For which stakeholders are you creating value?
The Commercial Dimension
In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviors, or other attributes. Some examples of different types of segments include: mass market, niche market, segmented, diversified, and multi-sided platforms/markets…[continued below]
The Impact Dimension
Social enterprises can have at least two different (though potentially overlapping) categories of customers – those wanting to purchase their goods and services (i.e., commercial customers) and those wanting to support the social impact that they generate and/or potentially benefit from this impact (i.e., the impact customers). Understanding these two key customer segments is critical to understanding a social enterprise business model. It can be helpful to distinguish commercial and impact customers to see a full range of possibilities, test assumptions, and design for innovation… [continued below]
Professor Sarah Soule explains the goal of the stakeholder segments block, and poses questions for you to consider as you think through strategic options for your venture. She will discuss the example of Equal Opportunity Schools, a national nonprofit organization with both earned income and philanthropic support. (2:50)
Design Prompts
- Who are the main Stakeholders types?
- Are there particular “segments” within each Stakeholder type?
- Describe the Stakeholders type(s) and/or segment(s) and explain the need you are addressing for each? What are their main drivers and behaviors?
- Do some stakeholders assume several roles, e.g. are your customers also beneficiaries, are your founders also investors?
For-profit example
d.light
Stakeholder segments:
- d.light team focuses on quality support and service with a commitment to stand by its warranty [c]
- d.light team values connection that produces empowerment to enjoy freedom and an improved quality of life [i]
d.light sells solar energy solutions to populations without electricity in 60+ nations. See project description and its Impact BMC
Nonprofit example
Equal Opportunity Schools
Stakeholder segments:
- EOS team provides direct assistance through consulting [i]
- EOS team co-creates action plans with school leadership [i]
- Impact reporting and sharing of learning and best practices with partners [i]
Equal Opportunity Schools helps minority and low-income high school students succeed in AP and IB courses. See project description and its Impact BMC
i = Impact dimensions, c = Commercial dimensions, b = Both dimensions
More about The Commercial Dimension
Customer groups represent separate segments if:
- Their needs require and justify a distinct offer
- They are reached through different distribution channels
- They require different types of relationships
- They have substantially different profitabilities
- They are willing to pay for different aspects of the offer
More about The Impact Dimension
It is important that clients, beneficiaries, or constituents are co-creators of solutions. If government funders and philanthropists are customers, then we will need to be clear about the value proposition we are putting forward to them and to build a relationships with them that ensure their ongoing custom.
For some businesses the social benefit generated accrues to others than customers willing to purchase services. Recipients of free or heavily sponsored products or services are an obvious example. All stakeholders present an opportunity to provide social value: volunteers, employees, local communities, suppliers, philanthropists, government structures
Deep dive
- Osterwalder, A., & Pigneur, Y. (2009). Business Model Generation. New Jersey: John Wiley & Sons, Inc. See pages 20-21
- Burkett, I. Using The Business Model Canvas for Social Enterprise Design. See pages 15-17
- Calderon, J. The Social Blueprint Toolkit. See page 13