Channels, customer relationships and key activities

Business Model Canvas for startups: Part 3

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How to create a powerful Business Model Canvas and understand your value proposition, competition and market. 

Gary Fox is an Ecosystem & Platform Design Consultant, Doctoral Researcher on Digital Platform Ecosystems and Lecturer at Cranfield University. Here he talks through the different segment of the Business Model Canvas and how to think about using them effectively. The canvas is made up of nine segments which he will explain. In this part Fox focusses on channels, customer relationships and key activities.




Watch the rest of the series here:

4. Channels

  • These channels include communication, distribution and sales.
  • How do you communicate with your customer? 
  • How do you deliver value proposition?
  • How do your Customer Segments want to be reached?

Customer channels are about how you actually reach your customers and allow them to get hold of your product. This will depend on whether your business is digital, physical, a platform, or service, etc.

Channel options:

  • In-person sales
  • Online sales
  • Own stores
  • In-store sales
  • Partner stores
  • Wholesaler
  • Distributed sales.

After you consider where and how you sell to customers, you also need to think about how you get people to know about your product. How much will that cost? There's the cost to reaching customers and to carry on communicating with them on a regular basis in order to convert. That can include CRM systems to move somebody that's potentially aware of your product to actually buying it. 

5. Customer relationships

  • How does this show up and how do you maintain the relationship?

  • What type of relationship does each of your Customer Segments expect you to establish and maintain with them? In doing this you must consider what is feasible. The way to think about customer relationships is that you need different ways and methods of communicating, based on the type of business you have.

  • Do you have the resource to deal with customers one-to-one? Or you need to employ AI or chatbots? Are you offering a high-end product or service that requires a deeper customer relationship relative to your value proposition?

Types of customer relationships:

  • Personal assistance

  • Self-service

  • Automated services

  • Communities

  • Co-creation

6. Key activities

  • What do you do every day to run your business model? These are the most important actions a company must take to operate successfully. This is how you create value.
  • Key activities for Walmart, for example, are to sell products and goods. To do that they need a huge infrastructure that relies on distribution channels and being able to sell effectively across different distributions.
  • If you are a platform business such as Uber your key activities are to run that platform, by manging the cloud service, the code and ensuring there are no delays, etc.

How key activities can be categorised:

  • Production
  • Problem solving
  • Platform/Network

Now watch Business Model Canvas for startups: Part 4 - on key resources, key partners and cost structure. Here.


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