Business Model Canvas: a tool for defining Business Models (part 5)

In this fifth part of this series I will write about the last building block of the right side of the Business Model Canvas dedicated to clients: customer relationship. However if you have not been following the posts of this series I recommend you to read the introduction I made of this tool created by Alexander Osterwalder and Ives Pigneur and also the first sections of this canvas: customer segments, value proposition and channels.

Returning to the subject of this post I will start by describing what the customer relationship is. Up to this point we have defined the different customer segments and the value proposition we will offer them. Likewise we have determined the different channels by which we will reach the clients on each phase of the buying cycle. However this is not complete if we don’t establish a relationship with each segment of customers, or in other words a way of connecting with them.

 

¿On what does the relationship we establish with our customers depends?

In order to define the relationship we establish with our customers we have to take into account two points. One of this points is that since we might have more than one customer segment to whom we offer a value proposition, maybe we will need to establish different relationships with each of these segments. We must remember that each segment has different needs and according to this we must establish a relationship that they require and that we are able to offer them.

The second point talks about the motivations we have when we establish these relationships. Osterwalder and Pigneur talk about three motivators that can also be seen as phases: customer acquisition, customer retention and boosting sales (upselling). As an example they talk about mobile network operators where in an early moment they offered free mobile phones. When the market became saturated, these operators changed their strategy and their relationship with the clients in order to retain and increase revenue per customer.

 

What type of relationship might be established with the customers?

There are many possibilities to establish customer relationships. Generally they range from personalized to automated. However today we might find other types of relationships that include other roles from the clients such as being part of a community, but also other roles from the company such as provider of information. Some of the relationships that you can establish today with your customers are the following: Personal assistance, self-service, communities – with Internet and social networks companies have established communities in order to become more involved with clients and prospects- and co-creation – with this kind of relationship the customer can also generate value for the company, like for example customer comments on Amazon products-.

As I mentioned these are relationships you can establish today, but it is likely that the range of possibilities become much more extensive with the evolution of Internet and other type of media.

 

On the next post of this series I will talk about the fifth block of the Business Model Canvas called Revenue Streams. Expect it within a few days!

 

Image taken from Flickr.com