Customer Value: Mapping Customer Problem to OVP (Online Value Proposition)

01 Dec Customer Value: Mapping Customer Problem to OVP (Online Value Proposition)

The core of any marketing activity is to ascertain a customer who has a specific need and is looking to a solution to meet that need. That solution could be a product, a service, a piece of information and even an online advice forum. Meeting that need is the core job of Marketing and in the same breadth, meeting that need through any of the digital channels provides the base for digital marketing.

Basics of Value Proposition

Before to define the terms Customer Value and OVP (Online value proposition), let us go to the root where all marketing and in a larger sense all business endeavors begin- which is defining the “customer problem”. In simplest terms a customer problem is a set of issues which a customer might face while performing any activity or going through a process. It could be even a simple act of buying grocery or needing a house for rent. Every activity which is accomplished by a customer can typically have one or more problems associated with it. Each of these problems give rise to what we call in marketing terms as customer needs which translate into opportunities for them to service through present products or create new product service categories accordingly.

Philip Kotler in reference to explanation of needs (Refer to Marketing Management- 14th Edition) defines needs into multiple categories which can broadly be bucketed as “Stated Needs” (those which the customer knows and expresses, and “Unstated Needs” (those which a customer does not express and might not even know that they exist). From Kotler’s text, we have picked two other kinds of needs to be included in the Unstated needs bucket- “Delight needs” (those which offer the customer higher satisfaction than he would normally expect) and “Secret needs” (those which the customer will never state but secretly wish for) and also added a third need “Efficiency needs” (those which will help the customers execute any activity/task in a much quicker, convenient and efficient manner) to bring to light the opportunities which marketers can capture if they are able to correctly identify a customer problem and service the needs arising from them.

With this background understanding into Customer problem and his needs, let us look at the diagram below, to understand the mapping between Customer problem and his needs to the Online Value Proposition created by marketers to respond to those needs. The diagram showcases the two sides to marketing and product, service or brand- The Buy side and the Sell side. For each business transaction to occur, there has to be a mapping between the left and right sides and only when the Sell side is able to identify the right kind of needs and service them with an appropriate kind of product/service does a business transaction occur.

Diagram: Mapping Customer Problem to OVP (Online Value Proposition) potential

With a clear understanding of ‘Customer Problem’, let us understand what we mean by ‘Value Proposition’ which would lead us to define the concept of OVP ‘Online Value Proposition’. The term ‘Value’ for a customer would be any kind of tangible or intangible (or a mix of both) enhancement which a customer experiences while interacting with any product or service in comparison to similar products/services which he has used/interacted with before. 

Establishing Online Value Proposition

The term ‘Value Proposition’ is more experiential in nature and relates to the extent to which a customer finds any new additions worthwhile/differentiated or of an enhanced use for him which helps ease the present process/manner in which he deals with any specific problem at hand. Since the term value can mean differently to different clients in different circumstances, it is very important to knowing the potential for offering such a value online, which will finally decide whether the customer will pay for that additional value or not. This identification is termed as knowing the OVP, ‘Online Value Proposition’ which has to be created for each customer segment depending upon the known/unknown “Customer Problem” they have at hand helping them solve it.

Let us go back to the earlier definition of the two kinds of needs (stated and unstated) to map them to their fulfilment which will help clarify the concept. Any needs stated or unstated by a customer will typically lead to three conditions-

1. Need Met With- Where customer needs are met with at a more or less satisfactory to good level and there is little scope of a value add
2. Need Met With but still has improvement scope- When customers’ needs are being met but there is a clear and stated improvement scope which marketers can decipher through customer connect/feedback or dedicated focus group
3. Need Not Met and has high scope for value improvement- This is when customer typically does not even know of his needs and the problems he is facing as a result.

If we try and map the above three situations with what the “Sell Side” has to offer, we can map the areas where there is more potential to develop a distinct and serviceable OVP (Online value Proposition) and differentiate them from those which only have a little value-add scope, thus helping in the identification, validation and subsequent creation of new products/services or enhancement of the present products/services at hand. 

The Problem-Value mapping also helps entrepreneurs and business owners launching new products to test the feasibility of new product launches in the market. Many entrepreneurial frameworks have also been developed on this mapping exercise referred to as ‘lean startup’ where marketers and new product creators test an MVP ‘minimum viable product’ in the market to validate its differentiated value before they even jump into the product development exercise.