The first tab, labeled "1. Start", is the default starting location when either a new model is created or when an existing model is opened in value modeling.
The Start tab is where you begin to define the scope of your model by providing crisp answers to the following three questions:
- What is your Offer?
- Who is your Customer?
- Who is your Competitor?
Enter or edit the name of your offering, customer, customer unit, and competitor in each text box, respectively.
The yellow sticky note icons (to the right of each entry field) can be used to enter more detailed information.
With a clear idea of your offering, customer, customer unit, and competitor, you can construct an accurate model that identifies the true value your offering provides a specific customer or segment.
Offering refers not only to your core product or service, but also any associated services, terms, and/or access that you provide to the customer when they purchase your core product or service. This is sometimes referred to as a "solution" or a "bundle."
Your Customer is the consumer of your offering. For the purposes of each Value Model, your customer should be a specific individual, firm, or market segment. Avoid being too general or vague in describing the customer. It’s much easier to quantify value if you focus on a specific customer.
Competitor refers to the next best competitive alternative (NBCA) that this customer would use instead of your offering. Identifying the correct alternative is crucial, as it determines how you will analyze your offering's points of differentiation, as well as the amount of economic value it provides the customer.
Ultimately, the correct alternative is based on the customer's perception. For example, if you were creating a value model for a rental car company, your competitor may be another rental car company. However, depending on the target market or customer, there may be other preferable alternatives, such as public transportation, taxis, or ride share services. Differential value of a rental car will definitely shift as I compare it to each of these options.
A common unit of measure must be used to present the value of your offering against the competitor, or current process. The customer unit is the metric by which the customer will compare your offering versus the competitor or current solution/process.
Note that this unit will likely be different from the way the customer would purchase the competitive alternative or your offering. More units of measure can be accessed by clicking on the "more units" link below the relevant text box.
Units of measure are an important enough topic that a separate section is dedicated to it in this knowledge base. See Units of Measure.