Wednesday, January 27, 2021

Explore Concept of Business Model by Inquiries

Design and validate your business model via inquiries and take a systematic approach to develop it into a more solid form.

A business model is "why this business works" and how a business operates. It defines customers, needs, and solutions as well as a competitive advantage. It includes the components and functions of the business which generate revenues and expenses of the business. Business leaders explore the concept of a business model by addressing several core questions that the majority of business model researchers deal with their models:

Who is the target customer? The purpose of business is to create customers. A holistic approach to design a business model would be to look at the purpose of the business, who is the customer, what they want, what’s the value to them and how they want it delivered, then look at the function-products and markets, processes required and the structure, resources, or authority of the system. It is important to build a new model around 'sustainable customer value' that aligns customer expectations with customer experience, staff expectations, corporate vision and values, as well as business capabilities.

We live in the era with people centricity, choices, and fierce competition, the end customers who shop the business’s products or service and continue to compare their customer experience with competitors. Winning new customers or new markets is the journey. A valid strategic objective mapping allows you to first understand your customers or prospective customers and what they value, and then identify how to best characterize that value through effective management. Often, customers understand their pain point, but do not know what they want. Shaping "customer desire" is a different task from shaping or understanding "need"; and making consumers believe their "want" is a "need" is a recipe for success.

What need is met for the customer? Look at the business model as the "WHAT" the business is about or what it will do for customers. What offer will you provide to address that need? How does the customer gain access to that offering? What role will your business play in providing the offering? What customers generally want is a fit-for-purpose, and hassle-free solution to their needs, combined with as little interaction with the seller as possible. “Fit-for-purpose" is equally true for human relationships as for solutions to other needs. If you promise your customers that you will be responsive, then the culture in the company needs to reflect that as well. Forward looking companies can capture customer insight, examine the entire customer lifecycle from acquisition through disposal, and isolate where in the experience they choose to invest, where they choose to compete and where they choose to innovate. The strategic and operational priorities are key factors in customer experience management.

Digital is the age of customers. Customer Experience is vital for business growth, development and to make sure you stay in business in the long run. So engage customers in business conversations, point out that customer inquiries are not just support related, but can foster new and better ways the products/services/application can perform and optimize every touch point of customer experience. If you promise customers, you will be easy to do business with, and then internally you must become that to each other - easy to work with and work for and spend a lot of time on future products/customers. Customer Experience Management is key to every business. It is not just important, it is vital for growth, development and to make sure you stay in business.

How will your business earn a profit?
The digital evolution means that channels to customers. Without customers, an organization cannot survive, and without creating value and profitability, an organization cannot grow and thrive. Design the new business model and align the business activities that have a three-way impact - Revenue, Cost and Investments at the same time by choosing an environment to compete. Customer-facing applications/solutions are critical as at the end of the day, they generate revenue for the business. Keep in mind though, there are frequently “fundamental differences” between the organization's view of value and that of customers. You might produce the most-sophisticated-in-the-market product, but no one needs and buys it. That will waste the talent and resources of the business, without making profit for the company.

In consumer companies, if there is an outage, it normally has a direct impact on revenue and consequently attention of the top management. Explore new business models and make profit by asking: What new opportunities could you capture that you can’t address with your current business model? Can you sense and create new markets before competition thus make it much more sustainable than the competition? Building customer-centricity consistently in a way that delivers the right experiences to the right customers at the right times is, in most companies, enormously complicated, but worth the effort, for long term profitability.

Design and validate your business model via inquiries and take a systematic approach to develop it into a more solid form. There is such a massive leap from validated framework to the detail which is required for a working business. The ultimate goal of shaping a customer-centric organization is to architect an organization to bring value to customers in ways that are beneficial for them while also creating added value for the company itself.

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