Entrepreneurship 101: Understanding Business Model Canvas - Customers

In the previous post we talked about the importance of Value Proposition and why you should emphasize on the core value of your idea or solution. For this post we'll talk about the importance of customers. And no it's not only about the Know Your Customers (KYC) as they call it. As an executive, one needs to go that extra mile to understand your customer.

Customers in Business Model Canvas

With the value proposition in mind, you need to now venture out to the find the right customer who would use it. And it is isn't easy as it looks or sounds. Your customers may be hidden somewhere and you would need to put in a lot of effort to find the right customer. The customers bit of the business model canvas depicts the list of customers your solution/idea would be catering to. The list can be either an individual customer or an institutional customer or both based on your offering. When you identify your customer, you can effectively make your marketing communication. 

One of the characteristics of the customer you would definitely want to understand is their aspirations. You can easily understand their problems, their needs by means of surveys. But the customer aspirations are something that are/might be missed by the company. And that small miss can backfire and cause severe damage.

Customer Aspirations - Tata Nano Example

One of the examples for this could be Tata Nano. Dubbed as the cheapest car in India, it was a failure. They were able to sell a few units, but eventually the production line has been dry for the past few months. Even when a customer plans to upgrade from a two wheeler to a four wheeler, the car is no more a mode of transportation. It becomes a status symbol. A customer would look for all the luxuries, comforts in a car. Car being one thing that most of the people would buy only once in their lifetime, would want to make the best choice. At the price point, the Tata Nano was possibly bang on. However the facilities, accessories provided weren't meeting the customers aspirations.

Tata Nano. Image Courtesy: AutoCar India.

Example Business Model Canvas - Customers

Let's look at the business model of Uber again. In the last post we saw the Value Proposition of Uber. In this post we shall look at the customers of Uber. Below is the Business Model Canvas of Uber and their customer group. So if you observe, Uber actually targets two groups of customers. First being obviously the people how are in need of transportation. Second one being the people who are willing to drive and join their platform. With the target group defined, it is easy for Uber to develop and share their marketing communication.

Business Model Canvas of Uber. Image Courtesy: Business Models Inc
That was all about the customers in the Entrepreneurship 101: Business Model Canvas - Customers. In the next post we shall discuss the Channel aspect of the Business Model Canvas. How do you think you can identify your customers effectively in the business model canvas ? Mention in the comments below.

Entrepreneurship 101: Understanding Business Model Canvas - Customers Entrepreneurship 101: Understanding Business Model Canvas - Customers Reviewed by The Executive on April 21, 2019 Rating: 5

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