Business models and PSS

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.