Lesson 3: Business Model Canvas

What You’ll Learn: When it comes to transitioning an idea into a business, the Business Model Canvas is one of the fastest and best ways to think through your business before you spend a dime. It offers a time-saving shortcut to the traditional business plan process and will quickly give you insights into the viability of new your idea. 

Business Model Canvas (continued)

Customer Segment

You can pull these straight out of your Ideation Stage exercise. Customer segments are the groups of people or businesses that have a problem that your product or service will solve. You can take your existing customer base and break them down further into geography, gender, age, behaviors, preferences, interests, etc. so that you can meet their needs with even higher specificity.

As you look at your customers/audience, stack rank them to see who you should focus on first and who you can focus on later or ignore altogether. Once you have the segments, create customer personas for each. This persona can include their worries and fears, online behavior, professions, influencers, hopes and dreams, desires, and what would make their life easier.

 

There are several ways to look at your customer segment:

  • Mass market: This model doesn’t break customers into segments. Instead, it focuses on the general population or a large group of people with similar needs, such as mobile phones.
  • Niche market: This is focused on a specific group of people who have something in common, such as runners who buy athletic shoes.
  • Segmented: This would be a market that has slightly different needs, allowing you to create various groups from the main customer segment.
  • Diversified: Just what it sounds like, a segment composed of customers with very different needs.
  • Multi-sided: This model serves interdependent customer segments with different products or services (think credit card companies who have businesses and consumers as customers).

Customer Relationships

Now that you have your customers segmented, it’s time to think about the type of relationship you will have with each and how you will interact with them.

  • Personal assistance: Interaction with a specific customer is by email, phone or other direct means, including in-person interactions.
  • Dedicated personal assistance: A dedicated representative – think sales rep or personal shopper – is assigned to a customer or customers.
  • Self-service: The customer helps themselves, but you’re available if they have a question or need support.
  • Automated services: The transaction is digital, electronic or delivered by a machine. ATMs are a good example.
  • Communities: Customers help one another solve their problems or address their needs. Gaming forums are a good example.
  • Co-creation: Customers are involved in the creation of the product or service. YouTube would be an example of a relationship that is co-creative.

If the relationship is unclear, a journey map may help. It will help you identify the various stages customers will go through when interacting with your company. It will also help you get a sense of how you will acquire, retain and expand your relationships with your various customers.

 

Journey Map

 

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