Each project arises from an idea or a recognized need and is usually intended to create value for customers or one's own business.

Many projects and ideas are often initiated based on the assumption that the result of the project, i.e. the end product or the service, is really unique, is absolutely necessary for the customer and will really hit him. Many advantages and benefits are seen for both the company and the customer.

Once the idea for a project, a product or service development has matured, a business case is created with a great deal of effort, which is intended to underpin the economic justification for a project. Again with many assumptions and hypotheses that are often not exactly verifiable, especially with regard to the monetary benefit aspects. The business case is dealt with intensively. This creates the illusion that it could actually work.

Sometimes, however, a business case is calculated in a targeted manner so that the project is approved or a justification can be presented. Who really manages to refute supposedly plausible assumptions and hypotheses? Who looks at the business case again later?

Value proposition design

The Value Proposition Canvas has two sides. On the one hand, the customer understanding is formulated within the framework of the customer profile. The value map describes how the provider intends to create value for the customer.

On a large-format printout (e.g. A0) of the canvas, a first draft for customer understanding (which is not yet validated at the beginning!) can be developed relatively quickly in a workshop with the help of sticky notes (e.g. Post-it). The advantage here is the simple handling and common language that is used.

 Common practice

Based on your own ideas or superficial knowledge of what the customer needs and really wants, the value proposition (offer, project idea, product, service) is used as a basis/designed.

Often the customer understanding is not really well developed and is characterized by many assumptions and hypotheses.

This is how offers, project ideas, products and services are designed that find little response and acceptance from the customer. A lot of effort, commitment, money and time was then burned with little profit.

Development of an intensive customer understanding

Finding out what customers really want isn't always easy. Information and statements from customers can be confusing, sometimes even contradictory.

The right way is to intensively penetrate the customer segment/customer profile.

Related: new product development

At the beginning, assumptions and hypotheses are often used. This concerns both the content on the topics of tasks/customer jobs, problems, prizes and their weighting, ie the importance of the tasks, the seriousness of the problems and the relevance of the prizes.

Constantly questioning content for “why” drives insight and understanding of what really drives customers.

Observing customers and putting themselves in their shoes helps to gradually validate the assumptions made. Various techniques for obtaining customer insights that support validation are described in the book Value Proposition Design (see Bibliography).

Design of the value proposition based on an intensive understanding of the customer

When customers can get excited about the value proposition, often when important tasks are addressed, significant gains are made possible, and serious problems are solved, then alignment is achieved.

A value proposition cannot account for every win, problem, or task. It is important at this point to concentrate on the most important content from the customer's point of view.

If the profit generators for the most significant profits, the problem solvers for the serious problems and the solutions for the consideration of important tasks are derived from the customer's perspective via the customer segment/profile, the chance for the success of the offer, project or product has increased greatly. The design of the value proposition idea cleared a major hurdle.

A prototype of the value proposition has been created.

Validation of the value proposition prototype - design, test, iterate

Tests must be used to verify whether the underlying assumptions and hypotheses about the prototype of the value proposition for the offer, project idea, product or service are really viable.

With it, the assumptions and hypotheses are checked and proven or not, which is important to the customers.

Value proposition design aims to test ideas as quickly as possible in order to learn how to develop and re-test better value proposition designs.

If the idea is not viable, it must fail early and thus cost-effectively. This means that either the idea is no longer pursued or iteratively changed in such a way that it becomes viable.

Conclusion

Based on an intensive understanding of the customer, value proposition ideas are developed.

These are then subjected to tests relatively quickly and further developed iteratively via a learning process into improved value propositions. This can reduce the risk and uncertainty about the success of a project idea, product or service.

This approach is strongly reminiscent of the agile Scrum approach.

The validity of a business case with its hypotheses and assumptions can also be questioned in this way.