At the basic level, business model channels Are the mechanism for how we communicate with and deliver our value propositions to our customer segment. What channels have in common is that they are touchpoints that play a critical role in customer satisfaction and customer retention. Channels are typically broken down into types and phases.
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In the previous sections we identified that our customers have:
Based on this, you have created value propositions that offer the best solution to help them achieve their goals. Furthermore, a positioning statement to persuade and influence customers. Now you need to create a plan and decide how you take your product to the market (business model channels – distribution) and how you will plan your marketing to make customers aware of your product (business model channels – communication).
Using the information on customers goals, pains and motivations you can also craft communications that:
Distribution channels are how you get your product to the customer. If you have a digital product or service (e.g. Software as a Service SaaS), then you might distribute and sell your product on your website. However, for physical products distribution and sales channels can be very different e.g. order online and then pick up in-store.
Another way to think of a distribution channel is who is going to deliver the product to the customer. This can be different from where the product is purchased.
Distribution channels = how the product is (physically or digitally) delivered (distributed) to the market and ultimately to the customer.
As an example, Amazon would hold a digital copy of a Book on its servers that can be distributed to a Kindle after purchase.
Alternatively, Amazon will hold physical copies of a book in its distribution centres. After purchasing the book online, the book is then sent out for delivery.
Examples of distribution channels:
Reaching your customer segment and being able to communicate with then is vital to growing your business. It is through the communications that you explain your value proposition, influence potential customers and secure sales.
Your goals in using communication channels are:
Examples of communication channels:
Let’s imagine you are an author who has produced a new science-fiction book. Furthermore, we have the book available in two versions, one in print and the other electronically (digital) as an eBook e.g. via Amazon Kindle. To keep it very simple let’s say that it is aimed at young adults (16-25 as a simple demographic criterion).
We can imagine different scenarios about distribution and communication channels (business model channels):
What we can understand from these scenarios are:
The Customer Journey Canvas can be used for a wide range of uses. However, one of the most powerful ways is to map the purchase journey. While some journeys can be short others can be more complex, it will depend on the product or service in question and the context.
Usually, there are three main touchpoint types in commerce situations.
There is a better way to think about market segmentation and new product innovation. The structure of a market, seen from the customers’ point of view, is very simple: They just need to get things done, as Ted Levitt said. When people find themselves needing to get a job done, they essentially hire products to do that job for them.
Clayton Christensen
Communication channels are where and how you acquire your customers. In other words, another term for them is acquisition channels. The only problem with this term is that assumes a one-off transaction and for most businesses, the goal is to build long-term relationships.
The business model channels building block is crucial for at least researching where your customers spend their time online. This forms the basis for how you will reach them to make them aware of your product or service.
Marketing is all about persuasion, influence, trust and building relationships.
The Growth Marketing Blueprint is a systematic way to plan how to acquire potential customers, convert them and subsequently build a relationship. Unlike most ‘marketing funnels’ it focuses on the full funnel – keeping customers, not just selling to them.
If you used the Customer Journey Canvas earlier, then you will understand the job(s), gains and pains for a customer segment.
If you know at what point customers find buying a competitor product causes frustration or dissatisfaction you can target that with your own process and use to your advantage.
There are lots of ways to enhance or even innovate the purchase path and reconfigure services to help customers. This is particularly true for more complex products and services that involve more information, higher levels of risk and longer decision times.
A lot of companies I talk to don’t know what or how they should be doing with customers after the purchase. Often they might bolt on a community forum or a knowledge base without recognising a much broader strategy and opportunity to develop experiences and relationships.
In the example given earlier, Claire signed up to get a free chapter for the book. As an author, if you were launching another book you would ideally want to have a database of customers who already liked your work. In the lead up to your next book launch, you would then send out a free chapter, give them details about the launch date and any promotions.
If you’re launching a new business or product then nobody will know of your existence until you launch. The first part of your plan, and one of the most important, is to generate awareness and start to communicate with potential customers.
The business model channels building block isn’t necessarily detailed at this stage about which channels are best or how to pick the right ones. You can download that later in this guide.
There are lots of powerful ways to launch your product and gain traction with your market.
See the Launch Canvas and details if you want to plan your product launch. Download it for free.
At the end of the business model channels building block, you should have a clearly described your communication channels and distribution channels.