The Business Model Canvas
This is part 2 in my series explaining the different sections of a Business Model Canvas.
Not sure what that is? A Business Model Canvas is a short cut business planning tool. Here’s a cool short video from Strategyzer that explains it very simply. As Strategyzer put it ‘you can use the canvas to describe, design, challenge, discuss or pivot your business model’. (Hub members: Amanda Shovelton, VIP member and small business specialist at Nat West Bank came to the Guildford Hub last month to give a workshop on the BMC. If you are a Hub member you can watch that session back and download a canvas from our Business Hub Members Group on Facebook
Part 2: Customer Segments
I wrote recently about the Value Proposition section of the Business Model Canvas. The value proposition will change for each customer segment so In order to define a successful value proposition you need to be very clear who your customers are.
At the Business Hubs we find that the issue of defining customer segments comes up at almost every one of our meetings. It is an absolutely fundamental piece of the business jigsaw to have in place. All marketing and business strategy should come from a place of total understanding of your customers. Who are they, where are they and what defines them as likely customers for your product or service? Does your business have one customer segment or several?
You really need to think hard about your customer segments. DON”T think ‘Well, OK but I don’t need to do this as EVERYONE is a potential customer for me!’
This is the most common mistake that business owners make – the assumption that the wider the customer net the better.
The reverse is usually true.
Small niches with very well defined customer segments work really well. When the niche becomes successful you can expand out into another niche if you need to.
An example: My first business was in sports underwear for female skydivers. It was designed to be slimline enough to be worn under jumpsuits but be robust and attractive enough to be worn alone when the hot nylon jumpsuits came off in between jumps. I sourced lycra mixes in colourful designs then had the underwear made in a factory in Cornwall and sold it directly to the end user at festivals and events. The niche was so well defined – and I knew it so well – it pretty much sold itself. As the business grew I looked for other markets where women would want the same kind of funky looking yet robust sporty underwear and moved out into the equestrian and then tennis markets. We put ball pockets in the pants for the tennis market and this line went on to be by far the most successful.
So if you are one of those many business owners that thinks their product or service is for ‘everyone’ , think again!
Still not convinced?
Jonathan Howkins – owner of the Farnham Hub – is a Facebook advertising specialist and trains business owners to understand their customer segments fully before they start to pay for advertising. He has written a blog on defining your customer segments using avatars. An avatar is a precise description of an ideal customer. The blog is called ‘the 16 key questions to answer when creating your customer avatar’
If you have your customer avatar already and you want to learn how to create really targeted Facebook advertising, Jonathan is speaking at the Guildford Hub this Monday, 16th October.BOOK NOW