Customer Relationships Business Model Canvas – We often start building a product without knowing the E2E business model. But it is very important to analyze if the product has the right value, partners, resources, revenue model, etc. to become a successful product or not. This ‘business model picture’, known as BMC, is very useful for software PMs at the corporate business level and is widely used by PMs not only for existing products but also for New products are built.
It consists of nine segments, on the right hand side we can see customer related segments like — customer, funnel, CRM, revenue stream, etc. On the left side we find segments related to internal company operations, capabilities, cost structures & partners or supplier-facing views. In between, the value proposition aligns the two sides or the customer and company perspectives.
Customer Relationships Business Model Canvas
As we all know, every product has 3 elements that need to be ensured to create success throughout its life cycle. And ‘Most Valuable Product’ can be achieved when all 3 factors (1) Desirability- value proposition, 2) Feasibility- architectural technology & 3) Feasibility- model financial figures] are shared in a common section and balance them all.
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We have an order to fill all 9 BMC segments including all 3 elements mentioned above and they are equally important. Snapshot below
Clearly explain the order in which the segments are filled and which segments belong to which valuable product elements.
This is an example of a BMC analysis that I did for one of the Indian companies “Dunzo”.
:— Dunzo is an online platform that offers delivery in most Tier 1 cities starting from Fruits-Vegetables, groceries, medicine, fish, chicken, paan tobacco, pet supplies darling, etc. We can even deliver any item from one address to another within the same city within 30–60 minutes (faster than India Post and we can express any item). anything, anything!!!! ?).
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Dunzo started as a “mini beta” in 2015. They ran their first 5,000 tasks through Whatsapp to understand the pain points of their customers. They are backed by major investors like Aspada Investments, Blume Ventures, Google, Alteria Capital, etc.
I am a regular user of this App and find it very useful in my daily life. I have tried to explore their overall business model, hence the BMC below for your reference.
From idea to product, one lesson at a time. is a collection of UX, UI and Product opinions and resources. To submit your story: https://tinyurl.com/sub To find a UX job: https://tinyurl.com/uxjobboard The subscription business model is a powerful tool for a company’s growth strategy company. This is because it is a business model that benefits from recurring and predictable revenue. In addition, this is often a very beneficial business model for both parties, the company and the subscriber, as it ensures the stability of the business while providing convenience to the users. The subscription business model covers a wide range of value propositions, from physical and digital products to all kinds of services. Thus, understanding the applicability of this business model can mean the success of a new business venture – or the salvation of an old one. Let’s check together.
A subscription business model is any business that offers a service or product in exchange for a recurring fee, usually monthly or yearly. That is, as long as your customers want access to that product or service, they need to pay.
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It is also a business model based on customer relationships. The longer the relationship, the more value the customer has to the business.
The big challenge for a company choosing a subscription business model that is also responsible for a positive subscriber experience: focusing on user retention. This is because, unlike one-time sales companies, a subscription-based company’s revenue is dependent on retaining buyers. So it needs to provide a high-quality product and service to prevent its customers from turning to competition (the stir).
For starters, the registrar’s method of attracting customers is the same as any other business: marketing. However, there is a big difference in marketing planning. Let me explain. Since the subscription business model requires users to pay on an ongoing basis, the fee is usually cheap, avoiding burdensome subscribers, causing them to abandon the subscription. As a result, it generally takes a long time for subscription companies to recover the money invested in individual customer acquisition (CAC).
That is, these businesses need to control exactly how much they spend on this acquisition, so that it is a sustainable business in the long run. One of the most widely used strategies is to use the freemium model, attracting top-of-the-funnel customers with a free offer and then convincing a portion of that audience to switch to the premium paid version on a regular basis. often. So, once a company has a subscriber base, it needs to come up with a value proposition that truly meets user expectations. Otherwise, they will stop subscribing to the service. This means that the company needs to understand very well who its target audience is and what their needs are.
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In other words, unlike traditional businesses, subscription companies need to invest more time, energy, and capital in maintaining their subscribers, while trying to reduce acquisition costs. And the turning point is that if the company does its homework very well, it ensures satisfied users who, in addition to being loyal to the brand, will remain the ones who market it.
As mentioned earlier, the subscription business model is suitable for many types of businesses. Check out some of the industries that often benefit from it:
They are some of the most famous companies adopting this model, including Netflix, for example. These businesses are based on providing content and the experience they provide to users. Customers have access to a huge catalog of content as long as they continue to pay. Some companies adopting this business model also employ a freemium strategy. This is the case with Spotify, for example, which attracts new customers through its free option. Today, half of its users have paid.
This type of business has grown exponentially in recent years and there have been boxes/subscriptions for everything you can imagine, from food and alcohol to baby clothes. These companies make money from the convenience of users, who, for a very affordable fee, get the kind of products they need at home, with a useful and relevant frequency. And in some cases, there is also a curation service. The company selects the products, based on the tastes and preferences of the customers, who will receive those selected items right at their doorstep.
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Many software and game companies have chosen to use a subscription business model instead of selling a one-time product. Known by the acronym SaaS – software as a service, these companies secure recurring revenue while maintaining their up-to-date value proposition for customers. This is because the subscription business model allows software companies to keep updating and developing new features for their products and users will always have access to the latest and greatest software version. without worrying about new purchases and downloads.
You may not have realized it, but age-old services like rentals, rentals, insurance and the like are also based on a subscription business model. All of these companies allow customers to access and benefit from their product or service in exchange for recurring revenue – monthly or yearly.
As you can see, the subscription business model offers stability and great sales potential for businesses. At the same time, it faces challenging issues related to marketing strategies and plans. However, if the company works with goals and metrics, focuses on providing quality products and services, and cares deeply about customer relationships, then the chances of success are great.
NEWSLETTER Want to Receive a New Business Model Analysis Directly to Your Inbox? Sign up now and don’t miss any new posts! Leave this field blank if you are human: The Business Model Framework is a strategic management template used to develop new business models and document existing ones.
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It provides a visual chart with elements that depict the value proposition, infrastructure, customers, and finances of a company or product,
The nine “building blocks” of the business model design pattern known as the Business Model Framework were first proposed in 2005 by Alexander Osterwalder,
The formal description of the business becomes the basis of its activities. Many different business concepts exist; Osterwalder .’s 2004 thesis
Proposes a single reference model based on the similarities of a range of business model concepts. With its business model design template, a business can easily describe its business model.
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Osterwalder’s canvas has nine boxes: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure.
The business model framework can be printed on a large surface so groups of people can come together to start sketching and discussing elements of the business model with post-it notes or markers. board. It is a
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