Business Model Canvas - Building Blocks - 03 - Channels

Channels (Building Block) = how a company reaches its customer segments to deliver Value Propositions

Company's interface with customers:

• communication channels
• distribution channels
• sales channels

Channels are customer touch points which play a crucial role in customer experience. The several functions of channels are:
Raises awareness about company's products and services.
helps customer to judge a company's value proposition
allows customers to purchase specific goods (products and services)
providing customer support - post purchase

Questions to ask ourselves while thinking about channels:

• which channels will our customer segment use to reach us?
• through which channel are we reaching our customer segments now?
• in which ways are our various channels integrated?
• which channels work best?
• which channels are the most cost efficient?
• how are we integrating them (Here, them means - rest of the business model) with customer routines?

There are 5 distinct phases to channels. Each channel can cover some or all of these phases. 

Channels can be distinguished as:

• Direct Channels
• Indirect channels

Channels can also be distinguished as:

• Owned channels
• Partner channels

Finding the right mix of channels is crucial in taking the Value Proposition to market. 

• Partner channels lead to lower margins but they allow an organization to expand its reach and benefit from partner strength.
• Owned Channels and particularly direct ones have higher margins, but can be costly to put in place and to operate. 

The trick is to find the right balance between the different types of channels, to integrate them in a way to create a great customer experience, and to maximize revenues.

Channel Types			Channel Phases
Own	Direct	Sales force	Awareness	Evaluation	Purchase	Delivery	After Sales
		Web sales	how to raise awareness of our products ?	How to help customer evaluate our value proposition ?	How to allow customer to purchase specific products and services ?	How to deliver our Value Proposition ?	How to provide post purchase customer support?
	Indirect	Own stores
Partner		Partner stores
		wholesaler