Business Model Canvas Channels – In this article, we will briefly look at the channels section of the business canvas model. No business can survive without communication and distribution channels. Channels are ways that customers can communicate with a business. This includes all the different platforms that the company uses to sell its products. Every step in the sales process and marketing campaigns is part of the channels.
Your distribution, communication and sales channels create your company’s connection with customers. Your channels also act as customer touch points that provide the customer experience.
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In general, there are only two types of channels; owned channels and partner channels. Let’s talk about them a little more in detail.
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A channel or direct channel includes everything in the house. This may be your sales force that goes directly after the segment of your customers to bring them. The Web is one example of a direct channel that can be under your company’s control.
Using an owned channel will have a direct relationship with the customer and is likely to be more profitable. You may have a physical store that sells your products; however, the customer must decide to go to the store, then you can sell to them, so it will be indirect selling.
Another issue with this type of channel is the investment required to create and maintain the infrastructure needed to get your product to market.
These types of channels are not specific. In this case, your company does not sell directly to the customer but uses a third party. So, for example, you can put your product on a partner store. Nike, for example, started as an indirect distribution channel of a Japanese manufacturer called Onitsuka Co. back in 1962.
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Nike became the official American distributor of Onitsuka Co.’s tiger shoe, the first Nike shoe to be sold in the U.S. Wholesalers are also channel partners. This is beneficial if you are starting out because there will be less investment required in infrastructure.
Let’s look at another example; Apple is the world’s largest company with a network of stores and original distributors. However, they also sell their products through third party websites, mobile networks and retail chains. So for Apple, there are different distribution channels that are used at the same time with different profits.
Before the internet became a thing, companies were very limited in their choice of channel. Only one channel was used in most cases, a direct channel where the buyer could contact the seller and physical distribution took place.
Fortunately, the rise of the Internet has given modern businesses a choice in the types of channels they can use to deliver a value proposition to their customer base. A good example that shows this change is IKEA. When IKEA started in 1943, its customers were poor rural farmers.
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The only way to distribute and market their products was to use existing channels. So local newspapers and the mail order service are what IKEA used to get their message across. They also relied on local milk truck drivers to deliver their products to the nearest train station. With the spread of the internet, IKEA launched a website and a mobile app, which, together with their stores, have become their main distribution channels.
You’ll need to ask a few questions to create a channel that works for your business. The following are some questions you might consider.
You must understand that channels and aspects of customer relationships are directly connected. Many businesses use one strategy to attract customers and another strategy to retain them.
Experts advise keeping a separate list of channels for different customer segments if you are targeting more than one. The next thing you need to know is that all channels go through phases. A young person can cover more than one of these stages at a time. The categories are as follows;
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How do you educate customers about the features of your products and services? This is part of marketing and advertising.
How can you help customers evaluate our Value Proposition? This is the marketing phase and allows your customer to think, read or use your product and form an opinion. This way, your value proposition is more visible to them.
Think how you can help customers buy the product or service they want? This is a sales process.
Define how you will deliver the value proposition promised to the customer. We call this phase the execution phase, and it describes how the product will reach the customer.
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Consider how you can provide after-sales customer care and support. In this phase, your channel promotes your products and services within your target segment. You must also give your customers someone to call when they have a problem or question about the product.
Remember that the more expensive the product or service, the more your customers will expect after-sales support.
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The last (but not least) part of the Business Model Canvas is cost structures. In this section, you must ask yourself how much you will make
No man is an island; so does your business. These are other companies, third parties, and individuals that you will need to reach out to
In the Business Model Canvas, the Key Resources section refers to the assets, materials, and supplies needed to deliver a value proposition to your customer.
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Business Model Canvas
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Some uncategorized cookies are those that are still under review and have not been categorized yet. The Business Model Canvas (BMC) is a simple but powerful tool for capturing and visualizing visualize the basic elements of the business process on one page. Read our brief introduction to BMC to find out how it works.
This image shows the crowdsourced platform for a disruptive new business model we’re all too familiar with – car sharing. We have chosen this example because it succeeds in clearly explaining the fundamentals of a unique business model.
Uber was founded in 2009, with a difficult and disruptive business model. However the business model canvas and its nine main elements were introduced for the first time in 2005. Although different types of business cover have appeared, the original design really stands out long time.
A business model canvas is a diagram that captures the most important aspects of a business model in predefined stages. It is organized on one page as a collection of nine boxes, and each box is dedicated to one of the predefined categories. The diagram shows how all the elements work together
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