When developing your digital solution, it’s critical to understand how it fits into the political economy of the aid sector. The aid sector is likely to be a significant part, if not all, of your market, so understanding how it is structured and how the customers within it behave is vitally important if you are to have your digital solution adopted, used, and paid for.
A customer segment is the different groups of people your organization aims to reach and serve.
Perhaps the most pertinent factor about the aid sector, similar to other public- and social-sector markets, is that the buyer of the digital solution will often be different from the user, who is often different from the groups and individuals who are ultimately benefiting from the solution. For example, for a medical diagnostic digital tool, the buyer could be the Ministry of Health procurement department, the user could be a local health clinician, and the person who will benefit from it, who is part of the target impact segment, will be a member of the public.
To complete the customer segment building block in your Business Model Sustainability Canvas, there are two key steps that should be taken. In section 2.1, there is information on the importance of mapping the political economy of your market. In section 2.2, there is guidance on understanding your buyer, user, and target impact (BUTI) segments and on evaluating the alignment or misalignment across the BUTI segments.
Section 2.1: Political Economy of Aid
This section provides a short overview of what to look out for within the aid sector and the geography that you are primarily focused on. It offers guidance on how to think about and position sector agnostic solutions.
Key discussion areas:
- Understand the aid sector
- Discuss the funding flows in the sector
- Highlight the key funding features and their impact
Section 2.2: Buyer, User, and Target Impact Segments
This section offers guidance on understanding your buyer, user, and target impact segments. First, identify your BUTI segments. Map out the problems they’re facing and what they might value in a digital solution to those problems. Then evaluate the level of alignment across your customer segments. Develop options for bridging and addressing misalignments.
Key discussion areas:
- Identify the three distinct segments of customers and determine their wants and needs
- Assess the alignment and misalignment of these BUTI segments
Top Tips: Digital Literacy Levels
You should not assume the digital literacy level of your buyer, user, or target impact segments. It can be higher or lower than you would expect. For example, there is significant underinvestment in digital transformation in the aid sector, and many senior managers in aid organizations and governments have low levels of digital literacy. Ensure that you spend time assessing what the digital literacy levels are for each group and develop materials and messaging that can help build their digital literacy as you discuss your digital solution with them.
The political economy of aid has a significant impact on how funding flows and decisions are made in the aid sector.
The customer segment for digital public goods is divided into three segments: buyer, user, and target impact (BUTI) segments.
Unresolved and unmitigated misalignments across the BUTI segments can have a significant negative impact on the adoption of your solution and the sustainability of your business model.
Complete the following in your Business Model Sustainability Canvas:
- Identify your customer segments (i.e., buyer, user, and target impact) and what their key want or need is.
- Highlight any misalignments of wants and needs across the BUTI segments and note where in your business model you might address them (e.g., advocacy activities or changes to the positioning of your value proposition).