Business models and PSS
The
business model is more than just shortly explaining the earning logic. It is
rather the whole business plan, how the value is designed, captured, delivered
and communicated. Business model includes the value proposition, market
segment, value chain, company position, cost structure, revenue stream and
strategy. Business model alone can change the market and be hard to copy – that
is a true competitive advantage. Good examples are Amazon and Dell. Amazon did
not re-invent the book, nor did they change the end customer user experience,
what they did was the process of how the value for the user was built and
delivered. This is the same in case of Dell. As the business model change may
be disruptive innovation it requires good communication for customers. Customer
must feel safe or confident when entering into new model with a supplier. Often
this is selling running hours, availability, usage or lifts etc. instead of the
machine. Because in industry it is often about the production machines it is
often likely that customers would like to have the ownership of their
production units. Thus
value communication plays a major role in a winning business model
This yields
into the fact that obviously pricing and marketing are strategic functions that
are in the center of execution when introducing the new model for markets. From
communications and marketing point of view the crucial thing is that now there
would be a paradigm change at three sectors simultaneously:
· Change from technology leadership to
leadership of use
· Change from product marketing to
relationship marketing
· Change from labor driven operation
to data driven operation
Disrupting
with business model requires deep understanding of own offering, the
limitations and possibilities but also very good communication channel for
customers. Customers should be well aware of what the company offers. Change
and new things are often something to avoid in order to play safe. Thus, your
kimono should be wide open for customers to clearly see everything you got. It
must be crystal clear what they get if they purchase from you with this new
model. This decreases the barrier to enter into new type of business
relationship. It is important to gain that trust, because when you sell activities
instead of goods, you soon know a lot of your customer basic business as well.
Customers should trust you like
they trust into their mother
Thus, take
off the kimono and be open in your communication and put a little extra effort
into the communications and marketing efforts.
Exceptional
business model puts you into spotlight. It is difficult to compare you with
anybody – you are different. This might scare some customers away but on the
other hand gives you a competitive advantage. Communications and planning is
the key. You must make no mistake making sure that every relevant person
working for your customers has somehow heard of you and your offering. Internet
and all the social media tools gives an excellent platform for the
communications. Become a thought leader of your business by publishing in all
medias and making some noise. According to resources in hand all data available
about the purchasers and decision makers should be used in order to make sure
they hear the message. Message is of course the value they will or would gain
with your offering. That should be visualized and put into numbers. Show me the
money! There must be a clear value proposition which is easy to understand and
explains your unique selling proposal.
