Define Your Business Value Model

Start With Your Value Proposition

Your Value Proposition is the key element in your business model.

It’s your offer, and to be successful, it needs to be an Irresistible Offer.

You need to create a separate Value Proposition for each customer segment because each customer segment represents a different job executioner with a different required outcome.

The value proposition needs to offer a solution to your customers’ unmet needs, their most pressing pain points.

Your job is to state as clearly and as simply as possible, how you will give amazing value in providing that solution.

The message you need to get across in your offer needs to contain these parts:

  • A high ROI – return on investment. The pain of the payment must be totally overwhelmed by the perceived value of the gains your offer provides.
  • Risk reduction – what guarantees do you offer?
  • Believability – can they trust you to deliver on your offer?

“If you can’t snap your fingers and turn your product into a great one, then add something that makes it great. Add some service, feature, or benefit—anything that will make your offer a truly great deal for the customer.”
Joyner, Mark. The Irresistible Offer.

Your Value Proposition sits in the centre of your business model. Like this, right where it belongs:

The Business Model Canvas from Strategizer.
The Business Model Canvas helps you define the strategy you will use to create value in your business

Using The Business Model Canvas to Explain Your Strategy

Using the colour coding in the Canvas above, you can see that there are four main areas:

  • green – the Value Proposition, your offer.
  • blue – customer-related elements of your plan.
  • yellow – the infrastructure used to create value.
  • white – cash flows.

The blue, green and white areas must all directly relate to the Value Proposition.  Here’s an example:

Business Model Canvas Relationships
Business Model Canvas Relationships

For more background on the nine key elements and drivers of your Business Model, I recommend Alex Cowan’s page

Types of Business Models

Which one best suites your business?

A. Product-Focused Business

Use this checklist if your business model involves the production and/or distribution of products – either physical or virtual.

Examples of product-focused models: Manufacturing, wholesale and retail businesses.

B. Problem-Focused Business

Use this checklist if your business model involves helping people with a service that solves problems.

Examples of problem-focused models: Consulting, professional services, trade services.

C. Platform-Focused Business

Use this checklist if your business model involves platforms and/or networking that creates value by facilitating exchanges between two or more interdependent groups.

Examples of platform-focused models: Facebook, Uber, AirBnB, business portals, associations, software platforms, marketplaces.  

How Can We Help?

We’re happy to talk with you if you would like to follow up in more detail with any of these topics:

  • Defining your market niche
  • Defining your business goals – your ultimate exit strategy.
  • Defining your Value Proposition, your Irresistible Offer.
  • Assessing your best Business Model type
  • Creating and setting up your Business Model Canvas, complete with segment relationships.

Contact us.

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