Value Proposition Canvas: Guide, Example & Connection to the Business Model Canvas

Theodore Levitt put it succinctly in 1960: “Customers don’t want a quarter-inch drill — they want a quarter-inch hole” [1]. This sentence has been quoted thousands of times since. What’s missing is a tool that operationalizes this insight — one that systematically captures what “hole” your customer actually needs, what pains prevent them from getting it, and what gains they hope for. And then checks whether your offering matches.

That tool exists. It’s called the Value Proposition Canvas (VPC), developed by Alexander Osterwalder, Yves Pigneur, Gregory Bernarda, and Alan Smith in Value Proposition Design [2]. The canvas consists of two halves: a Customer Profile that describes jobs, pains, and gains, and a Value Map that shows how your offering addresses them. The fit between both halves is the value proposition.

What most explanations of the VPC have in common: they mention “Customer Jobs” without explaining the underlying Jobs-to-be-Done theory. They show startup examples but no service organizations. They ignore the connection to the Kano model, even though Kano’s categories map directly onto VPC elements. And they treat the canvas as a writing exercise rather than a research instrument.

This article gives you the theoretical foundation (Jobs-to-be-Done, Kano connection), a complete step-by-step guide, a worked-out practical example from the insurance industry, and the bridge to the Business Model Canvas.

What Is the Value Proposition Canvas?

The Value Proposition Canvas is a strategic tool that makes the relationship between customer needs and a company’s offering visible on a single page. It consists of two parts: the Customer Profile (right side) and the Value Map (left side). When both sides match, a Fit emerges — a value proposition that addresses real needs [2].

Osterwalder and Pigneur introduced the VPC in 2014 as an extension of their Business Model Canvas (BMC) [2]. The BMC describes on a single page how a company creates, delivers, and captures value — across nine building blocks [3]. Two of these blocks — Customer Segments and Value Propositions — are so critical that they justify their own, more detailed tool. The VPC is that magnification: it zooms into the two most important BMC blocks and breaks each into three elements.

When do you need the VPC instead of the BMC? Use the BMC when you want to understand the overall picture of your business model — channels, cost structure, partners, revenue streams. Use the VPC when you want to answer a specific question: Does our offering match what a specific customer segment actually needs? The BMC tells you whether your business model works. The VPC tells you whether your value proposition is right.

Jobs to be Done: The Theory Behind the Canvas

The customer profile of the VPC builds on a theoretical foundation that most explanations omit: the Jobs-to-be-Done theory (JTBD). This theory, shaped primarily by Clayton Christensen [4] and Anthony Ulwick [5], states: customers don’t “buy” products or services — they “hire” them to get a specific job done in their lives.

The Three Job Types

Christensen distinguishes three types of jobs [4]:

Functional jobs — the practical task that needs to get done. “Report my insurance claim and receive reimbursement.” “Complete the after-sales process for my vehicle.” These jobs are observable, measurable, and form the core of most VPC analyses.

Social jobs — how the customer wants to be perceived by others. “Be seen as a competent decision-maker who chose the right insurance.” “Show my team that I have the modernization process under control.” Social jobs are systematically overlooked in VPC practice because they can’t be asked about directly in interviews — nobody says: “I want to look good.” They surface in phrases like “I need to justify this to the board” or “My colleagues had good experiences.”

Emotional jobs — how the customer wants to feel. “Have certainty that everything is taken care of when a claim occurs.” “Not feel helpless when technology doesn’t work.” Emotional jobs are especially dominant in services because services are experienced, not possessed.

The Milkshake Case Study

Christensen’s most famous example illustrates the method [4]: a fast-food chain wanted to increase milkshake sales. Traditional market research produced no actionable results. Only the JTBD perspective revealed that commuters “hired” the milkshake in the morning to make a boring drive more bearable, bridge the hunger until lunch, and have something that fits in the cup holder. The job wasn’t “drink something sweet” but “meaningfully fill the commute time.” The competitors weren’t other milkshakes but bagels, bananas, and boredom.

Jobs Are Stable — Solutions Change

Ulwick’s central insight for VPC work: jobs change slowly, solutions change fast [5]. The job “get an insurance claim resolved quickly and without hassle” has been the same for decades. The solutions — paper form, phone hotline, online portal, app with photo upload — change constantly. A VPC that focuses on jobs rather than current solutions therefore remains relevant longer than one that documents feature requests.

Jobs in Services: What’s Different?

In services, jobs have a characteristic absent from products: they are co-produced. The customer is not a passive recipient but an active participant in the service delivery process. A policyholder reporting a claim must take photos, fill out forms, answer follow-up questions. A corporate client engaging strategic consulting must provide data, involve stakeholders, make decisions.

This means for the VPC: in services, jobs include not only what the customer wants to achieve but also what they must do during service delivery. These interaction jobs — “have the right documents ready,” “be available for follow-up questions,” “manage the internal approval process” — are separate jobs in the customer profile, with their own pains and gains.

The Canvas in Detail

The Customer Profile (Right Side)

The customer profile describes a specific customer segment — not “all customers” but a clearly defined group with shared jobs, pains, and gains. Osterwalder et al. emphasize: one VPC per customer segment [2]. Never mix two segments in one canvas.

Customer Jobs — What is your customer trying to get done? Note functional, social, and emotional jobs. Formulate them from the customer’s perspective, not yours. Not: “The customer uses our app.” But: “I want to have reported my claim as quickly as possible without filling out three forms.”

For services: distinguish between the core job (the desired outcome) and interaction jobs (what the customer must do during service delivery). In the insurance example: the core job is “receive financial compensation for my damage.” The interaction jobs are “take damage photos,” “fill out forms,” “be available for follow-up questions.”

Pains — What prevents the customer from getting their job done? What frustrates them? What costs too much (time, money, effort)? Osterwalder et al. distinguish three types [2]:

• Undesired outcomes — “The process takes three weeks instead of three days.”
• Obstacles — “I have to enter the same data three times.”
• Risks — “I don’t know whether my claim is even covered.”

For services: pains are often experiential and emotional, not just functional. Waiting, uncertainty, feeling like a number, lack of transparency about processing status — these are the typical service pains that don’t appear in product-focused VPC examples.

Gains — What outcomes and benefits does the customer want? Osterwalder et al. distinguish four levels [2]:

• Required gains — Without them, the solution doesn’t work. “I need to receive the reimbursement in my account.”
• Expected gains — The customer counts on them. “The process shouldn’t take more than a week.”
• Desired gains — The customer would like to have them but doesn’t necessarily expect them. “Real-time status updates via app.”
• Unexpected gains — The customer never thought of them. “Proactive notification that my policy needs an upgrade.”

For services: gains unfold over time because services are process-based. A good insurance claims process doesn’t produce a single gain at the end (payout) but a chain of gains along the touchpoints: immediate confirmation of receipt, transparent status tracking, proactive communication, fast resolution.

The Value Map (Left Side)

The Value Map describes how your offering addresses the customer’s jobs, pains, and gains.

Products & Services — What do you specifically offer? Not the brand, not the tagline, but the concrete offerings: “Digital claims reporting via app,” “24/7 claims hotline,” “automated coverage verification in real time.”

Pain Relievers — How does your offering eliminate or reduce the customer’s pains? For each documented pain: which element of your offering addresses it? “One-time entry: all data is automatically pre-filled from the existing policy” solves the pain “I have to enter the same data three times.”

For services: pain relievers are often process design decisions, not product features. The waiting time frustration isn’t solved by a feature but by a process change (automatic status notifications). The feeling of not being taken seriously is solved by staff training, not by software.

Gain Creators — How does your offering produce the desired gains? “Proactive push notification at every status change” creates the gain “I always know where my case stands without having to ask.”

When Does Fit Emerge?

Fit emerges when the Value Map addresses the most important jobs, pains, and gains in the customer profile [2]. Not all of them — the most important ones. The art lies in prioritization: Which jobs are most urgent? Which pains are most painful? Which gains produce the greatest satisfaction? This is where the connection to the Kano model helps.

Connection to the Kano Model

The Kano model classifies features by their effect on customer satisfaction across five categories, three of which map directly onto the VPC [6]. This connection is absent from the literature — even though it significantly improves VPC prioritization.

Kano Category	VPC Element	Logic
Must-be quality	Pain Relievers for extreme pains	Absence creates massive dissatisfaction, presence goes unnoticed. These pains must be solved — they are non-negotiable.
One-dimensional quality	Pain Relievers + Gain Creators for expected gains	The better fulfilled, the more satisfied. Optimization pays off here: faster processing time, better accessibility, greater transparency.
Attractive quality	Gain Creators for unexpected gains	Create disproportionate satisfaction, but their absence doesn’t disappoint. This is where differentiation potential lies: proactive recommendations, surprisingly fast resolution, personal follow-up.

Prioritization rule: Always start with must-be quality — the pain relievers for the most severe pains. Only when these are covered, invest in one-dimensional quality (expected gains) and then in attractive quality (unexpected gains). A value proposition that delivers attractive quality but neglects must-be quality will fail — because the absence of a must-be feature overshadows any delight [6].

For a deeper introduction to Kano categories, the questionnaire, and the evaluation table, see the Kano model guide.

Step-by-Step Guide: How to Fill Out the VPC

Phase 1: Create the Customer Profile (Always First)

Step 1 — Define the customer segment. Choose a specific segment. Not “our customers” but “private customers under 40 who are filing a vehicle damage claim for the first time.” The more specific, the more useful. A VPC for “everyone” is a VPC for no one.

Step 2 — Collect jobs. Start with functional jobs, then add social and emotional ones. Formulate from the customer’s first-person perspective. Use the question: “What are you trying to get done?” — not “What do you want from us?”

Step 3 — Document pains. For each job: What can go wrong? What frustrates? What costs too much? Use the three categories: undesired outcomes, obstacles, risks.

Step 4 — Document gains. For each job: What would be the best possible outcome? What do you expect at minimum? What would positively surprise you?

Step 5 — Prioritize. Not all jobs, pains, and gains are equally important. Mark the top 3 in each category. Use the Kano model or a simple impact rating (high/medium/low) for this.

Phase 2: Create the Value Map

Step 6 — List offering elements. What do you specifically offer? Products, services, digital features, personal consulting.

Step 7 — Assign pain relievers. For each prioritized pain: which element of your offering solves it? Draw lines from pain reliever to pain. Missing connections reveal gaps.

Step 8 — Assign gain creators. For each prioritized gain: which element of your offering produces it? Here too: missing connections are gaps.

Phase 3: Assess Fit

Step 9 — Check coverage. Go through all prioritized jobs, pains, and gains. For how many do you have at least one pain reliever or gain creator? The coverage rate shows how strong your fit is.

Step 10 — Close or accept gaps. Not every gap needs to be closed. Some pains you can’t solve (e.g., regulatory waiting periods). Document deliberate gaps — they are strategic decisions, not oversights.

Discovery Questions for Research

Before filling out the VPC, you need data. The following questions help with interviews and observations:

Category	Discovery Question
Jobs	”Tell me what happened last time you used [the service].”
Jobs	”What were you trying to achieve — and what did you have to do to get there?”
Pains	”What was the most frustrating part of the process?”
Pains	”What would you have wished had gone differently?”
Gains	”If you had one wish — what would make the service perfect?”
Gains	”What positively surprised you — with us or with another provider?”

Interview techniques:

• Contextual Inquiry — Observe the customer while they use the service and ask questions in the moment. More effective than retrospective interviews because memories distort [7].
• JTBD Interview — Focus on the last concrete use case: “When was the last time you did X? What triggered it?” Christensen and his colleagues call this the “Timeline Interview” [4].
• Five Whys — For each pain: ask “Why?” five times to move from the surface to the root cause.

Practical Example: VPC for an Insurance Company

Context

A mid-sized insurance company wants to redesign its digital claims reporting process. The customer segment: private customers filing a vehicle damage claim for the first time — typically under stress, with little process experience.

Customer Profile

Customer Jobs:

• Functional: “Report my damage quickly and completely so that the resolution process can begin.”
• Functional (interaction): “Provide the right photos in the right quality.”
• Functional (interaction): “Answer follow-up questions from claims processing without having to explain everything twice.”
• Social: “Show my family that I have the situation under control.”
• Emotional: “Have certainty that the damage is covered and I won’t be stuck with the costs.”

Pains:

• “I don’t know what information I need to provide — the form asks for things I don’t understand.” (Obstacle)
• “After submitting, nothing happens for days — I have no idea whether my case is being processed.” (Risk)
• “I have to enter the same data that’s already in my policy.” (Undesired outcome)
• “The process feels cold and bureaucratic — I’m in a stress situation and being treated like a case number.” (Emotional)
• “When I call the hotline, I have to explain everything again because the agent has no access to my online submission.” (Obstacle)

Gains:

• Required: “I receive my reimbursement in my bank account.”
• Expected: “The process doesn’t take longer than a week.”
• Desired: “I can see where my case stands at any time — like a package delivery.”
• Unexpected: “The insurer reaches out to me proactively before I have to follow up.”

Value Map

Products & Services:

• Digital claims reporting via app with camera integration
• Automated coverage verification in real time
• Personal claims manager (by phone and chat)
• Real-time status portal with push notifications

Pain Relievers:

• “What information do I need to provide?” → Guided reporting process with camera overlay showing which photos are needed from which angle.
• “Days without any response” → Automatic confirmation of receipt within 60 seconds with estimated processing timeframe.
• “Duplicate data entry” → Policy data is automatically pre-filled; the customer only confirms.
• “Cold and bureaucratic” → Personal claims manager who reaches out within 4 hours and has a name.
• “Hotline doesn’t know about online submission” → Unified system: every employee sees the complete case history.

Gain Creators:

• “Reimbursement in my account” → Express payout within 48 hours for minor claims under EUR 2,000.
• “Not longer than a week” → Parallel rather than sequential processing of coverage verification and appraiser appointment.
• “Status like package delivery” → Real-time tracker with five stages: Received → Under Review → Appraiser Assigned → Resolution → Paid Out.
• “Proactive contact” → Automatic push notification at every status change and proactive call if the case stays in one stage for more than three days.

Fit Assessment

All five prioritized pains have at least one pain reliever. All four gains have at least one gain creator. Coverage is high — but feasibility varies: the unified system (Pain Reliever 5) requires IT integration that could take 6-12 months. Express payout (Gain Creator 1) requires new approval processes. The VPC shows the fit — the implementation roadmap is a separate step.

VPC for Services: What’s Different?

Most VPC examples come from the product world — apps, SaaS tools, physical products. For services, four characteristics change the canvas:

1. Co-Creation: The Customer Is a Co-Producer

With products, the customer receives the result. With services, they participate in creating it. This means: interaction jobs (what the customer must do during service delivery) are separate jobs in the customer profile, with their own pains and their own gains. A policyholder who must upload photos has an interaction job — and if the app crashes or the upload instructions are unclear, they have an interaction pain.

2. Experiential Pains: Pains Are Lived, Not Abstract

With products, pains are often functional: “The device is too slow,” “The battery doesn’t last.” With services, pains are often experiential and emotional: waiting without status information, feeling like a number, fear of doing something wrong. These pains don’t appear in product-focused VPC templates because the templates ask about features, not experiences.

3. Temporal Unfolding: Gains Emerge at Touchpoints

A product delivers its value at the moment of use. A service unfolds its value over time, at different touchpoints. A good claims process doesn’t produce one gain (payout) but a chain: fast confirmation, transparent status, empathetic contact, fair resolution, quick payout. A VPC for a service should therefore document gains not as individual points but as a touchpoint chain.

4. Multiple Micro-VPCs per Service Journey

The consequence: for complex services, a single VPC often isn’t enough. A service blueprint of an insurance claims process has ten or more customer actions — and at each touchpoint, there are unique jobs, pains, and gains. In practice, an approach with one overall VPC (for the core job of the entire service) and touchpoint VPCs (for the three to four most critical touchpoints) works well. You identify the critical touchpoints via a customer journey map — where the emotion curve is at its lowest.

From VPC to Business Model Canvas

The VPC and the BMC are not alternative tools — they are nested. The VPC zooms into two of the nine BMC blocks [2] [3]:

BMC Block	VPC Equivalent
Customer Segments	Customer Profile (Jobs, Pains, Gains)
Value Propositions	Value Map (Products, Pain Relievers, Gain Creators)
Channels	→ Emerge from the touchpoints in the VPC
Customer Relationships	→ Emerge from the social/emotional jobs
Key Resources	→ What do you need to deliver the pain relievers?
Key Activities	→ What must you do to create the gain creators?
Key Partners	→ Who delivers parts of your Value Map?
Cost Structure	→ What do the pain relievers and gain creators cost?
Revenue Streams	→ What is the customer willing to pay for, based on solved pains and created gains?

The recommended sequence: Start with the VPC (understanding customer need and value proposition), then build the BMC around it. The VPC provides the foundation for the strategic decisions in the BMC — channels, partnerships, cost structure only emerge once it’s clear which value proposition you want to deliver.

Validation: From Canvas to Reality

A filled-out VPC is a hypothesis, not truth. Osterwalder et al. emphasize: “Your value proposition is a hypothesis until validated” [2]. Without validation, the canvas is a writing exercise.

Problem interviews — Show the Customer Profile (not the Value Map) to real customers and ask: “Is this accurate? Is anything missing? What’s most important?” Goal: verify the hypotheses about jobs, pains, and gains.

Solution interviews — Show the Value Map and ask: “Would this solve your problem? What’s missing? What don’t you need?” Goal: verify the hypotheses about pain relievers and gain creators.

Concierge MVP — Deliver the service manually before automating it. An insurer could test the new claims process with a dedicated employee who personally guides the entire process — before the app is built.

Landing page test — Describe the value proposition on a landing page and measure interest (clicks, sign-ups). Works especially well for new services.

Common Mistakes

1. Starting with the Value Map

The most common mistake: teams start on the left (our offering) instead of the right (customer need). This produces a VPC that confirms what the team already believes rather than checking whether the offering matches the need. Always start on the right — Customer Profile first, Value Map second [2].

2. Mixing Customer Segments

“Our customers” is not a segment. If your VPC is supposed to work for private customers and corporate clients simultaneously, it won’t be specific enough for either. One VPC per segment. If you don’t know how to segment, start with the job: which customers have the same job?

3. Only Functional Jobs

Teams list ten functional jobs and zero social or emotional ones. The result: a value proposition that fits functionally but feels emotionally cold. In the insurance industry, this is especially critical: a damage claim is an emotionally charged situation. A VPC that only lists “report damage” and “receive reimbursement” misses the emotional jobs — security, control, trust.

4. VPC as a Desk Exercise

The canvas is filled out in a meeting room, based on the team’s assumptions. No interviews, no observations, no data. The result: a VPC that documents the company’s inside view, not the customer’s outside view. Use the discovery questions and interview techniques from the previous section.

5. No Validation After Filling Out

The canvas is filled out, photographed, uploaded to the wiki — and never tested. Without validation, every VPC remains a hypothesis. Plan at least five problem interviews before making decisions based on the canvas.

6. VPC as a One-Time Event

The VPC is created once and then forgotten. But customer needs change — not the jobs (those are stable), but the pains and gains shift. What was an attractive quality feature in 2023 (real-time status) is a must-be expectation in 2026. Plan semi-annual reviews — ideally with fresh customer data.

Frequently Asked Questions

What is the difference between the Value Proposition Canvas and the Business Model Canvas?

The Business Model Canvas (BMC) describes on a single page how a company creates, delivers, and captures value — across nine building blocks [3]. The Value Proposition Canvas (VPC) zooms into two of these blocks: Customer Segments and Value Propositions. The BMC answers “How does our business model work?”, the VPC answers “Does our offering match the customer need?” In practice: VPC first (sharpen value proposition), then BMC (build business model around it).

What are Jobs to be Done?

Jobs to be Done (JTBD) is a theory stating that customers don’t buy products — they “hire” them to get a job done in their lives [4]. The theory distinguishes functional jobs (practical tasks), social jobs (how one wants to be perceived), and emotional jobs (how one wants to feel). In the VPC, Jobs to be Done form the foundation of the Customer Profile. Christensen’s milkshake study and Ulwick’s Outcome-Driven Innovation are the two most important JTBD approaches [4] [5].

How do you validate a value proposition?

A value proposition is validated in three stages: (1) Problem interviews — check whether the documented jobs, pains, and gains match customers’ reality. (2) Solution interviews — check whether the proposed pain relievers and gain creators are actually perceived as valuable. (3) Market test — test the value proposition with a concierge MVP, a landing page test, or a pilot project. Osterwalder et al. recommend at least ten interviews per validation stage [2].

Who is the Value Proposition Canvas suitable for?

The VPC is suitable for any organization that wants to understand whether its offering matches the needs of a customer segment — regardless of industry or company size. It is especially valuable when developing new services, redesigning existing services, entering new customer segments, and prioritizing features. Prerequisite: the willingness to collect real customer data rather than document assumptions.

References

[1] Levitt, Theodore. “Marketing Myopia.” Harvard Business Review 38, no. 4 (July-August 1960): 45-56.

[2] Osterwalder, Alexander, Yves Pigneur, Gregory Bernarda, and Alan Smith. Value Proposition Design: How to Create Products and Services Customers Want. Hoboken, NJ: Wiley, 2014.

[3] Osterwalder, Alexander, and Yves Pigneur. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ: Wiley, 2010.

[4] Christensen, Clayton M., Taddy Hall, Karen Dillon, and David S. Duncan. Competing Against Luck: The Story of Innovation and Customer Choice. New York: Harper Business, 2016.

[5] Ulwick, Anthony W. What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services. New York: McGraw-Hill, 2005.

[6] Kano, Noriaki, Nobuhiko Seraku, Fumio Takahashi, and Shin-ichi Tsuji. “Attractive Quality and Must-Be Quality.” Journal of the Japanese Society for Quality Control 14, no. 2 (1984): 39-48.

[7] Beyer, Hugh, and Karen Holtzblatt. Contextual Design: Defining Customer-Centered Systems. San Francisco: Morgan Kaufmann, 1998.