What is a Business Model Canvas-CUSTOMER RELATIONSHIPS

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What is a Business Model Canvas-CHANNELS

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What is a Business Model Canvas Values Propositions

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What is a Business Model Canvas-Key Resources

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What is a Business Model Canvas-Key Resources

BLOCK N°6: Key Resources

 

 

 

The Key Resources building block groups the most important elements needed to make the Business Model work.

The Key Resources is the building block pivot who allows the company to:

• Create ValuePropositions,
• Reach Customers Segments,
• Maintain Relationships,
• Earn Revenues.

Depending on the type of the Business Model, different resources are needed such as:

1. Physical: like factory, vehicles, machines.
2. Intellectual: such as knowledge, licenses, brands.
3. Human.
4. Financial.

Also, companies can own, or lease resources from partners.

Example: iPod Key Resources

 

The resources used by Apple to make the iPod Business Model work are:

• Physical: iTunes software
• Intellectual:  Apple brand, iPod design.
• Human: Performant people.
• Financial.

BLOCK N°7: Key Activities

 

What is a Business Model Canvas-Revenue Streams

BLOCK N°5: Revenue Streams 

 

The main target of a company is to generate money, to maximise its profit through a Revenue streams of each customer segments. Everyone build a Business Model has to ask himself the following ultimate question:

What value each segment willing to pay?

 

Finding the exact answer to this ultimate question you assure the longevity of your company and the success of your Business Model.

Keep in mind:

Finding the exact Customer Segments,

Defining the perfect Value Propositions,

Discovering the Revenue Streams 

mains to a successful company.

Returning to our ultimate question “What value each segment willing to pay?”. To answer this question, you have to set firstly the ways of generating Revenue Streams. Depending in your Value Propositions and Customer Segments you can choose one or more from the following ways:

• Asset sale: The conventional way of selling;
• Usage fee: Use of particular service;
• Subscription fees;
• Lending/Renting/Leasing: Use of a particular asset for a fixed period;
• Licensing;
• Brokerage fees: Intermediation services performed on behalf of two or more parties;
• Advertising.

Secondly, each Revenue Streams might have different pricing mechanisms. There are two types:

1- Fixed Pricing: Depends on static variables such as:

• Price list: static prices;
• Product feature: In function of the features of the Value Propositions;
• Customer Segment: Types of the Customer Segment;
• Volume: Quantities purchased.

2- Dynamic Pricing: Market conditions such as:

• Negotiation;
• Yield management: Inventory and time of purchase (Exp: Airline seats);
• Real-time-market: In function of the supply and demand;
• Auctions: Established by the outcome of competitive bidding.

Finally, the price strategy is important for the success of your Business Model, we suggest you "The Strategy and Tactics of Pricing: A Guide to Growing More Profitably" book to read.

Example: iPod Revenue Streams

 

The way used by Apple for defining the iPod Revenue streams is Asset Sales provided by the selling of the hardware, in addition to the selling of music on the iTunes store;

BLOCK N°6: Key Resources

What is a Business Model Canvas-CUSTOMER RELATIONSHIPS

BLOCK N°4: Customer Relationships

 

The relationships block covers which kind of relationships a company wants to make with a precise customers segment.
There are different motivations that can drive the type of the Customer Relationships, such as:

• Customer acquisition
• Customer retention
• Boosting sales (Up Selling)

Below you can find a list of several categories of Customer Relationships:

• Personal assistance: Based on human interaction;
• Dedicated personal assistance: Each customer served by a dedicated person;
• Self-service: Customers help themselves by a set of tools provided by the company;
• Automated services: An automated processes can recognise the characteristics and the needs of customers and offers them adequate services;
• Communities: through the online communities, customers and companies can connect and exchange knowledge;
• Co-creation: Letting customers give their touch such as design recommendation, content creation..

Note: These categories may co-exist with a specific Customer segment.

The Customer Relationship used highly affect the whole customer experience.

Example: iPod Customer Relationships

The Customer Relationships applied to the iPod Business model is the Personal assistance category. On of the best stores in the world is the Apple store with its top revenue per square $4 000 and the highly performant promoters who recognise the importance of the human interaction.

Thus, Apple stores offer to their customers the best users experience.

BLOCK N°5: Revenue Streams