Your Value Proposition and Customer Segments

When filling out your Business Model Canvas, there is a recommended order to do this. It starts with the Customer Segment and Value Proposition.

BMC2

Understanding your Customer Segments and then your Value Proposition forms the foundation for successfully completing the rest of your Business Model Canvas. In this section, we’ll dive into both components to give you a better understanding and a strong footing for completing your own business model canvas.

📺 Watch the following video to learn more about Customer Segments and Value Propositions.

Customer Segments

Remember, the customer segments box identifies the different groups of users your venture aims to reach and serve. You may have multiple customer segments with distinct needs and characteristics.

Key Questions:

  • Who are our most important customers? For whom are we creating value?
  • What are the different segments we are targeting?
  • What are the demographics and psychographics of our customer segments?

Tips: Be specific in defining your customer segments. Understanding your customers deeply allows for more personalized value propositions and marketing strategies.

Value Propositionss

Your value proposition describes how your product uniquely addresses your customer segment’s problem or fulfills their needs.

Key Questions:

  • What makes you better than others?
  • What value do we deliver to the customer?
  • Which one of our customer’s problems are we helping to solve?
  • What bundles of products and services are we offering to each Customer Segment?
  • Which customer needs are we satisfying?

Tips: Focus on clarity and simplicity. Clearly articulate how your product or service solves a problem or improves a customer's situation. Highlight the uniqueness of your value proposition.

Crafting your Value Proposition

As both resources highlight, a Value Proposition is the unique value your product or service offers to your customers. It’s the answer to the question: "Why should customers choose your product or service over others?”

To craft a compelling value proposition, you must have a clear and specific understanding of who your target customer is, what their pain points are, what your venture offers, and how it helps your target customer address their pain point.

Here’s a simple format to help you craft your value proposition:

For _________________ (insert your customer segment. Be as descriptive as possible). Who _________________ (insert your customer segment’s pain points) We offer _____________ (insert what your product) That helps _________________ (list the benefits of your product has for your customer segment)

Take mPharma as an example. Their value proposition statement will read something like this:

For pharmaceutical retailers and healthcare facilities in emerging markets who struggle with inefficient inventory management, procurement challenges, and inconsistent supply chains, mPharma offers an innovative pharmaceutical supply chain solution that helps improve operational efficiency and reduce costs.