This month, we’re moving into ‘Customer Relationships’, the fourth part in a nine-part series on the Business Model Canvas. Customer Relationships are the different types of relationships we can have with our customer segments, how costly they are, and how they align with the rest of our business model.
There are six specific categories of Customer Relationships:
- Personal Assistance – This is based on human interaction. Customers can communicate directly with company representatives throughout the sales process and after the sale is complete. This may happen in person, by email, through call centers, etc. Nordstrom’s would be a good example of this. There is usually a customer service representative in the department that can help you find your perfect fit, help you with the sale, and help if there is a problem down the road.
- Dedicated Personal Assistance – This is also based on human interaction, but adds the specificity of a dedicated customer service representative. This is the deepest type of customer relationship and normally develops over a long period of time. Think of this with an investment advisor, CPA or an attorney.
- Self-service – In this relationship, the company does not maintain a direct relationship with its customers. Instead, it provides all the necessary means for the customer to help themselves. Think of how you buy music through iTunes. This service does not require any customer service; you can begin and complete the transaction on your own. Another example would be how you purchase gas for you cars. This transaction typically happens at the pump and you never speak to an attendant.
- Automated Services – This relationship mixes customer self-service with automated processes. Automated services can recognize individual customers and their characteristics. While iTunes is an example of self-service, Pandora (a web-based music service) is an example of an automated service. With Pandora, you create a profile and populate a couple of “stations” you like to listen to. As you continue to listen to music, you can give the songs a ‘thumbs-up’ or a ‘thumbs-down’ when you like or dislike music. Over time, the software actually tailors the music it plays to your liking.
- Communities – Many companies are using communities to become more involved with their customers/prospects and to facilitate connections between community members. Many companies maintain online communities to exchange knowledge and solve problems. There are several examples of this that come to mind. Most technology companies have online communities where people share questions and solve problems. If you have ever Googled a computer or software problem, you were probably provided with several online communities that had answers. Some of these forums (online communities) are established and monitored by the software and hardware companies.
- Co-Creation – This is a model in which the company and the customer co-create value, done quite frequently with technology. When you purchase something online, you typically get to peruse through the reviews of the item that you are buying prior to making your decision. In this instance, the seller and previous customers are working together to co-create value. The customer reviews add value to the product as well as to the customer service of the seller. This can also be done with testimonials for typical brick and mortar companies.
Depending on the type of business, business model and business life-cycle, you may choose to have different types of relationships with your customers. Brick and mortar companies typically include personal assistance and self-service models, while virtual companies are usually automated and use communities and/or co-creation in their models.
It’s important to consider your specific business model, offering, and customers to determine your Customer Relationships. Here are some questions to consider in your planning:
- What relationships do your competitors have with their customers?
- Is that the same relationship you have with your customers?
- Is that the best type of relationship to have?
- What type of relationship creates the most value for your customers?
Over the next couple of weeks, I encourage you to build on your Business Model Canvas. You should consider the Customer Relationships and what works best for your customers and your business. If you would like help in the process, please let me know.