Workshop 1
Defining Your Value Proposition
1
Welcome and Introductions
2
Dr. Kamran Razmdoost
Kamran is a research associate in project enterprise marketing at UCL, the Bartlett
school of construction and project management. He completed a PhD in management
at Cranfield School of Management. Kamran’s areas of interest include strategic
marketing and people’s behaviour. He has performed research on topics such as value
co-creation and consumer knowledge biases. Kamran also has business experiences
in online retail industry of UK and Oil, Gas and Petrochemical industries of Iran. He is
interested in music and Persian poetry.
Email: [email protected]
Dr. Vedran Zerjav
Vedran is a UCL research associate focusing on business model innovation in the
International Centre for Infrastructure Futures. He is part of the Bartlett School of
Construction and Project Management where he also contributes to teaching on
design, organisation, and management-related subjects. Besides his current role at
UCL, Vedran has extensive international experience working on projects in some of the
world’s most vibrant entrepreneurial environments including Stanford University,
University of Twente, and Vienna University of Technology. Before joining academia
full-time, Vedran worked for a boutique consultancy specialising in project management
advisory for public sector clients.
email [email protected]
Introduction to SME Growth Support
Innovate UK SME Growth Support
New offer for successful SMEs in Innovate UK competitions from 2015:
• Diagnosis of Business Needs
•
Attend Growth Workshop, meet Growth Manager, develop Growth Plan
• Connecting to Business Support
•
Participate in Coaching, Mentoring & Entrepreneurial Skills training
• Connecting to other Government Support
•
Introductions to UKTI, IPO, KTN, EEN, Catapults
• Connecting to Investors
•
Showcase face-to-face and online
Entrepreneurial Skills Training Menu
Workshop 1:
Workshop 2:
Workshop 3:
Workshop 4:
Workshop 5:
Workshop 6:
Workshop 7:
Workshop 8:
Workshop 9:
Workshop 10:
Workshop 11:
Workshop 12:
Defining Your Value Proposition
Developing Your Business Model
Testing and Refining Your Business Model
Pricing Strategy and Tactics
Strategic Marketing
Web Fuelled Business
Selling & Negotiation
Building, Managing and Leading Winning Teams
Organisational Strategy and Development
Financial Management for Growth
Access to Finance for Growth
Mitigating and Managing Risk
7
Housekeeping
Wifi:
WIFI
.IDEAL
No password
Ground rules and what to expect
•
•
•
•
•
Support and challenge
Confidentiality
No such thing as a stupid question
Socratic Method
Slides availability
Introduction to the
3 day workshop
Core Entrepreneurial Skills Training workshops
Workshop 1: Defining
Your Value Proposition
Workshop 2: Developing
Your Business Model
Workshop 3: Testing and
Refining Your Business
Model
12
09:00
Arrival
09:30
Welcome and introductions
10:15
Introduction to Business Modelling
Question1:What do you do that people need or want?
11:30
Break
11:45
Question 2: Who are your customers?
13:00
Lunch
14:00
The Value Proposition Canvas
15:15
Break
15:30
Building your value proposition
16:15
Refining value propositions
17:00
Close
Learning objectives
To understand:
• The role of Business Model Innovation
• The value of the 10Qs and the Business Model Canvas/Value
Proposition Canvas
• How to define specific needs and wants for your customers
• The importance of customer segments and how to prioritise these
• The importance of testing your assumptions to inform your value
proposition
14
Ice breaker
In pairs, answer the questions:
•
•
Who you are?
What does your business do?
Then each person will:
•
Try to summarise the other person’s business proposition, in as few words
as possible.
Introduction to
Business Modelling
What is a Business Model?
How an organisation creates, delivers and captures value
(Source: http://en.wikipedia.org/wiki/Business_model)
17
Business model innovation - Xerox
Business model innovation - Netflix
Business model innovation - Google
A powerful combination
10 Questions Method
Business Model Canvas
(School for Startups)
• Developed in 2008 for entrepreneurs
• Socratic questioning approach
• Enables you to discover your business
model, test hypotheses and see if
assumptions stand up.
Alexander Osterwalder and Yves Pigneur
• Increasingly popular tool
• Simple one page format – excellent for
communication
• Can be used to capture the answers to
the 10 Questions
• Propose, discuss, design or
change/pivot your business model.
Other business model tools…
• The Lean Startup, Eric Ries/Steve Blank
• Seizing the White Space: Mark Johnson works with Clayton
Christensen
• Open Innovation: Henry Chesbrough
• Strategy Diamond: Hambrick & Fredrickson
• Business Models in the Digital Economy: Patrick Staehler
• Value networks: Verna Allee
The 10 Questions
Question 1
What do you do that people need or want? The Proposition
Question 2
Who are your customers? The Customer and Market Segment
Question 3
Who are you up against? The Competition
Question 4
What do you have in common? The Industry
Question 5
How do you reach your customers? The Channels
Question 6
What relationship do you want with them? The Customer and Financial
Relationship
Question 7
What is it worth to them? The Price and Revenue Model
Question 8
Who are your key partners? The Partners
Question 9
What are your key assets? The Assets
Question 10
What must you be good at? The Competencies
Business model canvas explained...
Video
26
Uses
• Innovation
• Strategic planning
• Organisational
alignment
• Investment
Startups
Vs
Established
Q4
Q3
Q6
Q10
Q1
Q8
Q2
Q7
Q5
Q9
Q6
29
Question 1
What do you do that people need or want?
The Proposition
What is your promise/value proposition?
What need or want you are addressing?
Who are you creating value for?
How are you doing this?
Exercise
5 minutes to answer:
What is your promise/value proposition?
What need or want you are addressing?
Who are you creating value for?
How are you doing this?
32
Feedback
A strong value proposition should be
addressing a specific need or want for a
clearly defined customer segment.
34
Break
35
Question 2
Who are your customers?
The Customer and Market Segment
Question 2
Who are your customers?
Which specific customer segments do you create value for?
37
What is a market segment?
A group of people/organisations that share one or
more characteristics
38
Jobs to be done?
39
Video
Professor Clayton Christensen – Jobs to be done
40
41
What ‘jobs’ are your customers trying to get done?
• Functional jobs
• Social jobs
• Emotional jobs
Developed by Innosight and Strategyn
Exercise
1) Choose ONE of your customer segments
2) Explore the ‘jobs’ the customer is trying to get done
Functional jobs?
Social jobs?
Emotional jobs?
43
Creating Value
How do you create value for your customers?
Features
Benefits
Value
Exercise: Features and Benefits
Pick a product or service that you offer.
Spend 10 minutes making a list of the product or service
features that you offer and what this means for your
customers in terms of benefits.
46
What are your customer’s ‘pains and gains’?
Pains :0(
Gains :0)
Describe negative
emotions, undesired costs
and situations, and risks
that your customer
experiences or could
experience before, during,
and after getting the job
done.
Describe the benefits your
customer expects, desires
or would be surprised by.
This includes functional
utility, social gains, positive
emotions, and cost savings.
48
Exercise
Using the same customer segment you selected
earlier, spend 5 minutes making notes on the
Pains and Gains your customer might have.
49
Lunch
The Value Proposition Canvas
The Value Proposition Canvas (Osterwalder)
Source: Strategyzer
52
53
Source: Strategyzer
Video
Value proposition explained
54
55
An example….
56
57
Building Site Managers
58
59
Source: Strategyzer
Case Study Exercise:
Using the Value Proposition Canvas
60
Break
61
Exploring your own Value Proposition Canvas
62
Exercise Feedback
63
Good practice
• The importance of being narrow – one customer
segment only per canvas.
• You do not just have ONE value proposition but different
value propositions for different customer segments.
• Prioritising is an important stage of the process.
• Start with the customer!
• Avoid using technical jargon – keep language simple
64
65
Source: Strategyzer
66
Source: Strategyzer
Refining your value proposition
67
A value proposition is…
A positioning statement that explains what
benefit you provide for who and how you do it
uniquely well.
Geoffrey Moore
68
Value proposition template
For ____ (target customer)
who ____(statement of the need/opportunity)
our product/service or brand name
is ____________ (product category)
that (statement of benefit) ____________
Source: Geoffrey Moore’s Value Positioning Statement
69
An example…
For commercial crab fishermen who want to keep
crabs alive on route to market (for the best price)
The Patented Crab System TM is a water filter
system that removes chemicals that are toxic to
crabs providing 35% better survival over 8 days at
sea.
Value Proposition Exercise
Apply the Value Proposition template:
For ____ (target customer)
who ____(statement of the need/opportunity)
our product/service or brand name
is ____________ (product category)
that (statement of benefit) ____________
Other templates
Steve Blank's XYZ
“We help X do Y doing Z”.
Example
We help non-technical
marketers discover return on
investment in social media by
turning engagement metrics
into revenue metrics.
72
The importance of prioritising segments
Which customer segments would you prioritise?
73
Prioritising customer segments
Which segment…
• Values your product/service most?
• Is the easiest to access?
• Is the fastest growing?
• Is the easiest to test?
Exercise: Prioritising market segments
Spend some time completing the market segment matrix for your
business:
1) List the different market segments available to you.
2) Enter a score between 1 and 3 for each segment against each
criteria (1 = Low and 3 = High)
•
•
•
•
Value
Ease of access
Growth potential
Ease of Testing
75
A note on testing…
“If you are a very young company then the ability to reach
customers to test can often be one of the keys to success,
so if you haven’t yet started delivering the product, this
could be your key differentiator.”
School for Startups
76
Customer
Research
Information Mining
Testing
Customer research
The job of customer research to help reveal which pains and gains are
most important and why.
• Not all jobs have the same significance to your customer
• Not all problems are equal (some are crucial and some more trivial.
Some may be one off while others will be re-occurring)
• Explore the context in which ‘pains and gains’ arise
78
Customer Research and Testing Assumptions
Some questions an SME could ask……
• Would you buy this product or service?
• Is there anything about our product or service that
makes it unattractive to you?
• Is there anything about our product or service that
you really love?
• Is there anything you would change about our
product or service?
• Do you know of anyone else who sells products or
services like the one we have planned?
• What would cause you to look for our
product/service?
• How much would you expect to spend based upon
similar products and services you have purchased
in the past?
• Is there anyone you might recommend our product
or service to?
Testing
• Getting out of the building
• Minimum Viable product
80
“Great value propositions are
paramount to successful
business models…..”
What is your value proposition?
81
Q&A and wrap-up
Questions?
What learning will you take back to your business?
What will be your next steps?
Future support
Contact your Growth Manager to discuss further training, mentoring &
coaching as part of Innovate UK’s SME Growth Support
OR contact Jonathan Baty, Business Growth Executive
[email protected] 0121 232 5106
UCL Advances has its own support programmes
• http://www.ucl.ac.uk/advances
• [email protected]
83
Entrepreneurial Skills Training Menu
Workshop 1:
Workshop 2:
Workshop 3:
Workshop 4:
Workshop 5:
Workshop 6:
Workshop 7:
Workshop 8:
Workshop 9:
Workshop 10:
Workshop 11:
Workshop 12:
Defining Your Value Proposition
Developing Your Business Model
Testing and Refining Your Business Model
Pricing Strategy and Tactics
Strategic Marketing
Web Fuelled Business
Selling & Negotiation
Building, Managing and Leading Winning Teams
Organisational Strategy and Development
Financial Management for Growth
Access to Finance for Growth
Mitigating and Managing Risk
84
Workshop 2: Developing your Business Model
Date: November 18
Venue: IDEALondon
85
Feedback
Thank you
(C) School for Startups 2009 - 2015