The Customer Segments block defines the groups of people or organisations a business creates value for. It is the most important block on the canvas — every other element exists to serve customers.
A business can serve one segment or many. The discipline is being explicit about who you are targeting and making real choices about who you are not serving.
That second part is where most teams struggle.
Five Types of Customer Segments
Mass Market
No distinction between segments. Consumer packaged goods, TV broadcasting. The proposition is broad and the customer base is wide.
Niche Market
A specific, specialised segment. Luxury goods, professional services and specialist software. The proposition is sharp, the segment is small and relationships tend to be deeper.
Segmented
The company serves segments with slightly different needs. A bank might offer standard accounts for retail customers and premium accounts for high-net-worth individuals.
Diversified
The company serves two or more unrelated segments. Amazon serves both consumers and enterprises. That takes real organisational capacity to pull off.
Multi-Sided Platforms
Two or more interdependent customer groups that need each other. A newspaper needs readers and advertisers. One side's value depends on the other side showing up.
How to Define a Customer Segment Properly
A useful segment definition covers two things:
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Who they are: industry, role or behavioural characteristics
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What problem they face: the specific pain your proposition addresses
What most teams skip is the third element: why this group is distinct enough to serve differently from your other customers.
Vague segments like "SMEs" or "young professionals" are almost never useful. Broad segments lead to broad propositions that resonate with nobody in particular.
Questions to Explore with Clients
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Who are you currently serving, and who is your best customer within that group?
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Are there customer groups you serve today that you would be better off not serving?
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What does your ideal customer look like in detail — industry, size and role?
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Are you serving multiple segments with the same proposition? Should you differentiate?
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Who are you currently not reaching that you should be?
Now put it into practice.
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