This post is the first of a series I will do about online marketing.
Overall
The Value Exchange Canvas describes the basic function of any business and helps you to understand how to do business, marketing and communication. The model will help you to determine the basic building blocks of your own value exchange model. By evaluation of these rudimental aspects you can improve what is needed to have an effective value exchange and hereby grow your business.
In essence a business is a platform to do value exchange by two parties. This aspect sounds probably so familiar to you that you are not aware of what that actually means and what implications it has. After reading this blog and understanding the value exchange you will!
Value
To be able
to understand value exchange we need to take a step back to the period when goods
were traded between persons without the influence of money and businesses.
The figure above shows us a situation of two persons having something valuable to the other. A
farmer grows grain and a baker creates bread of out of grain. Without the grain
of the farmer the baker cannot create bread and without the bread the farmer
cannot eat. So here we have it. The basic need of doing an exchange!
Two valuables
are being exchanged for another. Hereby a win-win situation is being
established. The two goods contain both a certain value that is equal to the
other but is manifested in another form. So by doing a value exchange you
actually keep your original value but change it in to another form. Like energy
we can swap the value of goods and services into another shape but keeping the
same intrinsic value. You can have warmth energy, fossil energy and wind energy.
They all possess the same ability to deliver work but come in different forms.
Today we
use off-course money in the equation. A typical value exchange would be between
a customer who pays money and a business who delivers a product. We do this for
the simple reason that the ‘money - product exchange’ is a lot more practical than
pure goods exchange. You cannot easily store millions of breads. However money is
nowadays just a figure on your bank account and it won’t deplete after one
week. Money can be sent all over the world and its intrinsic value can be
easily understood.
Still there
is a lot more to say about the value exchange itself. Why would you exchange
your grains for someone else’s bread? Why would you exchange your grain for
bread if you could also exchange it for someone who can make pancakes for you? There
are infinite ways to exchange the value you have to another. Therefore three
important conditions must to be met for any value exchange to be taken place. By
understanding these you can ultimately grow your business.
·
Benefits
·
Trust
·
Proof
Benefits
So why would
you or your customer choose for this particular exchange? The first condition for
an exchange is to have unique benefits coming out of this exchange for both
parties. A customer chooses to exchange his or her money for a bicycle from a
certain reseller because it comes with benefits that the competitors do not
have. Maybe it is a wow color or cool looking tires. On the same time, if the
bicycle reseller sells the bicycle for the same price he bought it from his
suppliers, he would exchange value but not gain any profit.
Financial profit
is the obvious benefit businesses are seeking for. But it can be more. I would
argue that you will think of other ways you can benefit from the deal. Maybe
the customer gives you a good reference or he will give you other goods instead.
Be open.
It is
important to note that benefits are not the same for every person. The person /
customer block is therefore connected with the benefits block. To be able to
create real benefits you have to understand your customer completely. What are
their needs and their problems? What can you do so they benefit greatly from
the exchange with you? The more unique benefits you can add for your customers the
more customers will choose you and thereby the more (financial) benefits you
can retrieve yourself. And this is the essential part of value creation. Keep
that in mind.
This
building block requires you to think about how to create benefits for you
customers and how to communicate them.
Trust
For any
value exchange there must be a certain form of trust between the two parties.
If there is no trust relationship it is simply impossible to do an exchange. Except
if someone points a gun at you. “Give me your money or your life”. In our capitalistic society we still need a basic
trust that the value we give to someone will be exchanged by the value we expected
to get. The more trust we have in the other person, value or benefits, the more
likely the exchange will take place. If you are a start-up company you have the
problem that nobody knows you and thereby trusts you. If you are Apple, however,
you simply put the Apple logo on a shitty phone and people will buy it because
they simply trust you all the way.
Trust is
all about the human part of the exchange. The more people already liked you on
Facebook, purchased your products or are talking about what value you have, the
more people will follow to exchange their value for your product.
I thereby believe
that we never actually buy from websites, machines or companies. In the end we are
programmed to buy only from other humans, and the more human you can make your business,
the easier it is for others to buy from you. So come up with a personal story instead
of hiding yourself behind a template webshop. Ever wondered why brands exist?
This is the answer! Because it’s the only way a big company can be human and
personal. A brand is an artificial way to create a human face.
This
building block requires you to think about how to create a trust-relationship
between your business and your customers and how you will communicate your
trustworthiness.
Proof
The final
condition for establishing a value exchange is the Proof block.
“Ok, so you
say you give me all these benefits with your new product? Prove it!” Only trust
and benefits are not enough to convince someone that this value exchange is a
smart one. Big words and stolen hearts still need proof of all the goodness
before the deal can be closed. The more mutual trust there is the less actual
proof you need to deliver and vice versa. For a start-up company it is crucial to
have proof because much trust has probably not been created.
This
building block requires you to think about how to prove the benefits the customers
will gain from the exchange and how you will communicate this proof.
Template
How can you improve these building blocks for your own business? I created a template for the customer side so you can start a brainstorm or discussion with others. Soon I will update this blog-post with examples about how you can use Video and other online tools to create trust and proof your benefits online.
Contact
If you have any questions about these models or you want to use the pictures please contact us.
info@studiolooklook.com