Value proposition canvas reimagined

Customer experience lays the foundation for new digital business models

Digital business models are not an end in themselves. Rather their purpose is to offer a technical solution. The decisive factor is the transformation towards customer-centric value creation that brings with it a fundamental shift in culture. This is a challenging task that can only be accomplished within an interdisciplinary team, says Markus Holzner, Business Area Manager at bbv.

01.07.2022Text: bbv0 Comments

Digitalisation focuses on the people who are affected by change, with all of their tasks, challenges and joys. We can see in practice how difficult it is for providers of products and services to align their value-adding activities to the customer. Various methods and tools are available so that the full potential can be utilised and possible areas of action identified.

The value proposition canvas has proven to be a particularly effective tool in this respect. On the one hand, it lists the tasks that the customer has to complete (customer jobs). On the other hand, it outlines the problems and worries (pains) as well as everything that can offer benefits (gains) for the customer. The company’s offer is then compared for the customer against the value proposition. This analysis is essential in order to understand how good the products and services actually are for the customer. The building blocks for success can then be developed in an iterative process on this basis. The critical factor here is to continually verify the lessons learned with “real” customers. This significantly reduces risks in product design and in the innovation process.

Win-win potential of new digital business models

“Painkillers” and “benefactors” are the building blocks of digital business models. For example, a homeowner does not necessarily want to buy a heat pump. It is simply a means for them to regulate the room temperature. This is precisely where a digital business model comes into play. Instead of purchasing a heat pump, a regulated room temperature could be offered at a guaranteed service level. Data analyses would help here to significantly increase reliability and reduce pump failure to an absolute minimum.

Thanks to the digital business model, not only is the heating requirement fulfilled, rather the customer receives many additional benefits. For one, it can save the cost of investing in the pump and its installation and also to a large extent the fear of the heating system malfunctioning unexpectedly. Because the provider would now have to bear the cost of any damage, it is in its interest to prevent malfunctions as much as possible. In return, the additional “benefactors” and “painkillers” enabled by digital technologies give the provider effective leverage to increase its added value. This leads to a win-win situation for customers and providers. On the one hand, the customer experience improves and, on the other hand, this approach provides valuable input for new digital business models.

Customer-driven value creation as a goal

The key question now is how a company can specifically achieve customer-driven added value. Many companies can analyse customers and their own offer themselves using a value proposition canvas or comparable tool. But the analysis of the customer experience only serves as a basis for developing new digital business models. That’s because many companies reach the limit of their capabilities when it comes to designing and implementing specific digital solutions that are integrated into the existing processes and infrastructure. This requires extensive knowledge of the business area, the latest technologies and their practical applications. In addition, experience of implementing digitalisation projects is necessary, since the transformation to a customer-focused organisation always means a fundamental shift in culture. Developing the skills required for this becomes a success factor for companies so that all levels are properly coordinated. It is then easier to use current and future market opportunities in a targeted way and to successfully master the associated challenges.

The expert

Markus Holzner

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