Last week’s session of the Female Founders Accelerator focused on the Business Model Canvas and Value Proposition.
Business Model Canvas
The Business Model Canvas is a fantastic tool for reviewing the health of a business. The canvas divides the business into 9 key areas enabling a quick, easy and accurate overview of the entire business. To get the most out of the canvas it is important to revisit it every year or two to make sure your business is on track and still relevant in the ever changing market place.
I was introduced to the Business Model Canvass when I took part in Hatch’s incubator in 2017. Last year I found it most useful in honing Butter Nut’s Unique Selling Points (USP). I was excited to revisit my canvass a year later with fresh eyes and a ton more experience and find out what had changed.
Kate Gray who led the session is a straight talking vivacious businesswoman. She focused her talk on the Value Proposition segment of canvas and the importance of understanding our customers.
A Value Proposition describes the values your customers attach to your product or services. These values are the reason they choose you over a competitor. These can be anything from customer service to availability, ease of use to quality of product, and variety.
To be able to identify the value I offer Butter Nut’s customers I need to know my customers better and understand what motivates them to buy from me. Kate had a couple of book and website recommendations for the group which I have posted at the bottom of this article.
Kate’s talk made me realise that although I thought I knew the reasons my customers buy my nut butters, I was not certain. And we all know that assumptions can be very very wrong. I needed to drill down into it and make sure I understood. But where to start?
So I set my self a task. For the last week and a bit I have simply been asking my customers at the end of a transaction “If you don’t mind I’d love to know, what made you decide to buy from me today?” Some people were easily able to articulate their reasons, others less so.
I was thrilled to find that the responses supported what I had written in my Value Proposition (flavour, quality, ethics, etc.) I had hit my mark! However, it left me pondering, if I am getting all of this right why is it still such hard work to attract potential new customers?
Knowing Your Customer
On the Butter Nut stall at Borough Market I cast my net wide and invite everyone to try a sample of my nut butters. This approach whilst it does deliver substantial results is not as effective as it could be. The conversion rate from tasters to sales remains stubbornly lower than I would like. On a busy day of sampling I sometimes feel frustrated and like I am giving all my hard work away.
On these days I make an effort to remind myself that I know not every person I invite to sample will want to buy my product. Many are looking for free food whilst others who are genuinely interested in the nut butters may prefer to stick to their £1.50 jar of palm oil filled, sugar saturated, supermarket own brand. And that is ok!
I am not trying to make a product that appeals to everyone. I am endeavouring to make a fantastic tasting, ethical product of superior quality for those that care.
Go as targeted as I can. Once I know and understand my primary customers I need to look closely at the people who are similar to them. Then I can work on how I might appeal to this secondary group. And so on and so on.
Her approach reminded me of a book I have had on my shelf for a number of years and still meaning to read; Seth Godin’s Tribes!
My wide net and subsequent disappointment has forced me to question what I currently know about the people who buy my nut butters. If I am honest, the answer is not as much as I would like!
- What is the gender split of my customers?
- Which age range does my product most appeal to?
- What is the age range of the people that buy?
- What kind of clothes do they wear?
- Which type of jobs do they have?
- What type of activities do they like to do in their free time?
- What matters more that the product is delicious, nutritious, or ethical?
- Other types of groceries my typical customer purchases?
- Where else (other than Borough) do my customers like to shop for food?
Kate was keen to point out that maybe one of the biggest things we might get out of the Female Founders Accelerator is the realisation that we need to make some big changes to our product or service.
If this is the case she emphasised that it is not something to be ashamed of. The reason the 14 of us are here on the accelerator is to learn how to create and run sustainable businesses that provides jobs for others and offers value to our customers.
She has a point. No one wants to put all their time and energy into creating a product or service that nobody wants!
Websites (for business insights):