Thursday, January 26, 2017

Business Model Canvas - Building Blocks - 04 - Customer Relationships

Customer Relationships = Company's relationships with each specific customer Segment



A company should clarify the type of relationship it wants to establish with each customer segment.

Relationship can be:

  • personal
  • automated


Customer relationships may be driven by the following motivations:

  • Customer acquisition
  • Customer retention
  • Boosting sales (upselling)


Example: In its early days, Reliance Jio mobile network provider is providing free services as part of its aggressive customer acquisition strategy. Once it reaches its limit of customers, it will focus on customer retention and increasing average revenue per customer.

The customer relationships mentioned in the company's business model deeply influences the overall customer experience.

Questions to ask ourselves when thinking about - Customer Relationships:

  • What relationship each of our Customer Segments expects us to establish and maintain with them?
  • Which ones have we already established?
  • How costly is it to maintain the customer relationship?
  • How is it integrated with the rest of the business model?

We can distinguish between several categories of customer relationships, which may co-exist in a company's relationship with a particular customer segment:
  • Self Service
    • Company maintains no direct relationship with the customer.
  • Personal Assistance
    • Example: Through Call centeres, Point of Sale, Email.
  • Dedicated Personal Assistance
    • In private banking services, dedicated bankers serve high net worth individuals. 
    • Key Account Managers maintain personal relationships with important customers.
  • Automated Services
    • Can recognize individual customers and their characteristics and provide information related to orders or transactions. 
    • At best, automated services can simulate a personal relationship (example: offering a book or movie recommendations)
  • Communities
    • Many companies maintain online communites that allow users to exchange knowledge and solve each other's problems. 
    • Example: GlaxoSmithKline launched a private online community when it introduced alli, a new prescription free weight loss product.
  • Co-creation
    • Amazon.in invites customers to write reviews and thus create value for other book lovers. 
    • Youtube.com solicit customers to create content for public consumption.

Business Model Canvas Example: Gillette 







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