It can be a challenge to align your marketing with the broader business. Marketing can become even more of a challenge with a large organisation where the business model can become rather complex
Luckily, there is a great tool available that can help you to layout your business model on a single page. That tool is called the Business Model Canvas. Read on to find out what the Business Model Navigator is and how it can help your marketing.
What is the Business Model Canvas?
The Business Model Canvas (BMC) is a strategic management tool created by Alexander Osterwalder in 2005. You can use this tool to develop and document new and existing business models. The Business Model Canvas often takes the form of a one-page template featuring nine boxes.
Why use the Business Model Canvas?
The Business Model Canvas allows you to plan out a business model on a single page quickly. Since you plan out the business model on one page, it is easy to get a clear, top-level overview of the organisation. You can then use the insights you gain from the BMC in other areas of the business.
How can the Business Model Canvas be used for marketing?
When planning your marketing strategy, it is crucial to understand the business plan. The Business Model Canvas allows you to communicate the core elements of the business model to the team responsible for creating the marketing strategy.
The Business Model Canvas is useful for businesses or in-house teams. However, the BMC is also helpful for marketing consultants and agencies to better understand their clients’ business models.
How to use the Business Model Canvas
To use the BMC, all you need to do is complete the nine boxes in the template with information about your business model.
The nine elements of the Business Model Canvas
The nine boxes used in the Business Model Canvas template correspond to nine elements of a business model. These nine elements are grouped into one of four categories: infrastructure, offering, customers, and finances.
Infrastructure
Key partners
Key partners refer to all organisations or individuals with whom you have a business alliance. Examples of key partners include suppliers, distributors, sub-contractors, importers, service providers, and complementary businesses with whom you partner.
To use this for your marketing, think about how you currently communicate with each of your partners. Can you improve your comms with partners? Possible marketing ideas for partners include collaboration on content, or you could contribute content to your partners’ websites. You could even do something as simple as mutual ‘shout outs’ on social media platforms.
Key activities
Key activities are the business activities critical to delivering on your value proposition. For example, a supermarket needs to ensure they have a cost-effective and efficient supply chain to keep costs down and maintain fully stocked shelves. If necessary delve into the actions required to complete the key activities successfully.
The key activities you identify may be suitable for content marketing. One example would be ‘behind the scenes’ content. Often, your target would appreciate an inside look at how your organisation operates. If we take Tesla as an example, many of their fans and customers will find the production of their electric vehicles and the development of their technology interesting.
Key resources
Key resources are the assets required to be able to achieve your key business activities. Resources can take many forms, including physical, financial, human and intellectual.
Your key resources can be used for marketing. Of course, financial resources can be used to fund marketing activities. However, physical, human and intellectual resources can also be used for marketing. People can be a great resource. If you have experts in a particular field, they can produce insightful thought leadership content for your website and social media. Physical and intellectual resources can also be used for content marketing.
Offering
Value proposition
Your value proposition is the value that you are providing to your customers. Which problems are you solving for your customers, and which of their needs are you satisfying. The characteristics of your value proposition can include:
- Newness
- Usability and convenience
- Customisation/Personalisation
- Performance
- Design
- Brand or status
- ‘Getting the job done’ or effectiveness
- Price/cost
- Cost reduction
- Risk reduction
- Accessibility
Remember that your value propositions can be quantitative and qualitative.
Identifying your value proposition is vital for your marketing and communications. When building your campaigns, think about how you can incorporate your value proposition into your comms. You want to clearly communicate to your audience what makes your organisation different to its competitors, and the value that your offering provides.
Customers
Customer relationships
The customer relationship section refers to the types of relationships your organisation has with its customers. Think about how you will get more customers, how you will keep your customers, and how you can grow revenue from your existing customers. Some of the types of relationships you can develop with your customers include:
- Personal assistance in the form of direct employee-customer interaction
- Dedicated personal assistance is more hands-on for a small subset of customer than just ’personal assistance’
- Self-service is a relationship where the organisation is hands-off and provides the tools for the client to provide the service to themselves
- Automated personalisation of services
- Communities allow groups of customers to interact and provide value to each other, as well as the organisation providing value by facilitating the community platform
- Co-creation is where the customer directly has input into the service they receive
Understanding customer relationships is important for your marketing. For example, if you provide ‘dedicated personal assistance’ to your customers, you could use this as a benefit, communicating this service throughout your content, website and advertising.
Channels
Which channels are you using to provide value to your customers? How are you using the various marketing channels to communicate with your customers? Channels to consider include:
- Physical stores
- Website
- Search engines
- Social media
- Television
- Radio
- Printed publications
- Forums
- Affiliates
- Direct mail
The channels that you use to provide value to your customers are vital for your marketing. For example, your website is an important marketing channel if you use it to provide valuable information to your customers. In this situation, you will also want to look at the channels link to your website for more opportunities, such as search engines, social media and affiliates.
Customer segments
To complete the customer segments box, you need to identify the different types of customers you have. Once you have listed the different types of customers, you need to determine which of these groups are the most important. You can use this information to plan your marketing approach, e.g., mass marketing or niche markets.
Customer segment insights can be used to build personas of your target audience. This information can then be used to refine which channels you use to market, optimise your website and your improve your content based on your specific audience’s wants and needs.
Finances
Cost structure
When it comes to costs, identify the expenses necessary to deliver your key business activities. Identify which of your resources and activities are the most expensive.
You should think about whether the business model is costs-driven or value-driven. Costs-driven generally means focused on lower costs at the expense of quality (budget). Value-driven often means focused on high quality (premium) but typically comes with higher costs.
The costs structure box is also where you should identify any economies of scale and economies of scope.
Cost structure can also be used to improve your marketing. For example, depending on whether the business model is costs-driven or value-driven will impact whether you are market your offering as a budget-friendly option or whether is a high-end premium solution.
Revenue streams
Revenue streams refer to the most important ways your business model will generate income. Take a look at what customers are currently paying and what they would be willing to pay. How do your customers pay and how would they prefer to pay? Work out the relative difference between your revenue streams. Which sources of income contribute the most? Note down whether you will be using fixed pricing or dynamic pricing.
Some examples of revenue streams include:
- Asset sales
- Usage fees
- Subscription fees
- Renting
- Advertising
Understanding how your organisation actually monetises is vital to a successful marketing campaign. Identifying where revenue could be increased and where you should focus your marketing efforts is the difference between a positive or negative ROI.
What next?
After you have completed your Business Model Canvas, it is time to take a step back and look at your business model holistically. Can you see any marketing opportunities now that you could not see before? You can also use the completed BMC template to double-check any marketing initiatives against to ensure you align your marketing with the wider business’ priorities.
Download our Business Model Canvas template
So, you want to get started using the Business Model Canvas for your organisation or idea? Instead of making one yourself, we have a prepared a hand Business Model Canvas template for you to use. Click on the links below to download either the Word/.doc version or a PDF version.
Download Word/.doc template for the Business Model Canvas
Download the PDF template for the Business Model Canvas
Wrapping up
To sum up, the Business Model Canvas is a tremendous strategic management tool. The BMC provides an overview of your business model, which you can use to inform your marketing strategy.
If you would like any help with your digital marketing strategy, you contact us about our digital marketing services by emailing hello@emiquent.com.
