In the previous article, we learned what the Canvas Business Model is, Johnson's Blog help you continue to learn how to apply in practice as well as how to test, value proposition, .. in the article. Canvas Business Model (part 2) what is the following.
Testing a Business Model
Testing is usually done at the end of the product development process when it is too late to make major modifications or change the roadmap.
Below outlines some testing techniques that we can apply during our business idea design and search phase. These techniques allow us to generate market data quickly and cheaply while we are still figuring out how to understand our customers, design our value proposition, and our business model.
As mentioned earlier, testing goes beyond interviewing or observing the market and getting potential customers to take some action that definitely proves their interest.
This type of testing can be applied as soon as we have an idea. The facts we collect in this process will continuously inform our search for a great Business Model and Value Proposition.
We define three test techniques:
- Test Interest and Relevance
- Test Willingness and Affordability
- Test Interests and Preferences
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Test Interest and Relevance
What do we measure:
Has the potential customer shown an interest in our idea? Do our ideas work for them? Are they interested enough to take an action?
We can start testing the interest and relevance of our idea to the client before we even think of a specific value proposition. By testing the Work, Pain, and Benefit, we can find out if the customer is interested in the problem we intend to solve.
The following techniques allow us to start testing customer interest:
- Tracking “Fake” Ads / Ads
- Landing Pages
Test Willingness and Affordability
What do we measure:
Is the prospect interested enough in our Value Proposition features to buy? Will they cash in right away?
It is not enough to validate customer concerns and gather facts that demonstrate that we are addressing their issues. We also want to demonstrate that they are willing to pay us to solve those problems.
The following techniques allow us to begin testing a customer's willingness to pay:
- "Fake" Sales
- Pre-Sales
- Minimum Viable Product
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Test Interests and Preferences
What do we measure:
What features do potential customers like in our Value Proposition? What do they really value? What do they prioritize?
When we are designing a Value Proposition, we will often be faced with the question of which issue is more relevant to the customer or which feature they value more highly. Giving facts about customer preferences and priorities is a much better design approach than prioritizing based solely on our assumptions.
The techniques outlined in this section also allow us to learn more about our customers' acceptance of replacement prices.
The following techniques allow us to start testing customer preferences:
- Split Testing
- Game Innovation®
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Design the Value Proposition to deliver to the customer
Complete the following passage:
(Products and services – list specific products and services) our help (Customer Segment – list specific customer segments) would like (Client's work completed – list Customer Segment jobs) by (reduce or avoid the risk, overcome the Pain) and (gain, activate, gain the Benefit).
Completing the above paragraph will help us build a complete business model that caters to each customer segment.
What is the Client's job?
Work describes what the client is trying to accomplish at work or in their life. The customer's work can be the tasks they are trying to accomplish and accomplish, the problems they are trying to solve, or the needs they are trying to satisfy.
Distinguish three types of work as follows:
Job Function
When our customers are trying to perform or complete a specific task or solve a particular problem, such as mowing the lawn, eating healthy as a consumer, writing a report or assisting help the client as an expert.
Social work
When our clients want to look good or gain power or status. These jobs describe how the client wants to be seen by others, for example, to look trendy as a consumer or to be seen as competent as an expert.
Personal/emotional work
When our clients seek a specific emotional state, such as feeling good or safe, such as seeking reassurance about one's investments as a consumer or achieve a sense of job security in their workplace.
Answer these 9 triggering questions to uncover your client's potential jobs (sometimes the client doesn't even know it):
- What can't our customers live without accomplishing? What platform can help our customers achieve this important work?
- What are the different contexts our customers might be in? How do their activities and goals change depending on these different contexts?
- What do our customers need to accomplish in relation to interacting with others?
- What tasks are our clients trying to accomplish in their work or personal lives? What functional problems are our customers trying to solve?
- Are there problems we think customers have that they may not be aware of?
- What emotional needs are our customers trying to satisfy? What tasks, if completed, will give the user a sense of self-satisfaction?
- How do our customers want to be seen by others? What can our customers do to help them be seen this way?
- How do our customers want to feel? What do our customers need to do to feel that way?
- Track a customer's interaction with a product or service over its lifetime. What support jobs emerge during this life cycle? Does the user switch roles during this process?
Note: sort the Tasks by importance and clearly specify the Tasks
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What is Customer Pain?
Pain is what annoys our clients while trying to get things done or simply prevents them from getting things done. Pain is also the risks, the potential bad outcomes, associated with doing a job badly or not being able to get it done.
Distinguish the following 3 types of Pain:
Undesirable results, problems and characteristics
Pain is related to Function (e.g. a solution that doesn't work, doesn't work well, or has negative side effects), Social (“I look terrible doing this”), Emotional ( “I feel bad every time I do this”), or Support (“It’s annoying to go to the store because of this”).
This can also be related to undesirable characteristics that the client does not like (e.g. “Running at the gym is boring” or “This design is bad”)
Trouble
These are the things that keep the client from even getting the job started or slow them down (e.g. “I lack the time to get this job done correctly” or e.g. “I can't afford to” for any of the existing solutions”).
Risk (potentially undesirable outcome)
What mistakes can go wrong and have serious negative consequences (e.g. “I could lose credibility using this type of solution” or e.g. “A security breach would be catastrophic” for us”).
Use the following nine trigger questions to help us think about different potential customer pain points:
- How do our customers define too expensive? Does it take a lot of time, costs too much money, or requires significant efforts?
- What makes our customers feel bad? What makes them frustrated, annoyed or what gives them headaches?
- How are the current value propositions performing for our customers? What features are they missing? Are there any performance issues bothering them or the glitch they cite?
- What are the main difficulties and challenges our customers face? Do they understand how things work, have trouble getting certain things done, or oppose work for specific reasons?
- What negative social consequences do our customers experience or fear? Are they afraid of losing face, power, trust, or status?
- What risks scare our customers? Are they afraid of financial, social or technical risks or are they asking themselves what could go wrong?
- What keeps our customers awake at night? What are their big problems, concerns and worries?
- What mistakes do our customers often make? Are they using a solution the wrong way?
- What barriers are keeping our customers from accepting a value proposition? Are there upfront investment costs, learning difficulties or other obstacles preventing adoption?
Note: sort Pains by severity and clearly specify Pains
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What are Customer Benefits?
Benefits describe the results and profits that our customers want. Some benefits are demanded, expected or desired by the customer and some will surprise them. Benefits include functional utility, social benefits, positive emotions, and cost savings.
Distinguish 03 following benefits:
Benefits Claim
These are benefits that without the solution would not work. For example, the most basic requirement we have from a smartphone is that we can make calls.
Expected Benefits
These are the relatively basic related benefits we would expect from a solution, even if it could work without them. For example, ever since Apple launched the iPhone, we expect the phone to be well designed and beautiful.
Unexpected Benefits
These are benefits that go beyond the expectations and desires of customers. They don't even think of it if we ask them. Before Apple brought touch screens and the App Store to the masses, no one really thought they were part of the phone.
Use the following nine trigger questions to help us brainstorm different potential customer benefits:
- What savings will make our customers happy? What savings in terms of time, money and effort would they value?
- What level of quality do they expect and do they expect more or less?
- How do current value propositions satisfy our customers? What specific features do they like? What performance and quality do they expect?
- What would make a client's job or life easier? Could there be a better learning curve, more services, or a lower cost of ownership?
- What positive social consequences do our customers want? What makes them good-looking? What increases their power or status?
- What are customers looking for the most? Are they looking for good design, assurance, detail or more features?
- What do customers dream about? What do they aspire to achieve, or what would be the greatest relief for them?
- How do our customers measure success and failure? How do they measure performance or cost?
- What increases the likelihood of our customers accepting a value proposition? Do they want lower cost, less investment, lower risk or better quality?
Note: sort the Benefits by necessity and clearly specify the Benefits
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Products and services
This is simply a list of what we deliver. Think of it as all the items that customers can see in our store. It is a list of all the products and services on which our value proposition is based.
This bundle of products and services helps our customers fulfill functional, social or emotional tasks or helps them fulfill basic needs.
Our value proposition can include a variety of products and services:
Material / tangible
Commodities, such as manufactured products.
Invisible
Products such as copyright or services such as after-sales support.
Digital
Products such as downloaded music or online services.
Finance
Products such as investment funds and insurance or loan services.
Note: sort Products and Services according to their need for the customer and clearly specify the Products and Services
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What is Customer Pain Treatment?
Pain Treatment is how our products and services ease the pain of specific customers. They clearly outline how we intend to eliminate or reduce some of the things that annoy customers as they try to get things done or prevent them from getting things done.
Use the following 09 trigger questions to ask yourself:
- Can our products and services save money, time or effort?
- Can our products and services make customers feel better? By killing customer frustrations, annoyances and other headaches.
- Can our products and services fix underperforming solutions? By introducing new features, better performance or improved quality.
- Can our products and services end the difficulties and challenges our customers face? By making things easier or removing obstacles.
- Can our products and services erase the negative social consequences our customers experience or fear? In terms of loss of face or loss of power, trust, status.
- Can our products and services eliminate the risk our customers fear? About the financial, social, technical risks or things that could go wrong.
- Can our products and services help our customers sleep better at night? By addressing important issues, reduce concerns or eliminate anxiety.
- Can our products and services limit or eliminate common mistakes customers make? By helping them use a solution properly.
- Can our products and services remove the barriers that are preventing our customers from accepting the value proposition? Introduce lower or no upfront investment costs, a flatter learning curve, or remove other obstacles preventing adoption.
Note: sort Pain Treatments by degree of need for the client and clearly specify Pain Treatments
Creative Benefits
Benefit creation is how our products and services benefit our customers. They clearly outline how we intend to produce the results and benefits that our customers expect, desire or will be surprised by, including functional utility, social benefits, positive emotions and Cost savings.
Use the following 09 trigger questions to ask yourself:
- Can our products and services generate savings that satisfy our customers? About time, money and effort.
- Can our products and services produce the results our customers expect or exceed their expectations? By quality level, more things or less things.
- Can our products and services exceed current value propositions and delight our customers? In terms of specific features, performance or quality.
- Can our products and services make a customer's job or life easier? Through usability, better access, more services, or lower cost of ownership.
- Can our products and services create positive social consequences? By making them good-looking or creating an increase in power or status.
- Can our products and services do something specific that customers are looking for? In terms of good design, assurance, detail or more features.
- Can our products and services fully fulfill the wishes of our customers? By helping them achieve a desire or relieve a tough challenge?
- Can our products and services produce positive results that match the customer's success and failure criteria? In terms of better performance or lower cost.
- Can our products and services make adoption easier? Through lower cost, less investment, lower risk, better quality, improved performance or better design.
Note: sort the Benefit Creations by necessity explicitly specify the Benefit Creations.
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Test a Value Proposition
Use the following criteria to design Value Propositions or self-assessments:
- The Value Proposition is embedded in a good Business Model.
- Focus on some Pain Healing and Benefit Creation, but do those things extremely well.
- Focus on the Work, Pain or Benefit that a large number of clients usually have or a few are willing to pay a lot of money for.
- Align with how customers measure success.
- Focus on the Most Important Tasks, the Heaviest Pains, and the Most Valuable Benefits.
- Distinguish from competition in a meaningful way.
- Specify the Functional, Emotional and Social Jobs.
- Outperform competitor basically on at least one dimension.
- Hard to copy.
- Focus on Unsatisfactory Jobs, Pains and Benefits
Canvas Business Model Example
Vinamilk's Canvas Business Model
Apple's Canvas Business Model
Shopee's Canvas Business Model
>>>For more information: Business Model Canvas Template
>>>Document: Download Essay on canvas model
Epilogue
Above is part 2 of the article on the Canvas business model, Johnson's Blog Hope everyone can apply it to their work to bring high efficiency to the business.
CONTACT INFO:
Johnson Vu – Deputy General Director of Viindoo Technology Joint Stock Company
- Address:
- Headquarters: 6th floor, Taiyo Building, 97 Bach Dang, Ha Ly, Hong Bang, Hai Phong, Vietnam.
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- Phone: + 84.225.730.9838
- Website: https://johnsonvu.com
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