Welcome to the final issue of the year on the "Customer Segments" building block of the business model canvas.

By the end of this issue, you will have a better understanding of:

• The importance of the "Customer Segments" building block in the business model canvas

• The different types of customer segments and their characteristics

• Real-life examples of each type of customer segment

• How to apply these strategies in your own business

Estimated read time: 3 minutes

The building blocks of the business model canvas

1. Key Partnerships

2. Key Activities

3. Key Resources

4. Revenue Streams

5. Cost Structure

6. Value Proposition

7. Channels

8. Customer Relationships

9. Customer Segments

Types of Customer Segments

The "Customer Segments" building block of the business model canvas refers to the different groups of customers that a company targets with its products or services. These customer segments can be defined based on various factors, such as demographics, geography, behavior, or needs. In this issue, we will explore the different types of customer segments and provide tips and strategies for identifying and targeting the right customer segments for your business.

Types of Customer Segments:

• Mass market: This type of customer segment refers to a large and diverse group of customers that has a broad range of needs and preferences. Companies targeting mass markets often offer products or services that appeal to a wide range of customers.

• Niche market: This type of customer segment refers to a small and specific group of customers with specialized needs or preferences. Companies targeting niche markets often offer products or services that cater to a particular group of customers, such as vegan or gluten-free products.

• Diversified market: This type of customer segment refers to a company that targets multiple customer segments with different products or services. This can be accomplished through different brands, channels, or pricing strategies.

Real-Life Examples

Here are some real-life examples of companies targeting different customer segments:

• Mass market: Walmart is an example of a company that targets a mass market. The retail giant offers a wide range of products and services that appeal to a diverse group of customers, including groceries, clothing, electronics, and home goods.

• Niche market: A company that specializes in vegan and gluten-free baked goods is an example of a company targeting a niche market. The company's products cater to a specific group of customers with specific dietary needs or preferences.

• Diversified market: Procter & Gamble is an example of a company that targets a diversified market. The consumer goods giant offers a wide range of products across multiple brands and customer segments, including beauty, home care, and personal care products.

How we did it?

Early in 2016, we recognized the opportunity to offer management training programs to help individuals in large enterprises and government agencies advance their careers and improve their skills. While these customer segments were important to our business, they were not necessarily our best customers.

That all changed when we identified a new customer segment - corporate academies. These organizations were seeking high-quality, customizable management training programs to offer to their employees, and they were willing to invest in our services.

We developed targeted marketing and sales efforts to reach this customer segment, and it paid off. Our partnership with corporate academies has driven 5X growth for our business, and it has helped us reach a wider audience and make a bigger impact.

We attribute much of our success to our focus on identifying and understanding the specific needs of our target customer segments. By continuously gathering feedback and refining our training programs to meet the needs of our customers, we have been able to build strong, long-term relationships and drive significant growth for our business.

You can apply this

Identifying and targeting the right customer segments is crucial for the success of any business. Here are some tips and strategies for applying these concepts to your own business:

• Define your target customer segments: Start by defining your target customer segments based on factors such as demographics, geography, behavior, or needs. This will help you understand who your ideal customers are and what they are looking for.

• Conduct market research: Conduct market research to gather more information about your target customer segments. This can include surveying customers, analyzing industry data, or conducting focus groups.

• Customize your marketing efforts: Customize your marketing efforts to appeal to your target customer segments. This can include using targeted advertising, personalizing your messaging, or offering customized products or services.

• Monitor and adapt: Monitor and adapt your customer segments and marketing efforts as needed. This may involve updating your customer segments based on new data or changing your marketing strategies based on customer feedback.

TLDR

In this issue of the business builder we:

• Discussed the importance of the "Customer segments" building block in the business model canvas.

• Explored the different types of customer segments, from mass-market to diversified, and provided real-life examples of each type.

• Gave tips and strategies for building strong customer segments strategy in your own business.

If you found this issue useful, share it with your fellow business owners and invite them to subscribe to the business builder.

If you tweet a link to this issue and tag @luqmanshantal, we will send you a list of ways to apply these strategies in your own business model.

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- Luqman