Hafa Adai and welcome to Strive’s first series post. For the next four weeks we will be unpacking the Business Model Canvas (BMC). We will be identifying the nine components of the BMC in increments of three and then an application post so that you can see it in action.
What is the BMC?
The BMC is a visual representation of your business, a snapshot if you will. It is comprised of nine components: (1) value proposition, (2) customer segments, (3) channels, (4) customer relationships, (5) revenue streams, (6) key partners, (7) key activities, (8) key resources, and (9) cost structure.
I was taught to use the canvas in the order listed above, but I find that I have better luck filling in the information differently. So, that’s how I’m going to introduce it here. However, if it doesn’t work for you by all means use the order listed above or fill it in the way that makes sense to you. The order doesn’t really matter. What’s important is understanding what information each component is asking for.
In this post we are going to identify the value proposition, customer segments and customer relationships. At first glance the vocabulary may seem unfamiliar and intimidating, but we’re going to break each component down and make them your best friends.
Click here to download the-business-model-canvas.
The value proposition is basically the value that you are delivering to your customers. In this section of the BMC, you write in the perks your customers receive by using your service/product based on the obstacles that the customer faces in doing a “job”. In essence, your value is how you are solving a problem for the customer.
You will probably offer different value to different customer segments, which we will dive into next. However, to identify your value proposition for individual customer segments there is the value proposition canvas (VPC). More information about the value proposition and the VPC can be found in this post.
The next section that I like to fill out is the customer segments. This segment identifies different types of customers that your business is targeting based on the value that you are providing.
Sometimes, I know my customer segments before my value proposition and will start from this section and then move to the value proposition. Just another way you can fill out this worksheet.
Your customer segments should be specific groups of people and you can identify them in many ways. You could start with types of people (niche), such as tourists, military wives, or movie goers. Or you could start with age groups and gender. For example, 18-24 year old males, or 50-65 year old females. You can also divide customers by income levels.
Or you can combine all of these techniques.
When you combine all of these techniques you are beginning to create your customer avatar. Customer avatars will be discussed in a future post.
Customer Relationship is the type of relationship that your business is going to have with your customer. Kind of self- explanatory, huh? Just kidding. Basically, this is the part of the model where you decide how you want to interact with your customers.
Are you going to be face-to- face? Personal? Direct? Or are you going to be indirect? Impersonal?
There are many relationships that you can have with your customers, and you could have more than one. For example, you could have one type of relationship with one customer segment or product line and another relationship for another customer segment or product line.
So, now we know the value proposition, customer segments, and customer relationship. In the next post we will be covering channels, revenue streams, and key activities. Thanks for reading and if you want the next post sent straight to your inbox, don’t forget to subscribe.
Go forth and shine.