Customer Segments

This area of the business model canvas is all about who the company’s customers are. The customer groups are closely linked to the second area of the canvas, the customer benefit or value proposition. Ultimately, the customer decides in favour of the offer because they want it to solve a problem.

Companies must answer the question: for whom does the offer create added value? A number of criteria are available for defining the target group. When defining the target group, a distinction is made between private customers (B2C) and business customers (B2B).

As a rule, there is no „one“ target customer for the offer, but rather different customer groups or segments. The different customer groups focus on different features of the offer when deciding whether or not to make a purchase. Therefore, the second important question in this area of the Business Model Canvas is: which customer group(s) is/are the most valuable? The following questions help to assess the term „valuable“: Which target customers generate the most revenue, which customers are particularly loyal and which are particularly profitable? These questions can be answered well with the ABC analysis.

Based on the customer groups, it becomes clear in which markets the company is active: either in the mass market or, for example, in a market niche. And which strategy should be pursued: cost leadership or specialisation.

To summarise, the most important questions are
Who buys my product?
What characterises my target group?
Which customer groups are the most valuable?
Which strategy do I pursue in which customer group?