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Part 4: Linking Customer and Value
Customer Relations, Channels
In this part, we discuss another two essential customer-facing components: Customer Relations and Channels. We understand how to utilize the knowledge gained so far to linkup the Customer with the Value in the Value Proposition Canvas.
The full lecture is now available as a video recording for a step-by-step process with explanation and examples. Make sure that subtitles in English are set for best results.
Topics covered:
- Channels: meaning and classifications
- Stages of Channels
- Applicable example on linking Channels to the Business Model Canvas
- Customer Relations: meaning and classifications
- Applicable example on linking Customer Relations to the Business Model Canvas
- Linking Customer with Value in the Value Proposition Canvas- Example
- Finalizing the customer-facing side from the Business Model Canvas, including Customer Segments, Value Proposition, Channels, and Customer Relations
Channels
“Channels” describe how a business reaches the customer. Here, we consider the various methods were we can reach the customer and deliver the value proposition. Some questions to consider the correct channels to use:
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Digitization: Will you use online or offline channels? Maybe a mix of both?
This highly depends on the nature of the value proposition, and the products/services offered.
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Ownership: Will it use own channels? Utilize partner channels?
Partner channels are usually cheaper with limited margins and can be utilized for early stages. Own channels cost more to operate, but expand the margin of revenue.
Channels have different phases:
- Pre-sale:
Raising awareness on the value proposition, and helping customer evaluate if the value proposition satisfies their need. - During sale:
Allowing customers to purchase products and services, and then delivering them to customers. - Post-sale:
Providing customer support.
Customer Relationships
Customer Relationships are all about nurturing the link you have with the customer.
Since customers are the focus of the whole business, a business needs to have a good relationship with each segment.
Different customers need different levels of relationships.
If your business servers multiple customer segments, chances are that you need to nurture a different relation to each segment, depending on the need and value generated by each segment. Here we discuss three levels of customer service:
- The standard, basic customer service
- The personal touch
- The big family
When a business focuses on the mass market, or targets a relatively large segment of customers, it is likely to have a short-lived service with each for the business to make profit. This could be:
Self-service: where there is no direct relation with the customer, like the self-service shopping isle in busy stores
Automated-service: when a business wants to give a touch of personalization on the self-service, it provides some automated support that gives the customer an impression of a direct relation. This is like Alibaba’s online shopping cart and recommendations.
When a business leans towards niche markets, or targets a relatively limited segment of customers, it is likely to have a more personal service with each, as this service can be considered as a part of the value the customer is seeking. This could be:
Personal assistance: where there is direct connection with a sales person who tries to help the customer with recommendations or service, like waiters at classic restaurants.
Dedicated personal assistance : A more personal experience where a customer support representative will be hooked with a customer to support them choose better and get the best price, such as house rental and purchase services.
With the increasing advent on online businesses, more startups are trying to get customers to feel as “part of their family”. This means customers are incentivized to become part of the product-making cycle.
This could be:
Communities: Online communities of people of similar needs where customers exchange knowledge and opinions on certain topics, such as how businesses do with Facebook groups.
Co-creation: getting customers even more involved by getting their feedback and opinions before finalizing the products. The Crowdfunding model revolves around this concept.
Examples on Channels and Customer Relations
Get detailed examples and how to apply them to your business model to become as below in the lecture file available for download for free at the link below the page.
Value- Customer Fit: Linking the value with the customer
Finding the right fit between the Value Proposition and the Customers takes effort.
As discussed in the previous lecture considering the Value Proposition Canvas, customers need their pains alleviated and their gains achieved through jobs. Value Proposition Promises to address these three areas.
Now we need to reassess the Value Proposition Canvas for the right fit given the Channels and Customer Relationships just defined.
We need to check each component against its relevant, keep the ones that are well addressed and remove the ones that are not addressed.
- Gain creators link to a Gains
- Values link to a Jobs
- Pain relievers link to Pains
Files for this lecture:
Business Model and Value Proposition Canvases here
In the next part, we will discuss non-customer facing components essential for running the businesses: Key Resources, Main Activities, and Key Partners.
Ready? Click below to go to the Fifth part now!
Next(Part 5): Behind the Scenes
Previous(Part 3): Value Proposition
