The topic today is business model,
canvas, customer relationship.
We'll talk about what options
you typically have in terms of
customer relationship, why
it's important and very importantly,
then talk about how it interconnects
with every other part
of your business model from the
value proposition right on down.
Hi, I'm Steve Morris and I use this
StartupSOS channel to provide
practical how to advice for
first time entrepreneurs.
So today's topic: business model,
canvas customer relationship.
So customer relationship.
It's obviously important
you want to acquire customers,
retain them, you want to up sell
them. And of course, you'd like
referrals to new customers.
None of that will happen without
a positive customer relationship.
But you have some decisions to make
on really what type of relationship
you want to develop.
And the customer has some
expectations on what kind of
a relationship they expect
to have when they're purchasing
the kind of product or service
that you're providing.
So it's not just what you want.
It's also what the customer
expects of you.
And that's what you'll have to
explore in the customer discovery
process.
But you have to start somewhere.
So let's start by talking about
possible approaches to customer
relationship so that you
can develop your hypotheses
in your canvas around customer
relationship.
So there's quite a range of
potential relationships that
companies develop with customers.
On the one end of the scale,
there's more of a transactional
kind of approach.
You walk up to a kiosk, press some
buttons, get what you wanted and
walk away.
Very little customer
relationship involved.
You know, one step above that
might be a self-service kind of
approach, say a Web
site where you provide all kinds of
functionality, perhaps a
catalog and user reviews
and make it easy to to provide
you with an order for a product.
Well, that's a little bit more
of a customer relationship, but
obviously not a face to face
relationship.
And of course, you can go all the
way to very
dedicated personal assistance
where it's in-person
face to face.
And somebody is actually helping the
customer through the entire sales
process, a very much more
intimate type of customer
relationship.
Now, there are other approaches
to relationship, to other aspects
of relationship.
You know some customers may be
looking for community
type relationship.
In other words, perhaps some
online forum where they can interact
with other customers so
that they can share ideas
and share insights as to how
your product can best be used.
And then, of course, there's always
the idea of co creation where
literally, if not the product,
at least maybe the customer
experience is being created
by both the company and the users.
You know, one example of that might
be, say, YouTube, you know,
YouTube provides the platform.
It's people who actually provide
the content.
Certainly a lot of co creation
going on there.
So a lot of different options
for how you might develop
a relationship with a
customer and help customers develop
relationships amongst themselves.
So again, the approach you choose to
customer relationship strategy
is important because it's critical
for helping you acquire, retain,
sell up.
And then, of course, get references.
But more than that, it's important
because it's a very core piece
of your business model.
Consider all of the implications
you have to think about for your
customer relationship.
On the one hand, you
have to understand how
the customer wants to buy what
kind of a buying experience
would they like to have.
And it's important to deliver that
experience or to convince them that
you're going to deliver a better
experience.
But let's use a book
example. Let's say you're selling
books and you
could sell through bookstores or you
could sell through online.
Some people actually prefer to buy
books in bookstores.
It has a different ambience.
It has various benefits.
Other people really like the idea
of buying books online.
Powerful search capability.
Read customer reviews.
Very convenient.
Do it from home.
A lot of advantages there, too.
And it could be that you'll have
customers that like one approach and
not the other.
What does that sound like?
That sounds like part of the value
proposition you're delivering.
You're delivering not just books,
you're delivering a customer
experience.
And do your customers want that
experience to be a brick and mortar
bookstore or an
online purchasing process.
Depending on what it is, well,
you're gonna have a different value
proposition for the customer.
And again, if these are different
customers that prefer the two
channels, hou just ran
across a new segmentation
strategy.
Customers that prefer this.
And customers prefer that.
Well, OK. So far, we've touched
on the customer segments, part
of our business model and
the value proposition.
But now there's more.
What about the channel strategy?
The channel strategy - and we'll get
to that in the next video - but it's
basically how you're going to market
sell and then support after
the sale, your customers.
Well, that's literally the way
you're reaching out to customers.
It is literally the way that you're
going to develop customer
relationships is through your
channel strategy.
So the channel strategy will vary
depending on what your customer
relationship goal is.
So there is one implication.
Now if your channel strategy
is going to change because
of your customer
relationship strategy and again,
in our example, say online book
sales versus brick and mortar book
sales, well, that has a huge impact
on your partnering strategy.
If you're going to sell online, you
better partner with online book
sites. If you're going to sell
through stores, you'll have to work
through an entirely different
channel.
But the changes keep coming.
Now there'll be a difference in cost
structure. It's almost certainly
a different expense for you to reach
out and partner with a bunch of
brick and mortar bookstores versus
probably a relatively small number
of online bookstores.
And on the revenue side,
there'll be a difference.
The discounts that you'll have to
give to sell through an online
channel are probably going to be
different than the discounts you'll
have to sell to go through
a brick and mortar channel.
So, boy, we've touched
most of the parts of the canvas.
Now, it isn't a big leap to say
that your key resources and
your key activities will be a bit
different too, depending on which
channel you use and which
customer relationship you're going
for. So customer relationship
is very, very central
to your business model.
In fact, it literally can
be your core innovation.
One could argue that that's
essentially what Amazon did.
Amazon reinvented
a new customer experience
for buying books early on
their first market focus
as opposed to going to a brick and
mortar store. You could buy books
more conveniently now at
home.
And yeah, there was some technology
behind making that happen.
And there was some impressive
logistics they had to put in place
to make that happen.
But at the core of the innovation
was they were offering a different
customer experience.
So really customer relationship
and customer experience, which would
be part of the value proposition,
definitely can be
part of your core
innovation.
So customer relationship,
not a trivial thing.
A good thing to think through pretty
carefully and think through
how it affects the other
parts of your canvas.
So I hope that added a little
light as opposed to adding too much
confusion.
Quick summary. There are a lot of
different approaches to customer
relationship ranging from arm's
length like transactional approach
to a much more hands on
dedicated personal assistants,
you know, community based
relationship, co creation
relationship.
A lot of different approaches
and a lot of different impact
potentially on the rest
of your business model, your
distribution channels, cost revenue
and so forth.
So your challenge now is
to think through what is
your customer relation set
of hypotheses, what you believe
is the customer relationship you
want to develop so that you can go
test that with customers
and think through what are the
implications for the other
aspects of your business
model?
And of course, we can talk about
that more as we get to the different
sections of the model in
the follow on videos.
So that's it for this video on
business model canvas customer
relationship.
If you have any questions about
this, please leave those questions
in a comment and I'll certainly try
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Thank you very much for watching.