Innovate Your Events Through The Business Model Canvas by @djstomp
I really love the book ‘Business Model Generation‘ by Alex Osterwalder. It’s great to map out your business, and to keep track of how the different aspects of your business interact with eachother. I use the Business Model Canvas (BMC) for mapping out my start-up businesses and feel confident to say it’s great guidance to understand how your business actually works. It appears to me like very applicable on events. Especially because there is so much to do lately about ROI for events. The model forces you to make your value propositions transparent and thus more measurable.
So let’s take a walk through the model and see how it can be of any value to innovate your next event.
About the BMC
The BMC is a strategic and entrepreneurial tool to help you look at your business in a simple and structured way. It empowers you to challenge the different assumptions of your business and invites you to explore new angles, designs and formats. It’s very powerful in describing the dynamics of your business. That will help you during team alignment, finding sponsors and detecting possible bottlenecks in execution.
Describing your business using the BMC
The single most cool quality of this method is the very natural way to describe your business in 9 components.
For all of your different (1) customer segments you have a different (2) value proposition. You’ll need – one or more – (3) channels to reach these customer segments, and you’ll establish (4) customer relationships. In order to deliver your value proposition you have to perform some (5) key activities, using some (6) key resources. For all the activities you can’t manage internally you’ll need some (7) key partners. To conclude of course you’ll have (8) costs and you create (9) revenue streams.
Mapping your event
Start with defining a value proposition you have for a specific customer segment and gradually fill in the entire BMC for that proposition. As you’ll see later on, the BMC consists of reciprocal layers.
Let’s suppose we start out with one (1) customer segment: tech savvy eventplanners. Our (2) value proposition can be ‘mobile event apps: state of the art information’. There are several (3) channels to reach these customers. We can choose different channels for raising (a) awareness, to let eventplanners (b) evaluate the value proposition and eventually (c) purchase it. There’re channels needed to (d) deliver the value proposition and finally we want to provide (e) customer support through certain channels.
To keep things simple, let’s say we use good old printed materials for ‘a’, ‘b’ and ‘c’, and a face to face meeting for ‘d’ and ‘e’. The (4) customer relationship we wish to establish will be transactional (to keep it simple again). People visit the event, and that’s it. In order to make the event successful our (5) key activities will be limited to: gaining publicity, sell tickets, get sponsors, and in general project management. The (6) key resources we need are basically a skilled team. Of course we can’t do it all by ourselves, we will need (7) key partners. We definitely need sponsors, caterers and speakers. To keep the (8) cost structure simple let’s assume we just have operational costs and marketing costs. The (9) revenue will come from sponsors and ticket sales.
Take a look at the current model, this is a global overview of your business.
Adding new layers
Now that we have the basics, we can take the next step and add a new layer.
Let’s assume we see our sponsors as a new (1) customer segment. Our (2) value proposition for this sponsor could be ‘provide exposure to target audience’, and we just use printed materials as a (3) channel. We want to build a long-term (4) relationship with our sponsor. We’ll need a sales force (6) to take care of that, so their (5) key activity would be get sponsors aboard. The (8) costs for getting the sponsors we can either differentiate of group them under operational costs. I’ve differentiated them to illustrate the model. Depending on what the sponsortype is we generate (9) revenues, either money of savings on expenses if it’s a barter deal.
Let’s have a look at the model now. Notice the different colors for each segment. Now we have extracted a specific part of our businessmodel. We can easily monitor what’s needed to create and deliver the specific value propositions and what the ROI is. Expand the model with more customer segments or more value propositions to gain more insights and overview of the business.
And what’s next?
Well, after you have finished your model, it’s time to experiment. You can start by changing parameters. What will happen if you eliminate certain revenue streams, what if you would use different channels, establish different relationships, change your value propositions? What will happen if you would have different resources, different partners? This is a really great exercise in thinking out of the box and challenge your own routines in event planning.