitepaper now, explore other examples, get strategyzer updates straight in your inbox.

Mastering Value Propositions

An online course that includes 8+ hours of high-quality videos and exercises to learn how to design value propositions that your customers want.

Business Model Canvas Explained: Definition, Pros, Cons, and Building Blocks

So, here's the thing. We all know that we need structure to work effectively, but where do we start with so many options available? One tool worth considering is the Business Model Canvas (BMC) . Used effectively, it can give solid structure to your planning. 

In this article we will examine how the model works and a few ways to use it effectively. Then, we will describe its best practices and some recommendations on getting started. Finally, we will explore possible alternatives. 

Ready to get to know all about the BMC? Let's begin.

The Business Model Canvas, explained

The Business Model Canvas is a strategic management tool that helps businesses visualize and analyze their business models. It consists of 9 fundamental building blocks that describe the core aspects of a company's value proposition, infrastructure, customers, and finances (more on that later, we promise). 

By using it, organizations can gain a deeper understanding of their overall business model , identify areas for improvement, and develop new strategies for growth. One of the key benefits of the BMC format is that it's very visual. Used adequately, it allows organizations to create a display of their business model in alignment with strategic business objectives and the overall value proposition.

The nine BMC building blocks were initially presented in 2005 by Alexander Osterwalder. They were based on his Ph.D. work on business model ontology, supervised by Yves Pigneur. Since its release, the authors have developed other related tools, such as the Culture Map and the Value Proposition Canvas, which have helped the BMC tool to evolve and added value to it.

Business Model Canvas examples

Some examples of the BMC include:

• Strategy planning
• Business planning
• Business modeling

Lean Canvas vs. Business Model Canvas

Both the Lean and Business Model Canvas enable you to capture your entire model on a single page. The primary difference between them is that the Lean Canvas focuses mainly on solving a particular problem. The Business Canvas Model, on the other hand, is more sales orientated and usually focuses on selling products or services. 

Advantages and disadvantages of the Business Model Canvas

Even though the BMC offers a series of features in order to effectively visualize and analyze your organization's business model, there are also some possible drawbacks to be aware of – and avoid. 

To start on the right note, the benefits of the Business Model Canvas include:

• A clear and comprehensive business model overview in a single visual format. This makes it easier to understand, articulate, and communicate.
• Strong collaboration and breaking down silos. Using the BMC approach incentives people to work as one team, as it involves all stakeholders, and enables them to actively participate in developing, improving, and refining the business model.
• Colleagues constantly progressing with feedback (to borrow from an ITIL principle). The BMC approach allows for a fast and efficient testing of different business model configurations, speeding up the innovation process and reducing the time to market.
• A structured and systematic approach to analyzing and designing business models, which helps identify areas for improvement and innovation.
• A flexible approach that enables innovation instead of limiting it. The framework can be adapted to different types of businesses, industries, and customer groups.

However, if you choose to work with this management tool, you need to consider its potential disadvantages :

• Using the BMC approach effectively can be challenging without prior knowledge of business modeling concepts and terminology. You will need to put the work in and do some pre-reading to get the most out of it.
• Because it's so visual, it may oversimplify the complexity of a business model, making it more challenging to articulate some of the aspects of the organization's operations and performance. This makes it unsuitable for highly-specialized or complex businesses.
• Because it's a framework rather than a prescriptive standard that must be strictly adhered to, it doesn't provide detailed guidance on implementing or executing the business model, which can lead to difficulties in translating the canvas into action.
• It can rely on assumptions and hypotheses, which may not always be accurate or relevant for real-world situations.

The 9 building blocks of a Business Canvas Model

The Business Model Canvas is organized in nine  building blocks that represent a business model's key elements. These building blocks are:

• Value Proposition - The unique value the business provides to its customers and how it differentiates itself from competitors. In other words, it’s what sets your business apart, what makes it special, and what value it brings.
• Customer Segments - The different groups of customers the business targets with its products or services. This building block looks at your most important customers.
• Customer Relationships - The business' relationships with its customers and how it interacts with them. This is a fundamental building block as not only does it help you build and maintain a relationship, it also enables you to map out the cost and deliverables needed to continue to improve that relationship.
• Channels - T he different channels that the business uses to reach and interact with customers, including physical and digital channels.
• Key Partnerships - The relationships and collaborations that the business has with its suppliers, vendors, and other external partners.
• Key Activities - The key activities that the business must perform to deliver its value proposition and operate successfully. This building block helps you to define your most mission-critical actions and prioritize them accordingly.
• Key Resources - The key resources the business requires to operate, including human resources, physical assets, and intellectual property. This can also include relationships, distribution channels, and virtual assets.
• Revenue Streams - The different sources of revenue that the business generates from its customers, including one-time sales, recurring revenue, and other revenue streams. This building block also helps determine how each stream contributes to the business profit.
• Cost Structure - The various costs that the business incurs to operate, including fixed costs, variable costs, and other expenses. It also helps you identify your most expensive assets and activities to make effective financial plans for the future.

How to build a Business Model Canvas in 14 steps

The Business Model Canvas is flexible – no one size fits all. But for our money, there are 14 steps to effectively build it.

Step 1: Define the purpose 

The first step is to define the purpose of the Business Model Canvas. Where are you now, and where do you want to be? What do you hope to achieve? Who is the target audience? Have you double-checked to ensure what you want to achieve is in line with the strategic objectives of the rest of the business?

Step 2: Identify the nine building blocks

Identify the nine building blocks of the BMC, review each in relation to your business, and understand their purpose.

Step 3: Define the Value Proposition

What will add value? Start by defining the unique value that your business offers to customers. This will be the foundation of your canvas.

Step 4: Identify your Customer Segments 

Define the different groups of customers your business targets and their specific needs and preferences so you can focus and direct your efforts accordingly.

Step 5: Define Customer Relationships 

Identify your business' relationships with its customers and how it interacts with them. You can also use this step to identify your most important relationships so you can focus more effort on maintaining and improving them.

Step 6: Determine the Channels

Identify your business's channels to reach and interact with its customers, including physical and digital channels. From a service desk perspective, this could be offering a tier 0 channel with self-service or AI-enabled support capabilities before providing tier 1 and level 2 channels which offer a more people-centric user experience .

Step 7: Define Key Partnerships

Identify your business's relationships and collaborations with its suppliers, vendors, and other external partners. Remember, it's not just relationships with customers and stakeholders that matter, your suppliers are part of your team, so manage those relationships appropriately.

Step 8: Identify Key Activities

Define the key activities that your business must perform to deliver its value proposition and operate successfully.

Step 9: Determine Key Resources

Identify the key resources that your business requires to operate, including people, knowledge and wisdom, financial assets, and IT assets.

Step 10: Determine Revenue Streams 

Identify the different sources of revenue that your business generates from its customers. If you have a finance team,  work with them to identify current revenue streams and plan for future ones.

Step 11: Determine Cost Structure

Work with your finance team to identify the various costs that your business incurs to operate, CAPEX, and OPEX costs. 

Step 12: Build the Canvas

Once you have defined all of the building blocks, you can start creating the canvas to visualize what you are planning to accomplish.

Step 13: Review and refine

The BMC isn't a one-and-done approach. Review your model and seek feedback from your stakeholders to correct the course when needed.

Step 14: Keep going! 

In the words of Walt Disney, "Keep moving forward." Build and refine your model over time to reflect current and future activities more accurately. 

How to complete a Business Model Canvas

No one likes a blank page, do they? The difficult part is always getting started, but I promise, if you follow these steps, you'll be off to a great start: 

• Start with the Value Proposition - Before you do anything else, fill in the Value Proposition block in the center of the canvas. This should describe the unique value that your business provides to customers and how it differentiates itself from competitors. Focus on getting this point right because value is everything in terms of the BMC.
• Add in your enablers - This will include your key activities, customer segments, relationships (both customer and supplier relationships) assets, key activities, and channels.
• Add in your financials - Put in your revenue dreams and your cost models to make your BCM more transparent and ensure there are no hidden costs.
• Progress iteratively with feedback - Once you have filled in all the building blocks, review your canvas, iterate, and redefine  as needed. Seek input from stakeholders and make adjustments.
• Give the gift of clarity - Remember, this is a visual model, so don't get too stuck on the details or use too much jargon. The effect you're looking for is clear, concise, and visual.
• Relationships matter - We are talking about the relationship between each building block, so ensure they are correctly represented in your diagram.

Six alternatives to the Business Model Canvas

While the Business Model Canvas is a popular tool for developing and communicating a business model, other options are available too. Some alternatives include:

• Lean Canvas - This tool is similar to the BMC but focuses on startups and small businesses. It includes fewer blocks and focuses on validating hypotheses and testing assumptions quickly.
• SWOT Analysis - This tool helps to identify a business's strengths, weaknesses, opportunities, and threats. This can be a valuable tool for assessing the current state of a company and identifying areas for improvement.
• Business Model Innovation - This involves developing a new business model that is different from the traditional one used in the industry. It can be done through creative thinking, exploring new technologies, or adopting a new approach to customer relationships.
• Blue Ocean Strategy - This framework helps businesses to create new markets and uncontested market space. It involves identifying and focusing on areas of innovation that competitors have not explored.
• Value Proposition Canvas - This tool helps businesses to define and communicate their value proposition to customers. It focuses on the customer's needs, desired outcomes, challenges, and how the company can better meet those needs than its competitors.

Key takeaways

The Business Model Canvas or BMC is a strategic management tool that helps businesses visualize, design, and analyze their business models. Some of its common applications include business planning, value propositions, and modeling.

If you want to give it a shot to plan your organization’s strategy, make sure that you have your BCM template ready with the nine key elements that need to be completed. And don’t forget to follow through our six tips on how to get started!

  Frequently Asked Questions

How do you make a good business model canvas .

To make a good Business Model Canvas, clearly define the unique value proposition of your business and ensure that the key building blocks of the canvas (such as channels, revenue streams, and cost structure) are aligned with the overall strategic objectives of the business. Review and improve the canvas as needed to continue improving and aligning with business needs.

What are the four types of business models? 

The four types of business models are product, service, platform, and sub-subscription-based.

What are the three sections of the Business Model Canvas? 

Value Propositions, enablers, and financial planning.

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The Business Model Canvas Guide: Examples, Structure, and Expert Tips

Recent decades saw viral changes in business approaches. The primary trend in those changes is leveraging mobility and clarity. With the tech boom, the business processes speeded up, so businesses needed to adapt and involve flexible approaches. Such methods allow you to quickly adapt to the changing business environment and make the necessary decisions.

Similar transformations came into business planning. Business model canvas replaced lengthy business plans that consume time and considerable resources to develop. Adjusting a business plan as your company evolves would be challenging with this expense. So, business model canvas came to resolve this problem.

Business model canvas is a template helping to develop a strategy for managing your business. It comprises nine blocks covering your audience, resources, partnerships, and other aspects required for your business evolution. This template lets you understand your business progress and make necessary corrections anytime.

This article discusses the concept of the business model canvas and how it helps companies develop. Read on to understand the main blocks and how they will help your business grow.

Business model canvas: definition & structure

A business model canvas is a template that helps business teams to visualize, analyze, and adapt essential aspects of their business. The concept was coined and spread by Alexander Osterwalder, a Swiss entrepreneur and business theorist, and his graduate supervisor Yves Pigneur, a Belgian computer scientist. The term appeared thanks to the contribution of 470 entrepreneurs from 45 countries and was described in Osterwalder’s book Business Model Generation .

The basic idea of the business model canvas is to present a company’s business approach concisely. Thanks to simplicity, it helps teams to grasp the key elements of their business. The business model canvas includes nine areas, such as customer segments, value propositions, customer relationships, and others described in the article.

Now, let’s dive into the details of this model’s building blocks to learn how to create a business model canvas.

Each block of the business canvas model comprises certain information. You can fill them in and show them to your team. You can discuss each fundamental segment together and add the necessary research and data. Let’s see what information you can include in each part of the business model canvas. Below is a video that presents the concept of a business model canvas.

Customer segments

These include users and paying clients that purchase your product. How can you describe your different customer segments? Creating buyer personas to represent your target audience can be helpful.

A buyer persona is a concise but detailed description of a person who buys your product or services. The description shows the customer’s age, goals, interests and represents a specific customer segment. Also, it outlines problems the customer wants to solve and expectations about your product. By describing your buyer persona, you will better understand the pain points you must solve for your customers.

To create a buyer persona, perform research, surveys, and interviews with your prospects or customers. Thus, you will gain data on your customer segments’ expectations and needs.

Value propositions

It is a reason why customers prefer your company instead of others. The value you deliver helps customers satisfy their needs. So, a value proposition is a group of benefits you offer to a particular customer segment. Such benefits can be innovative or add exceptional features to existing products. For example, different value propositions can be as follows:

• Innovative product or service;
• Improved performance;
• Unique design;
• Easier accessibility;
• Convenience in using.

For example, Yelp helps people and local businesses find each other. The company’s value is giving access to reliable information about local businesses. Also, Yelp users can save money when discovering new places. So, the platform provides information that helps connect local businesses and people.

In a business model canvas, channels are the means to deliver value to your customers. Channels include how a company delivers and distributes products and services. Also, this point includes how an enterprise interacts with customers. Channels should be cost-efficient for your business and common for your customers. So they can notice and buy your product.

Typical channels for a SaaS B2B company include a website or an app.

For example, HubSpot, a customer relationship management system, uses various channels, such as social media, e-mail marketing, and blog. The company also reached its target audience through webinars and tutorials. Thus, their prospects better understood how the HubSpot CRM works.

Customer relationship

This point in the business model canvas outlines how a company will attract, retain and nurture customers. While channels show how to deliver your services, the customer relationship segment emphasizes how you support customers. So, you can use the following approaches to find and build customer relationships:

• Select the channels and platforms that your customers use the most.
• Choose the strategies to attract new customers and retain existing ones. For example, exceptional services and dedicated customer support with direct contact will help you to maintain customer relationships. Also, you can use tiered pricing or discounts for loyal customers.
• Define the ways to grow your audience. You can use content marketing to create blog posts, social media posts, and e-mails highlighting your benefits.

For example, Twitter deals with hundreds of millions of users, so the company needs to respond to their needs. Twitter uses customer service, social media, and e-mail support. These means help the company to maintain the necessary support and growth of their customer base.

Remember to define key channels for customer relationships through the touchpoints of the customer journey. From attracting to onboarding and support of customers, you will use different channels.

Revenue streams

This section represents the paid flows from your customers who pay for the value you provide. It shows how your business can generate revenue. Knowing this information, a business owner can choose a revenue stream for their product or service and a pricing mechanism. For example, you can choose between the following revenue models for a marketplace:

• Commission monetization model;
• Subscription model;
• Freemium model;
• Featured listings;
• Signup fees;
• Advertising fees.

Each revenue stream depends on the specifics of your product or service. You can choose from the above revenue models if you have an online business. Meanwhile, if you have an offline business, you must think about which monetization model you choose regarding the smallest details.

Key resources

Every company has strategic assets that enable its operation. Key resources help you support your value proposition and maintain a connection with customer segments. Companies typically choose resources from the below categories:

• Physical assets, including production facilities, machines, vehicles, and IT systems.
• Intellectual resources, including patents, copyrights, brands, partnerships, and customer databases.
• Human resources, including skilled employees in industries relying on knowledge.
• Financial resources, including cash in bank accounts, credit lines, and stock option pool.

The image below gives a summary of the key resources by category.

For example, Walmart would use and maintain its physical or virtual infrastructure as its core resources.

Another example is an activity booking marketplace that Codica created. The main asset, in this case, is the platform that enables parents to book activities for their children. The platform allows you to search for activities, book them, schedule with a calendar, and form itineraries for camps with prices. The key resources used in this case are technologies and qualified developers.

Key activities

These are your company's most important endeavors to keep business going successfully. Key activities depend on the niche of your business. For example, the main activities for a boat-selling website that we created include maintaining the platform and managing the interaction between sellers and buyers. Let’s see in more detail what the main key activity groups are as exemplified by this platform.

Production. This is how you deliver your product to end customers. If you create an online product, production includes discovery, design, development, testing, and maintenance of your product. For example, the boat marketplace chose our website redesign services for their platform to receive more conversions. The new design brought the company lead generation growth by 480%.

Problem-solving. These activities involve finding new approaches and addressing customers’ problems. For example, adding new features to your product helps solve your users’ pain points. In the case of the marketplace for boats, it is the decision to create a progressive web application (PWA) for the platform. This helped the company to cover mobile users in addition to desktop users.

Platform/network. These activities dominate companies functioning as platforms. Such enterprises create, run, and promote their platforms as a key resource. A platform that sells products or services requires regular maintenance and updates. For example, the Trade a Boat platform we mentioned above improved its search engine rankings and integrated service for placing ads. Check the video below to see how this boat sales platform works.

Key partnerships

Partnerships are crucial because you can win more with a partner than alone. With key partners, you can delegate specific tasks, mitigate business risks, and optimize your resources. For example, there can be such types of partnerships:

• Buyer-seller partnerships to supply resources or share infrastructure. For example, Alibaba partners with logistics companies to reduce shipping costs.
• Business competitors’ partnerships to mitigate risks and uncertainty. For example, Toyota and Suzuki created an alliance to promote their technologies in electrified transport.
• Partnerships to get access to customers, licenses, or knowledge base. For example, Spotify and Uber partnered to give their customers a better experience while they ride. Thus, both companies reached wider audiences.

To understand if a partner is a key partner, ask yourself: would the business model work without them? If your business model needs this partner to connect business processes, then it is a key partner.

Cost structure

Your costs depend on the expensive key resources and key activities. Some businesses try to minimize costs. At the same time, companies like luxury hotels can be focused on delivering particular value rather than cutting costs. So, your cost structure should be grounded on choosing between spending and value delivery priorities.

Cost structure can be defined based on key resources, key activities, and key partnerships. For example, Tinder, a dating app, spends costs for platform maintenance, salaries, and marketing. Also, the company’s cost structure includes spending on innovations, security, customer support, and product development.

Pros of a business model canvas

Many teams are engaged with current activities to run the business. To develop a successful business, they need a business strategy that provides them with details of where to move. Business model canvas is the right tool to keep them focused on day-to-day tasks with a clear strategy in mind.

But the question is, do you need a business canvas model in the first place? How can you discover if this template suits your business goals? We suggest its pros below.

Presents a concise and easy-to-follow business plan

Whether you are brainstorming business ideas or have a well-grounded venture, the concise strategy will help you plan the future. The business model canvas shows several blocks a team can fill and review at any time. Adjusting it is much easier than modifying a traditional business plan on 100 pages.

Helps to be focused on the action

A business model design focuses on operations and needs to outline actions for the team. For example, you plan to expand your audience or reach a certain profit during the year. Business model canvas is helpful to show you those goals and adjust internal processes if needed.

Enables scalability as the business evolves

Businesses do not remain the same but transform in the market climate. Companies must stay afloat among competitors. Also, they need to adapt to customers’ needs, industry innovations, and market conditions. Thus, you must see how your business plan and revenue goals align with consumers’ needs. A business model canvas is a handy instrument to bring up those aspects for your team. As your company runs, you can make changes and adapt your concise business plan to the current needs.

Puts customers at the forefront

Targeting the right audience is one of the keys for companies to survive. You must choose the right customers for your product to avoid wandering in the market and not reaching your customers. Business model canvas allows your team to understand who your customers are and why your product is valuable to them.

Attracts a team and investors

Any business needs a team with diverse skills and experiences to keep it going. Also, if you want to expand your business, you need to explicitly show your business's capabilities to investors. So, you need a framework that will engage both of these sides. Business model generation helps to outline the value that your company provides. Thus, stakeholders will get a clear view of your company’s perspectives.

Highlights unique value propositions

An outstanding service or feature you offer customers makes them come to you. The unique value proposition explains why customers choose your company among all others. If you look at the business model canvas structure, you will notice that this aspect is at your company's core. If you know your unique value propositions, you will understand other blocks of this template, and they will fall into place.

You may also like: How Much Does It Cost to Build an Online Marketplace in 2023

Business model canvas exemplified by Airbnb

You can find it helpful to see a real-life business model canvas example applied to a business model canvas. Below we illustrate the nine building blocks relevant to the business approach of Airbnb . This is a huge company with a great number of employees. Despite that, the business model canvas is simple and concise. It proves that the approach helps to focus on the main aspects of your business and have a bird’s eye view of business peculiarities. Let’s dive into it.

Customer segments: Airbnb customers can be divided into two separate groups: hosts and guests. Hosts differ by the type of property they offer, location, and activities. Guests differ by the type of trip they take and their interests in activities.

Value propositions: the primary reason why users choose this platform is to rent property simply and reliably. The value proposition for hosts includes income generation and risk minimization with insurance. Hosts can easily join the platform and manage their accounts. On the other hand, guests value this resource for the opportunity to stay in new places or while they are on a trip. Often, it is cheaper compared to hotel services.

Channels: the Airbnb platform operates through two channels: website and app. These channels help Airbnb connect the customer segments. Also, Airbnb reaches new customers through social media, digital advertising, and referral program. Many users simply trust the word of mouth and personal recommendations of the hosts. It is remarkable that Airbnb does not use travel agencies as its channels.

Customer relationship: the platform allows hosts to rent out the property on the conditions hosts choose and agree with guests. Also, the platform offers personalized property suggestions and customer support for both parties. The company maintains its reputation through the strong support of communication between customer segments and managing conflicts.

Revenue streams: Airbnb charges a commission from hosts of 3%-5% per deal and guests of up to 20%. More expensive reservations require less commission. As of 2022, Airbnb’s revenue made 8.4 billion , which is a record for the company.

Key resources: key assets for Airbnb are its platform and listed properties. The company makes it possible for guests and hosts to use them. Also, Airbnb’s resources include technologies and engineering staff to support the platform.

Key activities: these are website support and customer nurturing. For example, by developing the category of Superhost, Airbnb encourages hosts to provide better service. This, in return, will attract more guests to the platform. The company acquires new users through sales and marketing and ensures platform security. Also, Airbnb intermediates conflicts arising between hosts and guests.

Key partnerships: Airbnb’s key partners are hosts, including Superhosts. They list their property and attract guests. The company’s key activity is maintaining its website. So, its key partners are technology firms offering relevant software to list the property and manage bookings.

Airbnb’s partnerships also involve cooperation with charity organizations, such as the Red Cross, and support of animal protection initiatives. Besides, Airbnb partners with the Adventure Travel Trade Association to give hosts and guests tips on outdoor activities and adventures. Thus, Airbnb also improves customer relationships.

Cost structure: Airbnb supports its website, so the technologies and employees require spending. Also, the costs include giving away resources on marketing and customer support. Other Airbnb’s spendings cover customer acquisition, insurance, and administrative costs.

You may also like: An Online Marketplace Marketing Strategy That Works in 2023

Key steps in creating a business model canvas

Filling the business model canvas takes several steps. Moving with these steps, you will get insights into the nine elements. We listed the crucial steps in the image below.

Now, let’s see what these steps imply.

1. Gather materials and stakeholders

Developing a business model canvas involves many teams, such as marketing, sales, and project managers. Participation of the company’s top management, investors, and the business development department is also advisable. This collaboration will bring up the vision of the necessary business aspects. You and your teams will know where to move further by defining them.

Also, you will need research and data on your industry, target audience, and competitors. These valuable data sources will help you correctly fill the business model canvas.

2. Fill in the canvas template

Representatives of the necessary teams can together decide on the vital aspects of the business model canvas. You do not need to make a thorough plan at this stage. You add the essential data to form the direction for your company and teams. If required, you can adjust data later as your business evolves.

3. Test assumptions

The filled business model canvas can be changed at any time. This is the main benefit of this tool. By trying assumptions, your team can develop new ideas and discover that the filled data can be replaced. For example, you can choose other key partners with more competitive conditions. Or your revenue streams can be adjusted with alternative paid methods.

4. Support and maintain

A business model canvas is often seen as a planning method. But you can get more use of it. As your team gets new ideas, fill in your canvas to keep it up-to-date. In case of significant changes, you can rewrite it on the whole. An updated business model canvas is a powerful tool to realize how you will develop your business. You can also show it to stakeholders to obtain investments. In any case, it is a multifaceted and flexible asset.

Project discovery as the most crucial step in creating BMC

Creating a business canvas is crucial to define your business development strategy. But how can you start by outlining the vital points for this? At Codica, we rely on the product discovery process. This step in custom software development service is crucial to identify the project requirements. As a result, a client gets an estimation of project development terms and costs.

So, the main goals of the product discovery process are as follows:

• Identify the problems that the product solves;
• Discover the target audience and competitors;
• Define the project’s timeline and budget;
• Elaborate user flow;
• Create prototypes;
• Prepare a feature list, including killer features.

Since you better understand the needs of your target audience and the project’s potential, you minimize risks when launching your product. So you can deliver better results to your prospects.

Project discovery parties

Product discovery sessions serve as an umbrella for parties who discuss the project requirements. The representatives taking part in this process include the following:

• Client and their representatives who describe the purpose and requirements of the solution;
• Business analyst/product manager who collects, analyzes, and structures the data from the client;
• UI/UX designer who creates prototypes based on the information from the client and their research for custom app design ;
• Lead of software engineers who suggests optimized team composition and tech stack based on research and requirements.

All of the parties contribute to creating a thorough plan for solution development. Below you can see in more detail how the sides of the product discovery process are involved in the discussion.

After the series of discussions, you will get documents with your solution's timeline, costs, and final look. These documents include the following:

• The list of primary features;
• Clickable prototypes;
• The product architecture and tech stack;
• Time and cost estimates;
• Project specification;
• Advice on team composition.

Just like in a business model canvas, these documents can be changed if you or the team see the need for this.

For example, relying on this method, we created a multi-vendor marketplace platform for B2C and C2C segments. The client wanted to create a platform where people can shop online in one place. This would save them hours and even days compared to searching for products online in different stores. Also, the aim was to make the platform engaging for customers where they could share their experience with the platform. Despite the platform's versatility, its design should be intuitive so that users can navigate through the product categories and filters.

During the detailed discovery sessions, we helped our client clarify how to implement features for displaying product categories and subcategories. We suggested how to divide the platform into sections with a simple switch in the menu.

As a result of development, the platform helps users find products in many categories. We optimized the platform for better search engine rankings. Our team elaborated on the Local and Connect sections. They make the platform more engaging as users can search for local stores and share their experiences with the platform.

Also, we created a minimalist design with convenient functions that allows you to find items quickly. Check the video below to grasp how the platform works.

Viable questions in each building block

As you fill your business model canvas template, addressing the right questions is crucial to making correct assumptions. So, we prepared a list of possible questions you can put in each of the nine blocks of a business model canvas.

These questions break each segment into smaller chunks. You can manage each broad category with these elements and get relevant answers. Feel free to adapt them to your business needs. Also, you can select some questions from the given if that suits you better.

• Who are your potential customers?
• What are your customers’ pain points?
• What sorts of products do you provide to particular groups of customers?
• What is the value you deliver to customers?
• Which customers’ problems do you solve with your products?
• Which channels are beneficial to deliver value to customers? Are you using them now?
• Are your channels cost-efficient? What channels work best?
• Do your channels suit well customers’ routine actions?

Customer relationships

• What relationships do you hold with each customer segment?
• Are those relationships costly?
• How do those relationships connect with the rest of your business model canvas?
• What are the values your customers are ready to pay for?
• What are the best ways for your customers to pay for your value?
• Do revenue streams contribute to your total?
• How do you involve new financing sources, if needed?
• What key resources do you need to run your business?
• How do they help to improve your relationships with customers?
• How do they help make channels and revenue streams advantageous?
• What are your key activities to improve customer relationships, channels, and revenue streams?
• How do you bring up the value propositions to customers with your activities?
• Who are your main partners?
• What are the resources that you gain in your partnerships?
• What are the key activities that your key partners carry out for you?

Cost structure:

• What are the expenditures necessary for your business model?
• Which activities and resources are the most expensive?

Related reading: 10 Best Marketplace Monetization Strategies to Succeed

Life after creating your business model canvas

Once you’ve created your business model canvas, you can use it in your everyday business routines. This is its purpose, to guide you in your business journey. So, how can you use your business model canvas for the best of your company?

Tracking your progress. Use your business model canvas as a statistics board reflecting your progress in particular sections. Highlight those areas that can perform better and those where you succeed.

Discussions with teams. The business model canvas is helpful for discussing it with your teams. Everyone can see the bright and dark spots and bring solutions or improvements.

A better understanding of customers. Your customers are the force that keeps your business running. When they feel your care, they are more loyal to your brand. So, you can use your business model canvas to get insights on how to build strong relationships with them.

Hiring new talent and showing it to investors. When engaging new talent, you can show them the business model canvas so they familiarize themselves with the company’s state. Also, you can use it to support your business ideas when talking to investors about attracting capital.

You may also like: MVP Development Cost: 5 Main Aspects for Aspiring Entrepreneurs

Software for creating a business model canvas

A traditional way of creating a business model canvas is to take a massive sheet of paper or a whiteboard and fill in the nine areas. But digital solutions can also help you visualize and share the template between teams. Below are several examples of prominent business model canvas software.

Strategyzer. This solution comes from the company co-founded by Alex Osterwalder. It is versatile and convenient. The tool allows you to create a business model canvas and value proposition canvas, providing real-time teamwork. An estimator tool analyzes revenue flow and calculates the business idea's viability. The tool also estimates the potential of startups with their price. The solution has convenient color marking and improved encryption. The subscription costs $300 annually, with unlimited canvases and unlimited users.

Canvanizer. The tool has been there for a while, providing an excellent experience in building business model canvases. The website also offers templates for other types of canvases, such as lean canvases and service design canvases. The team can view and share the canvas and convert it into sharable formats, such as .pdf, .png, and more.

Visual Paradigm. It is a versatile set of tools for development teams' collaboration and creating diagrams. Among other visualization diagrams, the app features various templates of business model canvases. You can choose cards with different colors to mark each of the nine areas.

Miro. Miro is a whiteboard for teamwork, creating content, brainstorming, strategic planning, and more. In addition, it provides various types of templates for collaboration and business model canvas. The software allows you to select and share a template with a team. After that, anyone can contribute to developing the template by bringing their ideas. The tool also offers the option of creating canvases from scratch. The video below presents how you can create and manipulate templates in Miro.

CNVS. This software keeps the features simple and presents them with a minimalistic design. The basic set of features is free. You must pay for advanced features, such as unlimited workspaces, private canvases, and sharing with others. The software offers lean canvas, business canvas, and feature canvas templates. The basic set of templates and team collaboration tools are given for free. Yet, if you need unlimited workspaces or support, you must pay an additional monthly fee of €7.99.

Wrapping up

As Alexander Osterwalder put it, business models have a short lifespan in an ever-changing environment. The business model canvas serves best regarding that possibility. With the evolution of your business, you can adjust the nine areas so your business performs better. This approach is ideal for modern, ever-changing market conditions where you must react quickly.

Remember also that those areas are intertwined and work as a whole. This means that changes in one sector will result in transformations in others.

However you choose to build your business model canvas, it will serve the best of your company. Let your teams share their insights and improve the business model template to keep it updated.

If you need help discovering the key points of your business project’s potential, feel free to contact us . Also, check our portfolio to see more projects that started from defining the key business points. Our experts will eagerly help you with estimating your project’s business opportunities and development.

Frequently Asked Questions

The purpose of business model canvas (BMC) is to outline the basic aspects of the company’s business. They include customer segments, revenue streams, and cost structure. A company can use this map to see where it succeeds and where it could perform better and update BMC accordingly.

Key resources are assets that help a company work. They are the tools to deliver your value proposition and connect with customer segments. Resources can be physical, intellectual, financial, and human.

It is a unique reason why customers choose your service or product. The value proposition is a tool to solve your customers’ pain points. Such a solution can be one of a kind or add improvements to existing products or services.

Customer segments cover customers that buy your product or service. A company’s business model can have one or several customer segments. It depends on the value proposition you offer and channels you use to reach them.

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Denis Oakley & Co

I HELP BOLD LEADERS TRANSFORM THEIR BUSINESSES AND THE INDUSTRIES THEY COMPETE IN

October 29, 2021 By Denis Oakley

Guide to the Value Proposition Business Model Canvas

Today we’re going to look at capturing your value proposition on the business model canvas. So far we’re showing the problems that we want to solve and the people who have them. Today we’re starting to move on to solutions – otherwise known as value propositions.

This is always a challenge in real life.

‘What problem are you solving ‘ I ask

‘We make widgets that enable you to go faster than light’

‘But why? What’s the problem?

‘What do you mean?’

If there’s not a problem-solution fit, it is SO difficult to grow a business. Trust me I’ve tried multiple times over the years.

Adding your value proposition to the business model canvas

I’m going to dive right in and put ‘Design business models’ down on the example business model canvas for the value proposition.

Is this right? Well, not exactly. It’s not that simple, but there’s a reason why we have about 10% of the business model canvas to write our solution on. Most people will take pages and pages, and write down too much.

Here we are focusing on the big picture. Capture in a few words how you solve the problem. A useful way of looking at it is to think of the problem as the why.

Why are we here? To solve the problem of businesses dying because they don’t have the right business model.

What are we going to do? Help them to design better business models.

How are we going to do it? Writing a daily blog post on how to do it and posting it on LinkedIn. That’s too much detail.

You can break it down a little bit more. Here’s an example.

Add more detail to the value proposition business model canvas

I mentor leaders, I advise companies on how to design disruptive business models, and I educate as many people as I can through blogging, videos and public speaking.

On the canvas, these value propositions appear as Mentor , advise and educate.

When I’ve worked with companies figuring this out I’ve found that if there is a lot to write here and it all seems important, there’s usually more depth that you haven’t uncovered. If you can’t take the value proposition to the customer and have them understand almost instantly it’s an early signal that you haven’t got a problem-solution fit.

If the value proposition (or group of value propositions) are so complex that it takes time to explain then you aren’t working at the right level of detail.

Testing the value proposition again customers and the problem

There are two tests to run at this stage.

Is the value proposition clear to the customer at a high level? We want them to ask ‘Do I need this?’ not ‘What is sie talking about?’

Does the value proposition solve a problem for the customer? Does it solve THE problem that we’ve already written down?

Let’s try this now.

I design business models for companies.

That’s pretty clear. The listener may not know what a business model is but the grammar is in a clear form so even if they need more, they can get 90% of the way themselves.

At the next level down, Denis designs business models for companies by advising, mentoring and educating them. Again it’s pretty robust.

Now for the second test.

Does this value proposition solve the problems that we care about?

If a company needs a business model because its old one isn’t working, will designing a new business model solve the problem.

A qualified yes. A new design is useful, perhaps critical, but they have to do something to change the company from how it is now, to where needs to be. The same logic applies to the other segment.

Iterate the problem, customer and VP until you get a fit

What do we do here? There’s a choice. You can tweak your value proposition so that you solve the problem in full. We could change my value proposition to ‘Transform business models’ or ‘Design and build business models. The value proposition is then promising to solve the whole problem.

Alternatively, we revise the problem or the customer segment to improve the fit.

Let’s try changing the problem. Companies that need to change their business models but have no skill/experience in designing new ones. That would work. We need to go back and validate this narrower problem definition

Alternatively, we narrow the customer segment and target companies who have failing business models but are competent in organisation change and transformation. That way if our value proposition is to design new business models they can then implement them.

As you can see this is a highly iterative process. As we add more pieces in we keep having to make small changes and adjustments.

[note: it’s always worth using the value proposition canvas to do a deep dive into the design of the value proposition]

I have never done a business model where we sketched it out and got it right the first time. By continually backchecking how the pieces fit together, like a jigsaw we’re asking lots of how what and why questions that increase our knowledge and understanding very quickly.

Going further when you have gaps between the value proposition and the problem you are solving, or what the customer wants, can seem attractive. You don’t have to do lots of rework. There’s always a big cost later as your marketing and sales don’t deliver the numbers you expect.

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• The Value Proposition in the Business Model Canvas: What Problem are We Solving?
• How To Do A Business Model Canvas
• Startups and Finding Decent Problems to Solve
• Beginners Guide to the Business Model Canvas: Part 1
• Beginners Guide to the Business Model Canvas: Part 2 – Customer Segments

About Denis Oakley

Explorer | Trail Runner | Mountain Lover

'Big' companies are civilisation. I stay in the wilderness guiding entrepreneurs and startups on their journey to becoming 'Big'.

Then I head back to the frontier

Strategy | Marketing | Operations

Ready to start?

I help entrepreneurs transform their industries through wiser choices

Outcome : More Traction, Bigger Rounds, Better Products

Method : Problems, Customers, Business Models, Strategy

How to Write a Great Value Proposition [7 Top Examples + Template]

Published: January 31, 2024

Your company's value proposition is the core of your competitive advantage. It clearly articulates why someone would want to buy from your company instead of a competitor.

So how do you actually write a value proposition statement that's strong enough to lift conversion rates and sales? In this article, you'll learn the definition of a value proposition, what a value prop isn't, examples of some of the best value props we've seen, and tactics to create amazing value props.

We'll cover:

What is a value proposition?

• Value Proposition vs Mission Statement (vs Others)

Elements of a Value Proposition

How to write a value proposition.

• How to Create a Value Proposition Canvas

Value Proposition Templates

Value proposition examples, value proposition canvas examples, tactics to develop an effective value proposition.

• Let's summarize: What makes a good value prop?
• Value Proposition FAQs

A value proposition is a short statement that communicates why buyers should choose your products or services. It's more than just a product or service description — it's the specific solution that your business provides and the promise of value that a customer can expect you to deliver.

Value propositions are one of the most important conversion factors. A great value proposition could be the difference between losing a sale — and closing it.

For that reason, it's important to create one that accurately represents your products and services and makes it clear why you're the best choice. However, writing it from scratch is hard. Download our templates below so you can follow along with the rest of the post.

Free Value Proposition Templates

15 templates to help you brainstorm, write, and promote your value prop.

• Value Proposition Writing Templates
• Value Proposition Canvas Template
• Brand Hierarchy Template

You're all set!

Click this link to access this resource at any time.

Your value proposition is a unique identifier for your business. Without it, buyers won't have a reason to purchase what you sell. They may even choose a competitor simply because that business communicates its value proposition clearly in its marketing campaigns and sales process .

That said, you might think: Isn't my value prop interchangeable with, say, my slogan?

Nope. It's easy to confuse your value proposition with other similar brand assets , such as your mission statement, slogan , or tagline. We break down the differences below.

Value Proposition vs Mission Statement

Your value proposition details what you offer customers and why they should choose you, while a mission statement details your objective as an organization. While the two can have points in common, a value prop is more product- and service-oriented while a mission statement is more goal-oriented.

Here are two examples for HubSpot and our CRM platform:

Value Proposition: "An easy-to-use CRM."

Mission Statement: "To help businesses grow better."

Value Proposition vs Slogan

A slogan is a short, catchy statement that brands use in marketing campaigns to sell a specific product. While your value proposition wouldn't necessarily go in an ad (at least, not usually), a slogan would. The most important thing to note is that a company can have different slogans for different campaigns or products.

Here are two examples from De Beers Group:

Value Proposition: "Exquisite diamonds, world-class designs, breathtaking jewelry."

Slogan: "A diamond is forever."

Value Proposition vs Tagline

A tagline is a short statement that embodies a certain aspect of your brand or business. While a value proposition is more concrete, a tagline can represent a concept or idea that your business stands for. Most businesses have only one tagline that is instantly recognizable and connected to their brand.

Here's an example from Apple:

Value Proposition: "The best experiences. Only on Apple."

Tagline: "Think Different."

Value Proposition vs Mission Statement vs Slogan vs Tagline

Now, let's look at an example of a business that has all four: Nike. Remember that slogans can differ depending on the campaign.

Value Proposition: "Customizable performance or lifestyle sneakers with unique colorways and materials."

Mission Statement: "To bring inspiration and innovation to every athlete in the world."

Slogan: "Twice the guts. Double the glory."

Tagline: "Just do it."

TLDR; While your value prop should help differentiate you from the rest of the industry, keep in mind it's not a slogan , tagline, or mission statement. Those types of copy are important accessories to your brand, but your potential customers and employees don't choose one business over the other solely based on these elements.

Your value proposition goes deep into the problems you want to solve for buyers, and what makes your product or service the perfect solution.

Your value proposition will most often appear on your website. While you can include it on marketing campaigns and brochures, the most visible place is your home page and, if you'd like, your product pages.

There are three main elements of a value proposition: the headline, the subheadline, and a visual element.

The headline of your value proposition describes the benefit the customer will receive as a result of making a purchase from your business. The headline can be creative and catchy, but it should be clear and concise, first and foremost.

Subheadline or Paragraph

The subheadline or paragraph should explain in detail what your company offers, who it serves, and why. In this section, you can elaborate on the information in the headline.

Visual Element

In some cases, a video, infographic, or image may convey your value proposition better than words alone can. Enhance your message with these visual elements to capture your audience's attention.

To better visualize these tools, here are a couple templates to follow when formatting a value proposition.

• Identify your customer's main problem.
• Identify all the benefits your product offers.
• Describe what makes these benefits valuable.
• Connect this value to your buyer's problem.
• Differentiate yourself as the preferred provider of this value.
• Use a template to help you brainstorm.

If you're a visual learner, check out this video to learn how to create a value proposition. 

Step 1: Identify your customer's main problem.

While this will require some upfront research, you can get a head start on this aspect of the value proposition by speaking with different members of your team. Customer service reps, marketing specialists, and salespeople can fill in the gaps about what problems your customers are looking to solve by using your product or service.

For example, let's say your business sells tax software on a subscription basis and automated templates are included in the software package. Your ideal customer is looking for an affordable and user-friendly way to access complicated tax documents for their business. In this example, your business's offerings could be the solution they need.

Step 2: Identify all the benefits your products offer.

This step can be as simple as listing out every product you sell and describing its primary benefit. The benefit should be concise and focused on a single customer need.

In our tax software example, you'd list each tax template, explain the benefit it provides, and why a customer would need it.

Step 3: Describe what makes these benefits valuable.

Next, add another sentence that explains why this benefit matters to the customer.

Using the same example above, the value would be that customers have affordable tax documentation at their fingertips — something that would normally cost them thousands of dollars.

Step 4: Connect this value to your buyer's problem.

Next, pair the buyer's problem to the elements that make your product or service valuable. Do they align? If so, you're ready to refine your value proposition to differentiate your offerings from the competition. If they don't align, repeat the steps above until you find a valid buyer need and a viable solution your business offers to meet that need.

There are three templates we think do an excellent job of connecting value to buyer pain points:

Step 5: Differentiate yourself as the preferred provider of this value.

Finally, polish your value proposition to make it unique. Is there a specific customer service offering your business provides that others don't? Do you offer any additional services that other companies charge for? These elements can help differentiate your value proposition from competitors while keeping the focus on the buyer's needs.

Step 6: Use a template to help you brainstorm.

Once you understand the first five steps, you can easily implement them into value proposition templates.

Steve Blank Method

Instead of focusing on the features themselves, Blank saw the need to emphasize the benefits derived from the features in a simple sentence. By following this formula you'll connect the target market and their pain points to the solution:

"We help (X) do (Y) by doing (Z)"

Geoff Moore Method

Moore provides a template that's more specific in identifying the industry categories alongside the benefits customers value. This makes a more clear value proposition formula as follows:

"For [target customer] who [needs or wants X], our [product/service] is [category of industry] that [benefits]"

Harvard Business School Method

According to HBS a value proposition is executed best when it answers the following questions:

• "What is my brand offering?"
• "What job does the customer hire my brand to do?"
• "What companies and products compete with my brand to do this job for the customer?"
• "What sets my brand apart from competitors?"

HubSpot Value Proposition Templates

HubSpot offers 15 free templates to help you brainstorm the perfect value proposition for your brand. Not only can they help you hone in on your business's core values, but they can also give you a boost when working on your actual statement.

Some questions you will ask yourself when using the HubSpot templates include:

• "Why do you do what you do?"
• "How do you do what you do?"
• "What do you do for your customers?"

Download for Free

Now, before you write the statement itself, it's important to create a value proposition canvas.

Taking these three elements into consideration, you'll be able to make your own after you build a value proposition canvas.

Value Proposition Canvas

A value proposition canvas is a visual tool that helps you position your business's product or service around your customers' needs. The goal of the value proposition canvas is to identify how your business provides value within the market. You can use one when introducing a new offer into the market or when enhancing an existing one.

The value proposition canvas is made up of two major components: the customer profile and the value map.

Here's how to make one:

Step 1: Create a customer profile to represent your target buyer.

The customer profile makes up the first half of the value proposition canvas. When performing this exercise, you'll want to start with this section first so that their wants and needs can influence the overall value proposition canvas.

The customer profile consists of three areas:

Customer Jobs

What is the task your customer needs to complete or the problem they're trying to solve with your product or service? The answer to this question sums up the "customer job" or the purpose of your product or service in the eyes of the customer.

Customer Expectations

"Expectations" are also referred to as "gains" — in other words, what your customer is hoping to gain from doing business with you. No matter what you sell, your ideal customer will have an expectation of what that product or service will do for them. In this section, you'll use research to explain what your customers expect from you in order to purchase your product.

Customer Pain Points

As your customer completes their "customer job," what pains do they experience? Do they take any risks while they do the customer's job? Do they experience any negative emotions? These pain points should be considered so that you include the most helpful products and services on the value map side of the value proposition canvas.

Step 2: Create a value map for your products and services.

In this section of the value proposition canvas, three specific sectors help describe what the business offers to the customer.

Gain Creators

These are features your products or services have that make the customer happy. Think creatively about the elements of happiness your customers experience. Consider their financial and social goals as well as their psychographics .

Pain Relievers

In the section above, we discussed customer pains. This section will define exactly how your business will help them overcome those pain points.

Products & Services

While this section won't list every single product or service your company offers, it should include the ones that will create the most gain and alleviate the most pains for your customers.

Step 3: Determine value proposition-customer fit.

Once you've completed the value proposition canvas exercise, the next step will be to determine how your value proposition fits within the customer profile. To do this, you'll use a ranking process that prioritizes products and services based on how well they address the customer profile.

All together, your value proposition canvas should look like this:

Next up, let's go over some templates you can use when you're creating your value proposition and publishing it on your website.

We've crafted 15 templates to help you create an amazing value proposition for your brand — and pairing each of them with an example of how they may look for a real business.

This offer has all the tools you need to craft a value proposition that precisely communicates your brand to users and stakeholders, including:

• 10 value proposition writing templates
• 1 value proposition canvas template
• 1 mission statement brainstorm template
• 1 vision statement brainstorm template
• 1 competitive analysis template
• 1 brand hierarchy template

Click here to download these free value proposition templates for your business.

Now that we've reviewed the elements, visual tools, and templates — let's look at some brand examples that effectively identify and satisfy its customer needs.

• HubSpot: An Easy-to-Use CRM
• FedEx: Manage Your Home Deliveries
• LG: State-of-the-art Living Experience
• Subaru: The most adventurous, most reliable, safest, best Subaru Outback ever
• Samsung: Get Ready to Unfold Your World
• Imperfect Foods: Groceries that help you fight food waste
• Hulu: All The TV You Love

Because value propositions are typically internal information and rarely stated publicly, finding a value proposition example to model yours after can be difficult. We've taken the liberty of using the value proposition canvas and applying it to some successful companies that have been recognized by the American Customer Satisfaction Index (ASCI).

In these examples, you'll see real-world instances of customer gains and pains aligned with well-known products and services offered by these companies.

1. HubSpot: "An easy-to-use CRM."

Headline: "An easy-to-use CRM."

Subheadline/Paragraph: "HubSpot's CRM platform has all the tools and integrations you need for marketing, sales, content management, and customer service."

Visual Element:

Most companies can benefit from using a CRM — even freelance businesses and small family-owned firms. The problem is that most systems are expensive, over-complicated and cobbled together, creating challenges for businesses as they grow.

HubSpot's value proposition aims to target active CRM users who are tired of handling over-complicated systems, and beginners who are intimidated by legacy options. These users want a system that makes growth easier, not harder.

While each product in HubSpot's CRM platform can be used individually, the true benefit comes from using each hub in tandem. Instead of having to deal with incompatible software and productivity tools, you can manage all your marketing, sales, content, and customer service needs in one place. To that end, the product's value proposition emphasizes its ease-of-use and ability to synchronize different teams across the business.

The brand includes an image of a smiling woman to show what it would be like to use the product in your team (hint: it's so easy, it'll make you smile).

2. FedEx: "Manage your Home Deliveries"

Headline: "Manage Your Home Deliveries"

Subheadline/Paragraph: Sending and receiving packages is convenient and safe for individuals who want to ship ideas and innovations across the globe.

Image Source

If you own a business, shipping and packaging products is likely a significant part of your operations, but it can be a time-consuming, labor-intensive, and plain inconvenient process. If you're a consumer, you've likely experienced driving to a shipping office to get your package after a missed delivery. Both of these are significant pain points for FedEx's target customers.

With FedEx, you can opt to receive notifications about your package's delivery status, provide instructions on how to deliver packages to your home, or even request to pick up at a different location.

Shipping packages with FedEx is just as easy as receiving them. All you have to do is create a shipping label on FedEx's website, choose which shipping service you'd like to use, and then drop your package off. Even if there isn't a FedEx office nearby, you can still drop off at national retailers like Walgreens, Dollar General, OfficeMax, and Walmart.

FedEx's value proposition makes it clear that it will make managing your deliveries much, much easier — whether you're a business or a consumer.

3. LG SIGNATURE: "State-of-the-art Living Experience"

Headline: "State-of-the-art Living Experience"

Subheadline/Paragraph: LG SIGNATURE delivers an innovative product design that creates an exceptional living experience for people who want to achieve a state-of-the-art living experience.

The right home appliances can make your at-home experience easy and hassle-free — or it can quickly create headaches with low power efficiency and outdated features. In its value proposition, LG SIGNATURE targets customers who are willing to spend just a little more on the right appliance in exchange for a comfortable, hassle-free, and luxurious experience.

LG SIGNATURE isn't your typical appliance brand. It doesn't want to sell you a bunch of products you don't need with unnecessary features you won't use. Instead, it's dedicated to crafting premium products that are functional, user-friendly, and aesthetically pleasing.

Even the imagery helps you imagine what your life would be like after purchasing an LG SIGNATURE appliance. Instead of having to replace obsolete appliances every few years, you can enjoy innovative, long lasting products.

4. Subaru: "The most adventurous, most reliable, safest, best Subaru Outback ever."

Headline: "The most adventurous, most reliable, safest, best Subaru Outback ever."

Subheadline/Paragraph: The 2022 Subaru Outback takes drivers to the most adventurous places in style with the most advanced safety technology.

Subaru knows that its target audience uses its Outback SUVs for outdoor adventures. Rather than designing a vehicle solely for utility, Subaru made the 2022 Outback attractive and spacious enough for everyday use as well as reliable and sturdy enough for all terrain and weather conditions.

So in its value proposition, it makes it clear that the Outback will help its drivers go off the road safely and in style. If I were a potential Subaru customer, I'd know exactly what I'm getting from the headline alone. That's why it's so important to think about your wording, because it's likely the first thing potential buyers will see.

5. Samsung: "Get Ready to Unfold Your World"

Headline: "Get Ready to Unfold Your World"

Subheadline/Paragraph: This is everything you'd want in a premium, durable, 5G smartphone. Then we made it unfold — revealing a massive screen so you can watch, work and play like never before.

In its value proposition, Samsung effectively targets its most tech-savvy segment by front-lining its most innovative design to date: a foldable phone that can double as a mini-tablet. Even more, it solves a common pain point for some customers: owning both a tablet and a mobile device can feel unnecessary, so why not get the best of both worlds?

The Galaxy Z Fold4 attracts customers by promising a lightweight, durable smartphone with an ultra powerful processor.

Some of its premium features include hands-free video capabilities, a large screen that's perfect for multitasking, and an advanced camera that's perfect for taking pictures at night. The phone is also crafted with high quality materials that help protect it from water damage, scrapes, and scratches. Plus, its unique design will appeal to anyone who appreciates cutting-edge technology.

6. Imperfect Foods: "Groceries that help you fight food waste"

Headline: "Groceries that help you fight food waste"

Subheadline: "Sustainably sourced, affordable, and conveniently delivered to your door."

Whether you're shopping for an entire family or just yourself, grocery shopping can be a major pain.

Planning out all your meals for the week can be overwhelming and time-consuming, especially if you're trying to ensure no food goes to waste. Even if you do successfully create the perfect shopping list, finding the time to go to the store can also be a challenge.

In its value proposition, Imperfect Foods offers a sustainable alternative to traditional grocery shopping. Unlike other delivery services, Imperfect Foods' grocery selections solely consists of food that would have otherwise been discarded due to minor cosmetic and physical imperfections.

Imperfect Foods' website design further communicates its commitment to reducing food waste with its badge counting how many pounds of food it has saved.

The company also appeals to customers' sustainability concerns by delivering to neighborhoods in one trip to reduce CO2 emissions and only using recycled packaging.

7. Hulu - "All The TV You Love"

Headline: "All The TV You Love"

Subheadline: "What full seasons of exclusively streaming series, current-season episodes, hit movies, Hulu Originals, kids shows, and more."

In July 2022, streaming services outperformed cable and broadcast TV for the first time ever. However, as streaming becomes more and more popular, customers are at risk of getting fatigued by the overwhelming amount of on-demand content to choose from.

Hulu's value proposition aims to target TV consumers who are tired of having to pay for multiple streaming services in order to have access to all the content they want to watch. Each Hulu subscriber gets access to a vast catalog of exclusive series, popular movies, original content, and more.

One of the ways Hulu makes good on its promise of providing "all the TV you love" is by offering subscription bundles with ESPN+ and Disney+, which can save consumers money if they were to subscribe to each service separately. Hulu also has premium network add-ons that give users access to even more content without having to leave the platform.

Samsung's value proposition for its foldable mobile device is smart, well-targeted, and visually stunning.

You've seen some brilliant value proposition examples, now let's review some examples of value proposition canvases.

• HubSpot Value Proposition Canvas
• FedEx Value Proposition Canvas
• LG Value Proposition Canvas
• Subaru Value Proposition Canvas
• Samsung Value Proposition Canvas
• Imperfect Foods Value Proposition Canvas
• Hulu Value Proposition Canvas

1. HubSpot Value Proposition Canvas

Customer Profile

• Customer Jobs: HubSpot customers need to effectively enable their sales teams to do their best work while avoiding complicated workflows.
• Gains: Customers want to increase their sales rep productivity levels and boost sales.
• Pains: There are plenty of CRM options, but they're often over complicated and create silos.
• Gain Creators: The HubSpot CRM platform offers streamlined contact management software and productivity tools that will help sales teams do their best work.
• Pain Relievers: The user-friendly interface and unified platform offers ease-of-use and high visibility across systems.
• Products & Services: The HubSpot CRM platform includes Sales Hub, an enterprise-level sales software that's simple yet powerful enough to cater to the needs of businesses small and large.

2. FedEx Value Proposition Canvas

• Customer Jobs: FedEx customers want to share ideas and innovations with other individuals by shipping goods around the world.
• Gains: Customers want a hassle-free way to return online orders and are looking for a safe and secure way to receive their packages.
• Pains: Returning a package at a FedEx shipping center can be inconvenient, and managing home deliveries can be a hassle.
• Gain Creators: Customers can drop off their FedEx packages at places they shop most like Walgreens or Dollar General, and have peace of mind knowing where their package is at all times.
• Pain Relievers: Thousands of FedEx drop-off locations across the country, receive notifications when a package is en route and inform the driver where to leave the package.
• Products & Services: FedEx Drop Box locations make returning packages convenient, and the FedEx Delivery Manager reroutes or reschedules deliveries to work with the customer's schedule.

3. LG Value Proposition Canvas

• Customer Jobs: LG customers want simple, yet innovative technology that helps them achieve a state-of-the-art living experience.
• Gains: Customers have an intuitive and responsive experience with each appliance they interact with inside their homes.
• Pains: There are too many unnecessary buttons and features on appliances that get in the way of a simple living experience.
• Gain Creators: Customers can use technology to enhance their home experience without needing to read a manual.
• Pain Relievers: LG offers a simple design that focuses on the user and their lifestyle.
• Products & Services: LG SIGNATURE delivers an innovative product design that creates an exceptional living experience.

4. Subaru Value Proposition Canvas

• Customer Jobs: Subaru customers want to explore the world's most adventurous places in a reliable and safe vehicle.
• Gains: Customers want to explore the land in a stylish and spacious SUV and look for advanced technological elements in their vehicles that enhance performance and safety.
• Pains: The safest vehicles are not the most visually appealing, and some SUVs aren't equipped for all-weather or all-terrain environments.
• Gain Creators: Subarus have a stylish exterior and interior with ample ground clearance that protects the vehicle against damage from the environment and advanced technology to reduce crashes and make long road trips safer.
• Pain Relievers: Subarus have a rugged blacked-out trim for style and protection, 9.5-inch ground clearance for better stability and performance, and driver-assist technology that helps drivers see better, prevent crashes, manage cruise control, and brake automatically in emergency situations.
• Products & Services: The 2022 Subaru Outback with standard eyesight assist technology, automatic pre-collision braking, adaptive cruise control, and lane-centering.

5. Samsung Value Proposition Canvas

• Customer Jobs: Samsung customers are tech-savvy and follow the latest trends, driven by efficiency and aspirational lifestyles.
• Gains: Customers want an all-in-one way to enjoy media, work productively, and have a fun experience all in the palm of their hands.
• Pains: Common smartphones have size limitations that strain entertainment viewing, gameplay, and work capabilities.
• Gain Creators: Samsung offers a unique and expansive design with capabilities beyond that of an average smartphone, offering the most advanced technology to help customers perform tasks to fulfill work and play.
• Pain Relievers: Samsung provides a smartphone that displays content in tablet-like viewing and displays up to three apps simultaneously.
• Products & Services: The Galaxy Z Fold3 5G folding 6.2-inch smartphone with dynamic AMOLED 2X screens, ultra-thin glass with S Penfold edition, and super-strong lightweight armor aluminum frame.

6. Imperfect Foods Value Proposition Canvas

• Customer Jobs: Imperfect Foods customers want a simple and sustainable option for buying fresh produce.
• Gains: Customers prefer to have their groceries delivered rather than going to the store each week.
• Pains: Produce can go to waste easily, and grocery delivery is expensive.
• Gain Creators: Imperfect Foods sources and delivers food that would have otherwise been wasted because of minor imperfections.
• Pain Relievers: Waste is minimized by delivering area groceries in one trip and recycling packing.
• Products & Services: Imperfect Foods curated food selection includes produce, pantry staples, dairy products, snacks, plant-based foods, meat, and wellness products.

7. Hulu Value Proposition Canvas

• Customer Jobs: Hulu customers are overwhelmed by the amount of video streaming options and want a platform that has all of their favorite shows and movies in one place.
• Gains: Customers primarily watch movies and TV shows via streaming services.
• Pains: There is an abundance of streaming platforms, and customers can easily get overwhelmed with the amount of TV and movie options.
• Gain Creators: Hulu's streaming library features full seasons of exclusive series, popular movies, original content, and more.
• Pain Relievers: The different subscription plans and premium network add-ons allow customers to curate their streaming experience to their tastes and can help minimize the amount of services they subscribe to.
• Products & Services: All subscription plans include access to Hulu's streaming library, new episodes the day after they air, and ability to stream on different devices.
• Conduct research to determine the value proposition of your competitors.
• Explain the value of your products and services.
• Describe the benefits your ideal customer will experience when they choose your product or service over the competition.
• Develop a unique value proposition for each buyer persona you serve.
• Test your value proposition with your audience using various marketing channels.

1. Conduct research to determine the value proposition of your competitors.

Because your value proposition is the differentiating factor between your business and the competition, it's important to research the propositions of your closest competitors. You can use the value proposition canvas in this post to determine how each company meets the needs of your buyer persona.

Be honest here — it's tempting to focus on the areas in which your competition doesn't excel, but you'll have a better idea of where your product or service fits within the market if you key in on your competitors' strengths.

2. Explain the value of your products and services.

You're probably familiar with outlining the features and benefits of your product and service offerings. This tactic takes that concept a step further. By matching the benefits of your offerings to specific values that your customers have, you'll be able to align what your business provides with what your customers need.

3. Describe the benefits your ideal customer will experience when they choose your product or service over the competition.

When crafting this part of your value proposition, include details about how your product or service will benefit the customer and use examples where you can. Videos, photos, and live demonstrations are all effective ways to illustrate your value proposition because they show the customer exactly what they can expect from your business.

4. Develop a unique value proposition for each buyer persona you serve.

Ideally, you'll be focusing your marketing efforts on a specific target audience. You'll also find that this audience will have different needs based on their buying behaviors. Buyer personas can help you segment your larger audience into groups of customers with similar desires, goals, pain points, and buying behaviors. As a result, you'll need a unique value proposition for each persona. Different products and services you offer may solve certain customer pain points better than others, so developing a value proposition for each persona will better serve each one.

5. Test your value proposition with your audience using various marketing channels.

Each of these tactics will likely be developed internally by your team which means you'll want to validate your work with your target audience. Your value proposition will be communicated through various marketing channels like your website, social media accounts, video, audio, and in person. Test your proposition with members of your audience (both existing customers and non-customers) using each of these channels. Tools like UserTesting can help you streamline this feedback process so that you can implement changes quickly to finalize your value proposition.

We know the makings of a value proposition, so how can you make it a good one? Here's the last three tips we have for you.

What makes a good value proposition?

1. clear language.

Your value proposition should aim to address a primary customer need. This limited focus helps keep your value proposition clear and easy to understand. With just one main idea to comprehend, your audience will be able to quickly decide whether or not your product or service will be the best solution for them.

2. Specific Outcomes

Next, you'll want to communicate the specific outcomes your customer can expect to receive from your product or service. Will they save time? Demonstrate how. Will their workflow become more manageable? Show a before and after workflow diagram. The specific outcomes will be critical components of your value proposition as they'll exemplify exactly how your customers will use your solution to solve their problems.

3. Points of Differentiation

Not only are your potential customers evaluating your business's offerings based on their own needs, but they're also comparing what you offer against competitors. As a result, your value proposition will need to include detailed points of differentiation. These key points will help customers understand exactly what sets your company apart.

Value Proposition Frequently Asked Questions

What is the purpose of a value proposition? To effectively communicate the unique value and benefits that a product or service offers to its target customers to differentiate it from the competition and attract or retain customers.

What if the value proposition fails? If the value proposition fails, it can result in difficulties attracting and retaining customers, losing market share to competitors, and ultimately impacting the product's or service's success and sustainability.

Can you change your value proposition? Yes, a company can change its value proposition by identifying and addressing customer pain points or needs, modifying its product or service offerings, and effectively communicating the new value to its target audience.

Compose a Remarkable Value Proposition

The factors that influence a potential customer to become a loyal customer are limited. Whether your industry has a lot of opportunities to differentiate (like retail) or virtually no unique identifiers (like dairy), you'll find that a value proposition will help you understand your ideal customer and position your business as the best solution for their needs. Use the tactics, tips, framework, and examples in this post to craft your unique value proposition.

Editor's note: This post was originally published in June 2018 and has been updated for comprehensiveness.

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15 free value proposition templates to help you brainstorm, write, and promote your value prop.

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Business Model Canvas Explained: BMC Meaning (Template + PPT)

A product is only as good as the Business Model (BM) that supports it, and creating an innovative product requires an equally innovative BM. The Business Model Canvas is an easy visual tool your team can use to conceptualize and iterate the key aspects of your Business Model.

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Table of Contents

In the modern business strategy , where innovation reigns supreme and adaptability is key, understanding your business model is extremely important. That’s where the Business Model Canvas (BMC) comes in, a flexible tool meant to clarify the key parts of your business strategy in a simple and practical way, It helps you describe, challenge and innovate the Business Model of an organization, and it does this quite well, at least on a high level.

In this guide, we’ll explain what the BMC is all about, why it’s important, and how to use it effectively. Whether you’re an experienced business owner, a corporate leader, or just starting out, understanding the BMC can really help your business thrive. To get started, you can download the Business Model Canvas Template PPT (PowerPoint) Format for easy implementation and customization to suit your specific business needs.

Understanding Meaning and Definition of BMC: What is the Business Model Canv as?

A Business Model encapsulates essential aspects of your business, encompassing your company’s Value Proposition, how you generate and deliver that value, and the associated costs and benefits. Essentially, it answers the Who, What, How, and Why of your business. When crafting a Business Model, it’s beneficial to articulate the assumptions or hypotheses that underpin your business systematically. 

The Business Model Canvas stands as a strategic management tool that serves precisely this purpose. It facilitates a clear understanding of your current Business Model, aids in designing a new one, identifies any critical oversights, and allows for comparisons with other models, it was developed by Alexander Osterwalder and popularized by the Lean Startup movement. Widely adopted by both startups and corporations, the Business Model Canvas enables teams to comprehensively grasp, discuss, and assess a Business Model, as well as swiftly devise or refine one. Its appeal lies in condensing years of business school knowledge and management consulting expertise onto a single page, supplemented with straightforward questions guiding each section’s completion.

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You can now access the complete Business Model Canvas Package, including a full presentation, related models and instructions for use.

The UNITE Business Model Canvas

Key building blocks of the business model canvas template.

The Business Model Canvas (BMC) template consists of nine key building blocks that capture the essential aspects of a business strategy . These building blocks are:

• Customer Segments : Identifies the different groups of customers or markets that the business serves.
• Value Proposition : Describes the unique value that the business offers to each customer segment.
• Channels : Outlines how the business reaches and interacts with its customers to deliver its value proposition.
• Customer Relationships : Defines the types of relationships the business establishes with its customers to acquire, retain, and grow its customer base.
• Revenue Streams : Specifies the sources of revenue generated by the business from each customer segment.
• Key Resources : Lists the essential assets, capabilities, and resources required to deliver the value proposition and operate the business.
• Key Activities : Describes the core activities and processes the business must perform to create and deliver its value proposition.
• Key Partnerships : Identifies the strategic alliances and partnerships necessary to leverage external resources and capabilities.
• Cost Structure : Outlines the costs incurred by the business in operating its key activities, delivering its value proposition, and maintaining its customer relationships.

These building blocks together provide a holistic view of the business model, enabling organizations to analyze, design, and optimize their strategies effectively. In the following sections, we will delve into each element in detail, exploring its significance and how it contributes to shaping a robust business model.

1) Customer Segments in Business Model Canvas

Central to the business model canvas (BMC) is the identification of distinct customer segments, each with its own needs, preferences, and pain points. Customer segmentation in BMC involves dividing a customer base into distinct groups based on shared characteristics such as demographics, interests, and purchasing behaviors. When determining customer segments, it’s crucial to consider who the problem-solvers are, who will perceive value in your offerings, and whether your target audience comprises individuals or businesses. Understanding the characteristics and preferences of your audience, whether they are men or women, young adults, or teenagers, is essential for tailoring your value proposition effectively. 

Additionally, assessing the size of each segment helps gain insights into market dynamics at both micro and macro levels. Creating detailed customer personas for each segment provides a deeper understanding of their needs and preferences, facilitating more targeted and effective marketing strategies.

2) Key Partnerships in Business Model Canvas

Collaboration lies at the heart of successful business endeavours, and the BMC acknowledges the significance of forging strategic partnerships. Whether through supplier relationships, distribution alliances, or joint ventures, leveraging key partnerships in BMC can unlock new opportunities and enhance value delivery. Identifying the key resources required for your business operations is essential for ensuring the smooth execution of activities. These resources encompass both tangible assets and intangible elements necessary to carry out business functions effectively. Tangible resources may include office space, computers, internet connections, vehicles, machinery, and utilities like electricity. Intangible resources, on the other hand, encompass human capital, such as skilled staff members, expertise, and knowledge. By understanding and securing these resources, businesses can facilitate the seamless execution of key activities and enhance overall operational efficiency.

3) Key Activities in Business Model Canvas

Behind every successful business model is a series of key activities that drive value creation and operational excellence. From product development to marketing campaigns to customer support, identifying and optimizing these core activities is essential for sustained competitiveness. The Key Activities of a business or product are the essential actions taken to fulfil the value proposition for customers. It involves considering the resources, time, expertise, and strategies required to deliver value. For instance, activities could include consulting, designing, web development, baking, driving, or shovelling, depending on the nature of the business. Understanding these activities is crucial for optimizing operations and ensuring the effective delivery of value to customers.

4) Revenue Streams in Business Model Canvas

Revenue Streams represent the avenues through which your business monetizes its value proposition, converting solutions to customers’ problems into financial gains. Pricing strategies should align with the perceived value of the solution relative to the customer’s pain point. Various revenue models exist, including pay-per-product, fee-for-service, fixed-rate pricing, subscription models, dividends, referral fees, freemium models, and equity gain opportunities. Selecting the most suitable revenue model hinges on understanding customer preferences, market dynamics, and the unique value proposition offered by the business.

5) Value Proposition in Business Model Canvas

At the core of the Business Model Canvas lies the value proposition, which encapsulates the unique solution a business offers to address the needs or challenges of a specific customer segment. Whether it’s a product or service, the value proposition should distinguish itself from competitors by being innovative, disruptive, or offering distinctive features. These propositions can be quantitatively defined by factors like price and speed of service, or qualitatively by aspects such as customer experience and design. Crafting a compelling value proposition is essential for attracting and retaining customers, as it communicates the benefits and advantages that set a business apart in the market landscape.

6) Channels in Business Model Canvas

Effective distribution channels are essential for reaching and engaging target customers, and the BMC helps businesses identify and optimize these channels. Identifying the appropriate channels through which to reach your customers is integral to the success of your business. These channels serve as the pathways for customers to discover your value proposition and engage with your offerings. Considerations such as where your customers are located, their media consumption habits, and their online presence are essential in channel selection. For instance, channels could include social media platforms, email marketing, networking events, or traditional advertising mediums like billboards and radio. By understanding how to effectively reach your target audience, businesses can maximize their visibility and engagement, ultimately driving growth and success.

7) Key Resources Business Model Canvas

Key resources encompass the assets necessary to create value for customers, ranging from intellectual property to physical infrastructure and human capital. For instance, Zara, a renowned fashion retailer, relies on several key resources to deliver its value propositions effectively. These include robust stock management systems, an extensive network of physical stores, a strong brand presence, and efficient logistics and supply chain infrastructure. Stock availability is crucial for customer satisfaction, and Zara’s distribution network and brand reputation help ensure timely delivery and meet customer demands. Additionally, investing in technology and skilled staff is vital for managing inventory, production processes, and product delivery efficiently.

8) Customer Relationship in Business Model Canvas

Understanding the nature of your relationship with customers is vital for shaping your business operations effectively. Customer relationships encompass various modes of interaction, from in-person meetings to online engagement. For instance, your business might engage in one-to-one interactions, utilize third-party contractors, or leverage online platforms for customer communication. Creating a User Journey Map can provide valuable insights into these interactions, highlighting touchpoints and opportunities for automation. By delineating the customer relationship landscape, businesses can refine their operations and enhance customer experiences accordingly.

9) Cost Structure in Business Model Canvas

The cost structure in BMC of a company encompasses its expenditure on operations and reflects its strategic approach towards costs. A cost-driven company prioritizes minimizing costs to offer competitive prices to customers, as seen in fast-fashion retailers like Forever 21. Conversely, value-driven companies like Gucci emphasize creating value through high-quality products and premium experiences. Understanding key costs, cost drivers, and the relationship between activities, resources, and revenue streams is crucial for optimizing cost structures. Companies also need to assess the balance between fixed and variable costs, leverage economies of scale, and determine whether they prioritize cost optimization or delivering value to customers. Explore resources like CFI’s Budgeting and Forecasting course for insights into effectively managing future cash flows and expenses.

Benefits of a Business Model Canvas

The adoption of the Business Model Canvas offers a myriad of benefits that can catalyze strategic clarity, foster innovation, and drive organizational success.

Strengthens Focus on Value Proposition, Visual Representation, and Clarity

The BMC enables businesses to distill complex business strategies into a visually intuitive format, fostering clarity and alignment across stakeholders. By focusing on the core value proposition and key components of the business model, organizations can streamline decision-making and drive strategic focus.

Speed and Agility

The BMC’s iterative and adaptable nature empowers businesses to experiment, iterate, and pivot with agility, enabling rapid response to market dynamics and emerging opportunities.

Facilitates Collaboration

The BMC serves as a common language for cross-functional collaboration, allowing teams to align on strategic objectives, identify synergies, and co-create innovative solutions. By fostering a collaborative mindset and breaking down silos, organizations can harness the collective intelligence of their teams to drive value creation.

Strategic Decision-Making

By providing a holistic view of the business model, the BMC empowers decision-makers to make informed and data-driven strategic choices. Whether evaluating new market opportunities, assessing competitive threats, or allocating resources, the BMC serves as a strategic compass for guiding decision-making.

Identifying and Evaluating Key Components

The structured framework of the BMC facilitates systematic analysis and evaluation of key components, enabling businesses to identify strengths, weaknesses, opportunities, and threats. By gaining deeper insights into customer segments, value propositions, and revenue streams, organizations can refine their strategies and enhance competitive advantage.

Adaptability and Iteration

The BMC’s iterative approach encourages continuous learning and adaptation, allowing businesses to evolve and innovate in response to changing market dynamics and customer preferences. By embracing experimentation and feedback loops, organizations can stay ahead of the curve and seize new opportunities for growth and differentiation.

Action-Oriented Approach and Common Language

Unlike traditional business planning approaches, which often result in lengthy and static documents, the BMC fosters an action-oriented mindset and a shared understanding of the business model. By distilling complex concepts into a concise and actionable format, the BMC empowers teams to translate strategy into execution with clarity and purpose.

However, where the Business Model Canvas falls short is in providing guidance on how to implement a business model effectively. This is where the Operating Model Canvas steps in. Fortunately, these two models complement each other seamlessly. The Operating Model Canvas expands upon the Value Creation aspects of the Business Model Canvas, primarily focusing on operational details. So, when it comes to putting your Business Model into action, you can replace the more abstract Value Creation aspects with the detailed elements outlined in the Operating Model Canvas. This integration strengthens the link between strategic planning and operational execution, ensuring a holistic approach to business development.

The Operating Model Canvas is utilized similarly to other canvases, such as the Business Model Canvas. Teams gather around a flip chart or whiteboard, outlining the canvas’s areas and filling them with Post-it notes discussing critical aspects and their interconnections. Starting with the core Value Delivery Chain(s) and addressing major challenges next is often helpful. The strength of the Operating Model Canvas lies in its brevity, focusing on key elements and fostering high-level alignment to execute strategies effectively. It prompts consideration of various scaling alternatives, such as outsourcing versus in-house operations. While it can be expanded into a more detailed document, keeping it concise initially is crucial to establish a foundational understanding of execution strategies.

Download the Complete eXtended Business Model Canvas Package, including instructions for putting it to work for you today.

The eXtended Business Model Canvas goes beyond the core Business Model Canvas by providing a broader perspective on an organization’s operations and context. It contextualizes the business model by examining underlying drivers, customer needs, team dynamics, and the organization’s values and culture. This holistic approach helps businesses better understand their “why” and overarching objectives, represented by the Business Intention & Objectives and Massive Transformative Purpose (MTP), Understanding customers’ needs and considering the team’s composition, structure, values, and culture.

• Business Intention & Objectives: Start by defining the ultimate goals and aspirations of your business, linking your Business Model to its overarching purpose and intention.
• Massive Transformative Purpose (MTP): Recognize the power of a deeply unifying purpose, known as a Massive Transformative Purpose, to drive exponential growth and success.
• Solution/Market Fit: Focus on understanding your customers’ needs and improving Solution/Market Fit to drive growth, emphasizing an outside-in perspective and avoiding assumptions.
• Jobs to be Done : Identify the functional and emotional jobs your customers need fulfilling, providing insights into their core motivations and needs.
• Customer Segments: Define the target segments and create representative personas based on data-driven insights to understand who your most important customers are.
• People & Structure: Success hinges on assembling the right team and maintaining an adaptable organizational structure to navigate change effectively.
• Values & Culture: Uphold core values and cultivate a strong organizational culture to support differentiation and long-term sustainability.
• Unfair Advantage: Identify unique assets and capabilities that set your business apart and cannot be easily replicated, contributing to a sustainable competitive advantage in the market.

By addressing these drivers, businesses can gain deeper insights into their purpose, customer needs, team dynamics, and competitive advantages, ultimately guiding the development of a robust and successful business model.

Once you’ve delved into the key components of the eXtended Business Model, it’s essential to focus on exploring the Value Model in greater depth. This model serves as the core of your Business Model, encapsulating your primary Value Proposition(s) and associated offerings within the overall Product System. Utilizing tools like the Value Proposition Canvas allows for the logical development and testing of products or services. Notably, this canvas facilitates the management of existing Value Propositions while also fostering the creation of new ones. Its strength lies in its ability to foster empathy with customers, enabling the translation of their needs into innovative solutions that address significant yet unmet Jobs to be Done.

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Value Creation: Business Model Canvas Explained

The Business Model Canvas is a strategic management and entrepreneurial tool that allows businesses to describe, design, challenge, invent, and pivot their business model. The Value Creation component of the Business Model Canvas is a crucial aspect that focuses on the value proposition of a business, which is the unique combination of products or services that a business offers to its customers.

Understanding the concept of Value Creation in the context of the Business Model Canvas is essential for any business, as it directly impacts the company's ability to generate revenue and innovate. This article will delve into the intricacies of Value Creation, its significance, and how it interacts with other components of the Business Model Canvas.

Understanding Value Creation

Value Creation is the process of providing a product or service that customers find valuable. It is the primary reason why customers choose one company's offering over another. The value can be tangible, such as a physical product, or intangible, such as a unique experience or exceptional customer service.

Value Creation is not just about creating a product or service; it's about creating something that solves a problem or fulfills a need for the customer. It's about understanding what the customer values and delivering it in a way that is unique to your business.

Components of Value Creation

Value Creation is composed of several components, each contributing to the overall value proposition of a business. These components include the product or service itself, the customer relationship, and the channels through which the product or service is delivered.

The product or service is the core of Value Creation. It is what the customer directly interacts with and derives value from. The customer relationship refers to the interactions between the business and the customer, which can significantly influence the perceived value of the product or service. The channels refer to the means through which the product or service is delivered to the customer. The choice of channels can impact the accessibility and convenience of the product or service, thereby affecting its value.

Significance of Value Creation

Value Creation is significant because it directly influences a company's ability to generate revenue. If a company can create a product or service that customers find valuable, they will be willing to pay for it. Therefore, Value Creation is directly linked to revenue growth.

Moreover, Value Creation is also linked to innovation. By continuously seeking ways to create more value for customers, companies can drive innovation. This can lead to the development of new products or services, or improvements to existing ones, thereby ensuring the company's long-term success.

Value Creation in the Business Model Canvas

In the Business Model Canvas, Value Creation is represented by the ' Value Proposition' building block . This block describes the unique value that a company offers to its customers. It is the reason why customers turn to one company over another.

The Value Proposition is not just about the product or service; it's about the entire customer experience. It includes everything from the product features to customer service, from the brand image to the delivery process. It's about how the company creates value for its customers.

Interactions with Other Components

The Value Proposition interacts with all other components of the Business Model Canvas. It is influenced by the 'Customer Segments' block, as different customer groups may value different things. It is delivered through the 'Channels' block and is supported by the 'Customer Relationships' block.

The Value Proposition also impacts the 'Revenue Streams' block, as the value that a company creates for its customers determines how much they are willing to pay. It is made possible by the 'Key Resources', 'Key Activities', and 'Key Partnerships' blocks, which provide the necessary resources and activities to create value. Finally, the Value Proposition influences the 'Cost Structure' block, as the cost of creating value can impact the profitability of the business.

Developing a Strong Value Proposition

Developing a strong Value Proposition is crucial for any business. It starts with understanding the customer. Businesses need to understand what their customers value, what their needs and wants are, and how their product or service can meet these needs and wants.

Once the customer's values are understood, businesses can then focus on how to deliver this value in a unique way. This could involve developing unique product features, offering exceptional customer service, or delivering the product or service through convenient channels. The key is to differentiate the business from its competitors by offering something that they cannot.

Value Creation, Revenue Growth, and Innovation

Value Creation is directly linked to revenue growth and innovation. By creating value for customers, businesses can generate revenue. The more value a business can create, the more revenue it can generate. Therefore, businesses should always be seeking ways to create more value for their customers.

Value Creation also drives innovation. By continuously seeking ways to create more value, businesses can come up with new ideas for products or services, or improvements to existing ones. This can help the business stay competitive and ensure its long-term success.

Role of Value Creation in Revenue Growth

Value Creation plays a crucial role in revenue growth. The value that a business creates for its customers determines how much they are willing to pay for its product or service. Therefore, by creating more value, a business can increase its revenue.

However, it's important to note that creating more value doesn't necessarily mean adding more features to a product or offering more services. Sometimes, creating more value can be as simple as improving the customer service or making the product easier to use. The key is to understand what the customer values and find ways to deliver it.

Role of Value Creation in Innovation

Value Creation also plays a crucial role in innovation. By continuously seeking ways to create more value, businesses can come up with new ideas for products or services, or improvements to existing ones. This can help the business stay competitive and ensure its long-term success.

Moreover, innovation can also lead to more Value Creation. By innovating, businesses can create new value for their customers, which can lead to increased revenue. Therefore, Value Creation and innovation are closely linked, with each driving the other.

Value Creation is a crucial component of the Business Model Canvas. It is the process of providing a product or service that customers find valuable. It is the primary reason why customers choose one company's offering over another. Understanding the concept of Value Creation and how it interacts with other components of the Business Model Canvas is essential for any business.

Value Creation is directly linked to revenue growth and innovation. By creating value for customers, businesses can generate revenue. By continuously seeking ways to create more value, businesses can drive innovation. Therefore, businesses should always be seeking ways to create more value for their customers.

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Decoding the Adidas Business Model Canvas

May 24, 2023

This article will delve into the details of this dynamic framework to help you better understand how Adidas operates and maintains its position as a leading sportswear brand.

Join us in our exploration of the Adidas Business Model Canvas, and learn how this iconic brand has managed to establish a unique niche in today's competitive business environment. If you want to know more about different business model, here you can read more about L'oreal!

Decoding Adidas Business Model Canvas

Key Partners

‍ Adidas relies on a network of key partners to support its operations and bring its products to market. Raw material suppliers provide the cotton, leather, and other materials used to make Adidas products, while manufacturing partners produce the products themselves.

Logistics and transportation partners ensure that products are shipped to retail partners and customers efficiently and effectively. Retail partners, such as sporting goods stores and online retailers, are essential to Adidas' sales strategy and help to expand the company's reach and customer base.

Key Activities

‍ Adidas' key activities include

• designing and developing new products and technologies,
• sourcing and selecting raw materials and manufacturing partners,
• producing and manufacturing Adidas products,
• marketing and advertising to promote Adidas products,
• selling products through retail partners and direct-to-consumer channels,
• and building and maintaining relationships with key partners and stakeholders.

Key Resources

‍ Adidas' key resources include

• its innovative designs and technologies,
• skilled employees in various departments such as design, marketing, and supply chain management, manufacturing facilities and equipment,
• distribution and logistics networks,
• strong brand reputation and customer loyalty,
• and financial resources for investments and acquisitions.

Value Proposition

‍ Adidas' value proposition is centered around high-quality and innovative products for sports and fashion. The company's strong brand reputation and recognition also help to differentiate its products from competitors.

Adidas offers a diverse range of product offerings for different sports and activities, and has made sustainability and eco-friendliness a key aspect of its business model, using recycled materials in product manufacturing.

Customer Segments

‍ Adidas targets several different customer segments, including athletes and sports enthusiasts, fashion-conscious individuals, kids and youth, and professional sports teams and organizations.

Customer Relationships

‍ Adidas prioritizes providing high-quality products and customer service to build strong customer relationships. The company engages with customers through social media and other marketing channels, offering personalized product recommendations and promotions, and supporting customers with returns and exchanges.

Adidas uses several different channels to reach customers, including retail partners such as sporting goods stores and online retailers, direct-to-consumer channels such as the Adidas website and mobile app, and social media and digital marketing channels.

Revenue Streams

‍ Adidas' revenue streams come primarily from sales revenue generated by its products. The company also earns licensing fees from collaborations and partnerships, and sponsorship revenue from professional sports teams and organizations.

Cost Structure

‍ Adidas' cost structure includes raw material costs for product manufacturing, manufacturing and production costs such as labor and equipment, marketing and advertising costs, distribution and logistics costs, and research and development costs for new products and technologies.

Adidas Company Overview

Adidas is a multinational corporation specializing in designing, manufacturing, and marketing athletic and leisure footwear, apparel, and accessories. Founded in Germany in 1949, Adidas has become a global powerhouse, with annual revenues worth billions of dollars.

History of Adidas

The story of Adidas began with its founder, Adolf "Adi" Dassler, who started crafting sports shoes in his mother's laundry room after serving in World War I.

With a genuine passion for sports and a keen eye for quality, Adi quickly gained recognition for his innovative and durable footwear creations. In 1949, he officially registered the Adidas brand and trademarked its distinctive three-stripe logo.

Adi's dedication to quality and innovation helped Adidas to become one of the most recognizable sportswear brands in the world. He was the first to introduce screw-in studs in football boots, which revolutionized the sport and helped Germany win the 1954 FIFA World Cup.

The company continued to innovate, introducing the first track shoes with spikes and the first shoes made from kangaroo leather.

Adidas' commitment to innovation has continued into the modern era, with the company investing heavily in research and development to create cutting-edge products that help athletes perform at their best.

Adidas' Global Presence and Market Share

Today, Adidas operates in over 100 countries and employs more than 60,000 people, with its products available in thousands of locations worldwide. Its global market share has been steadily growing, with the company considered a major player in the sportswear industry alongside other leading brands such as Nike and Puma.

Adidas' success can be attributed not only to its innovative product offerings but also to its strong brand identity, strategic partnerships, and commitment to sustainability and social responsibility.

The company has made significant strides in reducing its environmental impact, with initiatives such as using recycled materials and reducing water usage in production.

Adidas has also been a leader in promoting diversity and inclusion, with initiatives such as its "Creating Lasting Change" program, which aims to increase representation of underrepresented communities in the company's workforce and leadership positions.

Overall, Adidas has established itself as a global leader in the sportswear industry, with a rich history of innovation, a strong brand identity, and a commitment to sustainability and social responsibility.

Understanding the Business Model Canvas Framework

The Business Model Canvas is a widely used tool for mapping out the core elements of a business, presenting them in an easily digestible visual format.

Developed by Alexander Osterwalder, this framework allows companies to design, analyze, and adapt their strategies for better performance, guiding them through key components such as customer segments, channels, and revenue streams.

Adopting the Business Model Canvas as a strategic tool enables companies to identify potential gaps, weaknesses, or opportunities in their current models, facilitating informed decision-making and alignment of resources towards achieving their goals.

In the case of Adidas, the framework provides a comprehensive understanding of how the company creates, delivers, and captures value.

When it comes to strategic planning, the Business Model Canvas is an essential tool that can help businesses to gain a deeper understanding of their operations and identify areas for improvement or growth.

By analyzing the nine building blocks that make up the canvas, companies can develop a more detailed understanding of their target market, clarify their value proposition, and even spark innovative ideas for new products or services.

Key Components of the Business Model Canvas

The nine building blocks that make up the Business Model Canvas are:

• Customer Segments: This component refers to the different groups of customers that a business serves. It is essential to identify and understand the needs and wants of each customer segment to develop products or services that meet their specific requirements.
• Value Propositions: This component refers to the unique value that a business offers to its customers. It is essential to develop a compelling value proposition that differentiates the business from its competitors and meets the needs of its target market.
• Channels: This component refers to the different channels that a business uses to reach its customers. It is essential to identify the most effective channels for each customer segment and develop a strategy for delivering products or services through these channels.
• Customer Relationships: This component refers to the different types of relationships that a business has with its customers. It is essential to develop a strategy for building and maintaining strong relationships with customers to ensure their loyalty and satisfaction.
• Revenue Streams: This component refers to the different sources of revenue that a business generates. It is essential to identify and develop new revenue streams to ensure the long-term sustainability of the business.
• Key Resources: This component refers to the resources that a business needs to deliver its value proposition. It is essential to identify and allocate resources effectively to ensure the efficient operation of the business.
• Key Activities: This component refers to the key activities that a business needs to perform to deliver its value proposition. It is essential to identify and prioritize these activities to ensure the efficient operation of the business.
• Key Partnerships: This component refers to the key partnerships that a business needs to develop to deliver its value proposition. It is essential to identify and develop strong partnerships with suppliers, distributors, and other stakeholders to ensure the success of the business.
• Cost Structure: This component refers to the different costs that a business incurs to deliver its value proposition. It is essential to identify and manage these costs effectively to ensure the profitability of the business.

Importance of the Business Model Canvas in Strategic Planning

Utilizing the Business Model Canvas in strategic planning helps organizations clarify their value proposition, develop a more detailed understanding of their target market, and even spark innovative ideas for new products or services.

By providing a visual representation of the core elements of a business, this framework facilitates collaboration, communication, and understanding, making it an invaluable tool for strategic planning and decision-making.

Furthermore, the Business Model Canvas can help businesses to identify potential gaps, weaknesses, or opportunities in their current models, facilitating informed decision-making and alignment of resources towards achieving their goals.

By analyzing the nine building blocks that make up the canvas, companies can gain a deeper understanding of their operations and identify areas for improvement or growth.

In conclusion, the Business Model Canvas is a powerful tool that can help businesses to develop and refine their strategies, identify opportunities for growth, and achieve long-term success. By adopting this framework, companies can gain a competitive advantage in today's rapidly changing business landscape.

Are you in search of additional wisdom and knowledge?

don't miss out on these valuable articles about business models:

• supliful.com/blog/h-m-business-model-canvas-explained
• supliful.com/blog/mcdonalds-business-model-canvas
• supliful.com/blog/aldis-business-model-and-working-culture

By delving into these posts, you'll gain a deeper perspective on different business models Canvas, enabling you to enhance your skills.

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In the ever-changing world of innovation, a well-defined roadmap is essential to steer a startup towards financial sustainability. The Lean Canvas model does just that – it is a valuable one-page template for brainstorming early-stage business models.

It’s designed to be an ever-evolving blueprint that assists entrepreneurs in validating their ideas, mitigating risks, and iterating their business models. Its approach calls for concise content, making it a practical framework to outline your business concept. And most importantly, it enables you to align strategies with market demands.

Below we take a look at how to complete the Lean Canvas tool.

How To Use the Lean Canvas Template for Business Model Development

As mentioned above, the Lean Canvas is a strategic management tool that helps startups and entrepreneurs develop a concise and actionable business plan. It is divided into several blocks, each focusing on crucial aspects of a business model.

Let’s take a look at each block:

Identifies the top 3 problems and pain points that your target audience experience. The end goal is to understand their problems better and identify how your solution solves their problems / and alleviates the pain.

Clearly outline your business solution and/or product offering that solves the problems your customers are experiencing. Describes how your solution effectively meets the market’s demands.

Learn More: Lean Canvas Model: Crafting Solutions and Prioritizing Features

Key Metrics

Determines the key performance indicators to help you measure your business’s performance and progress. These metrics inform your business development.

Unique Value Proposition (UVP)

Define what sets your business apart from competitors and why potential customers will choose your product or service.

Read More: What Is Unfair Advantage in Lean Canvas?

Highlights the channels you intend to reach and engage your customers. This may include online platforms, partnerships, or direct sales channels.

Customer Segments

Specifies the different market segments you plan to target. This block helps you understand your primary audience, which is critical for tailoring your offering. Learn how ‘ customer segment s’ can impact your business success and optimize your strategy accordingly.

Cost Structure

This breaks down the expenses involved in operating your business. This includes production costs, marketing expenses, and other relevant financials.

Read More: The Cost Structure Lean Canvas

Revenue Streams

Outline the sources of revenue for your business . This may include sales, subscriptions, licensing fees, or any other means through which your business generates income.

What are the benefits of using the Lean Canvas?

Ash Maurya pioneered the Lean Canvas model as an invaluable tool for startups using the Lean Startup methodology. By filling out the one-page lean canvas, you can clearly define your business model and identify any weaknesses or gaps in your strategy.

Read More: Startup Project Management: The Key to Success

The main benefit of the lean canvas is that it forces you to synthesize your business idea down to its core components. This includes identifying your target customers, the problem you are solving for them, your unique value proposition, the channels you will use to reach customers, and your revenue streams. Going through this exercise early on ensures your entire team has alignment on the fundamentals of your business.

Another advantage is that the lean canvas lends itself well to experimentation and iteration. As you test parts of your business model and gain new customer insights, you can quickly update your canvas to reflect pivot decisions. This builds momentum by keeping your team focused on the right metrics and priorities.

Tools to create a Lean Startup model

The advice has been, traditionally, to print out a lean canvas and post it somewhere to fill with sticky notes. This can often be challenging as teams are frequently remote and may need access to the information outside the office because the lean canvas should be tracked alongside progress.

Tools to create a Lean canvas online include project management tools like Leantime and tools like Leanstack.

Leantime Features Include

• Task Management
• Idea Management
• Goals Tracking
• SWOT Analysis, Empathy Maps, Project Briefs
• Time tracking
• AI Task Prioritization
• Strategy Management
• Program Plan management
• And much more

Being able to map out your initial business model and then immediately connect it to a growing business is a unique value proposition of using a tool like Leantime. It’s an ideal companion to both growing and developing your business ideas simultaneously. Quickly see the progress and keep the growth on track with our features .

In Summary – Optimize Business Development with the Lean Canvas

Overall, the lean canvas model perfectly complements the Lean Startup approach. Enabling fast learning and adaptation increases your chances of finding product-market fit and launching a sustainable, scalable business.

Completing the Lean Canvas template helps create a comprehensive understanding of your business model and guides strategic decision-making. Regularly revisiting and revising (also known as iterating), the canvas keeps your business strategies aligned with market dynamics and ensures that you’re on the path to scale and grow.

Using the Lean Canvas framework is a proactive way to advance your business model, sets the stage for informed decision-making, and helps define an adaptable business model that stands the test of time.

Explore More About Lean Startup Philosophy — we’re passionate about helping you navigate the world of entrepreneurship and innovation through the lens of the Lean Startup methodology.

Frequently Asked Questions

The 9 sections are Customer Segments, Problem, Unique Value Proposition, Solution, Channels, Revenue Streams, Cost Structure, Key Metrics, and Unfair Advantage.

It’s best to complete your initial lean canvas during customer discovery and before building your minimum viable product (MVP). Revisit and iterate on it throughout product development.

The goal is to summarize your business model at a high level on one page. Capture the essential elements without going into too much depth.

The lean canvas is meant to complement a business plan, not serve as a comprehensive plan itself. Use it to align your team and identify gaps before creating your full plan.

Yes, the canvas should evolve as you learn from experiments and make pivots. Review and update it frequently to stay on track.

Here are some other links you may be interested in…

• Lean Business Solutions
• Understanding the Lean Canvas: The Blueprint of Modern Lean Innovation
• Creating a successful startup: Business development tools to prevent failure
• Crafting Solutions and Prioritizing Features with the Lean Canvas Model for Effective Business Development
• Communicating Business Development with the Lean Canvas

Jenny Jackson

Jenny Jackson, a seasoned Entrepreneur-in-Residence (EIR), brings a wealth of expertise in innovation process, design thinking, and research & development. Since 2019, she has demonstrated her commitment to fostering business growth as a dedicated Business Mentor for Charlotte Launch (formerly Ventureprise Launch) and as a leader guiding two research teams in the prestigious National Science Foundation’s (NSF) iCorps program.Jenny's journey in entrepreneurship and innovation has been marked by a series of impactful roles. Prior to joining the dynamic team at the Center for Entrepreneurship and Innovation at UNC Charlotte, she provided invaluable support to startups, labs, and incubators, showcasing her dedication to fostering emerging ventures.Jenny holds a Master's in Organization Development from Queens University of Charlotte and a Bachelor’s in Industrial Technology with a concentration in Graphic Communications from North Carolina A&T State University.Beyond her professional achievements, Jenny is an advocate for children's rights and autism acceptance, reflecting her dedication to making a positive impact in the world. She is also a member of Delta Sigma Theta Sorority, Inc. she continues to champion causes that align with her values.#InnovationExpert #DesignThinking #StartupMentor #BusinessGrowth #ResearchandDevelopment

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Lean Canvas (2024): How-to & Examples [+ Template]

Home » Lean Canvas   | 🕑 

Gust de Backer

November 7, 2023.

The Lean Canvas is practical and focused on validating an idea, it ensures that you are not going to bring a service or product to market that no one is waiting for.

Do you want to bring your product or service to market more effectively?

I’m going to explain to you:

• What the Lean Canvas is
• Which components the Lean Canvas contains
• And how to fill out the Lean Canvas

Let’s get started…

Table of Contents

What is a Lean Canvas

The Lean Canvas originally comes from the Business Model Canvas , but is more problem and solution oriented :

This difference allows the Lean Canvas to be better used to validate a product or service.

The differences are:

Don’t feel like reading this blog? Check out this video:

Why use the Lean Canvas?

There are several reasons why you might want to use the Lean Canvas:

• It focuses on understanding the problem you are trying to solve, this allows you to better understand the customer.
• It includes a research-based approach , as it focuses on validating your assumptions.
• Contains key metrics to check that you are sailing the right course.
• You stay lean , because you focus on speed and traction of your idea.
• Faster time-to-market because the idea-to-product transition is smoother.
• The Lean Canvas also focuses on capturing a unique place in the market .

1. Customer Segments.

Not everyone needs your product, it is important to be as specific as possible in choosing your customer segment.

Without a clear customer segment it is also not possible to properly empathize with the customer segment’s problems.

Tip : check out the TAM SAM SOM article.

Early Adopters

The ‘Customer Segments’ section also contains a piece with the Early Adopters, or your most potential customers…

These are the people you are going to approach first to validate your assumptions.

Without a problem worth solving, you have no product or service. For each key customer segment, come up with one to three high priority problems.

Existing Alternatives

The ‘Problem’ section also contains a section with existing alternatives, this is meant to write down your competitors that solve the same problem.

Note, this does not necessarily mean your direct competitors, but really companies that focus on the same problem.

3. Unique Value Proposition

The Unique Value Proposition is your promise of the value you will deliver…

It is the main reason why a customer should buy from you. It also shows where you stand out and why a customer segment should invest time or money in you.

Tip : check out the Value Proposition Canvas .

High-Level Concept

In the High-Level Concept section, there is space to write down briefly and clearly what your product or service represents. This is how your team or customers name your company to their friends, for example as “The Uber for boats”.

4. Solution

You will not find the solution to your problem in your first attempt. The solution is also not in your office, you will find it with the customer. Get Out Of The Building , or in other words, engage with the customer and validate different solutions.

While creating the solution, don’t forget to use the Build – Measure – Learn cycle.

5. Channels

How will you reach your customer segment? In the beginning, it’s not important to look at scalability, but at gathering insights.

Think about what channels you can use to access your customer segment, see where your customers are and try to reach them there.

It is not necessary to be on location with the customer, a solution can also be validated with an MVP, for example. A good example of this is Zappos, a simple website with some shoes that people could order online.

Tip : check out Testing Business Ideas .

6. Revenue Streams

Revenue Streams depend on the revenue model and pricing strategy you choose.

For startups it is normal to lower the price or even offer certain things for free to get traction. Important here is to ensure that you can validate demand for your product or service, it is not very difficult to get people to sign up or do something if it is free.

7. Cost Structure

Write down how much it costs to keep your business running, what is your burn rate, how much does it cost monthly to run your business, how much does it cost to interview customer segments, how much does market research cost, etc.

Try to calculate a break-even point in doing so.

8. Key Metrics

Every business has certain metrics that provide insight into how it is performing. A good way to map the health of your business is the Pirate Funnel Canvas .

It is not always about the part that goes towards the customer, because if you depend on staff, for example NPS can also be a very important metric for your business.

Tip : also check out the Growth Flywheel / Growth Formula .

9. Unfair Advantage

The Unfair Advantage is about a specific part of your company, product or service that your competitors can’t just get or copy.

This could be exclusive access to data, a community, authority, experience or perhaps a particular feature.

How do you complete the Lean Canvas?

First, download the Lean Canvas:

Good choice! Check your e-mail for the resources...

Make sure you have a team with whom you can start completing and validating the Lean Canvas. Optionally, you can do this alone, but it is interesting to be able to discuss findings with someone.

Starting with the problem, make sure you find the problem and validate that the customer segment: – Is bothered by the problem – Is actively looking for a solution or has even already realized a self-created solution – Would possibly be willing to pay money to solve the problem

Create different solutions in perhaps different iterations and test them with the customer segment to validate whether the solution actually solves the problem found.

Start by filling in the canvas with assumptions and as you go, make sure to refill the canvas with validated assumptions.

Once you have a validated Lean Canvas, you can start to professionalize your business and optimize the canvas to, for example, create a scalable sales funnel, be more profitable, or approach a larger customer segment.

Lean Canvas example

Watch the video at the top of this article for a clear example. Here is a visual example from Uber:

Now it’s your turn…

I’m curious… How far along are you with your business or startup and what are you still running into?

Let me know in a comment!

P.S. would you like some extra help? Let me know at [email protected]

Frequently Asked Questions

The Lean Canvas allows you to put your entire concept on 1 a4 sheet to validate your assumptions. It is similar to the Business Model Canvas, but is more problem and solution oriented.

The Lean Canvas gets you to focus more on your customer segment’s problem and to use a research-based method to validate your product or service, allowing you to get a faster time to market.

The Lean Canvas is ideally used to validate a new product, idea or service and research it with a problem-solving mindset.

The components in the Lean Canvas are: 1. Customer Segments 2. Problem 3. Unique Value Proposition 4. Solution 5. Revenue Streams 6. Key Metrics 7. Channels 8. Cost Structure 9. Unfair Advantage

The Business Model Canvas is a strategic tool to identify the strengths and weaknesses of a company and is primarily aimed at existing companies that are focused on expanding their business. The Lean Canvas is a problem-solution approach to approaching a market focuses primarily on startups that focus on serving a customer segment and gaining an unfair advantage.

I try to help business surpass their growth ceiling with my content.

Sounds interesting?

Let’s connect on LinkedIn!

Business Model Canvas | Business Strategy | Lean Canvas | Marketing and Sales | Pricing Strategy | Problem-solution Fit | Product-market Fit | Revenue Models | TAM SAM SOM Model | Treacy and Wiersema | Value Proposition Canvas

Gust’s Must-Reads 👇🏼

• TAM SAM SOM
• Value Proposition
• Brainstorming
• Decision Making Unit
• Product-Market Fit
• North Star Metric
• Market Research
• Customer Development
• Growth Hacking
• Brand Identity
• Customer Journey
• Account-Based Marketing

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diagram of customer segment

Hi Obumu, could you maybe further elaborate on that?

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