Skip to main content

Winning Business Models for the Now Economy [3]

[It ain’t that hard to be different.  Tom Peters] A successful business model describes how an organization designs and delivers value by providing stakeholders with a shared understanding of how the business operates. A strong business model offers a competitive edge by demonstrating that the firm does something different, more innovative, and better than its rivals. Realize that different isn’t always better, but better is always different. Sirius XM Satellite Radio is always on whether you are at home, at work, in your car, or at the beach. Many customers listen to SiriusXM eight to twelve hours a day! Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors, and retailers controlled channels and profits, now the artist and platform (iTunes) has the market power. Newspapers have struggled to become information providers as their readers aged and defected to new media. Sound business models answer the following 3 questions: 1) where should we compete?; 2) how should we compete?; and 3) how can we monetize products, services, experiences, and ideas. According to Accenture, 80% of companies hope to grow by developing new business models by 2019.Consider these 20 business models as you evaluate or develop your business strategy.

Digital Business Models

1. Access: Customer usage not ownership (Spotify, Zipcar) 2. Bricks-and-clicks: Retail and e-tail (Best Buy, Target) 3. Bundling: Sell 2 or more products for a discount (Comcast, Microsoft Office) 4. Community of users: Users generate knowledge, solve problems (eBay, Wikipedia) 5. Crowdsourcing: Outsource to non-employees for solutions (My Starbucks Idea, Doritos Super Bowl Contest) 6. Experience: App-based service plans (ClassPass, Zeel Massage) 7. Free: No cost products/services, revenues generated elsewhere (Skype, YouTube) 8. Freemium: Basic service at no charge, enhanced services have fees (LinkedIn, MailChimp) 9. Long tail: Millions of products offered, most sell very few (Amazon, Netflix) 10. Marketspace: Digital marketplace of buyers and sellers (Alibaba, eBay) 11. Multi-sided markets: Serve multiple segments – e.g., readers and advertisers (USA Today, Visa) 12. On-demand: Services as needed (TaskRabbit, Uber) 13. Open business model: Companies share low cost options [way below branded] Linux, Qualcomm) 14. Pay for value: Customers opt to pay what they wish (Neighborhood cafĂ©, Radiohead CDs) 15. Platform participant: Enhance platforms by creating user applications (Foursquare, Zynga) 16. Pure-play: Online presence (Blue Nile, 17. Shaper: Open up new marketspace (Apple, Facebook) 18. Software as a service (SaaS): Deliver applications over the internet (, ADP) 19. Subscription: Recurring fees for services purchased on a regular basis (Dollar Shave Club, SiriusXM) 20. Unbundling: Sell a single product from a set of related products (AT & T DSL, Windows Live Essentials) Think about the 7 questions below as your management team assesses your business model and market performance. 1.  Can you clearly explain your business model? 2.  What is unique about your strategy? 3.   How does it compare with your direct and indirect competitors? 4.   Have you broken any industry rules lately? 5.   Can you develop a more innovative and interesting business model? 6.   Will your business model win in the market? 7.  Does your organization truly deliver superior value for customers in the Now Economy? __________________________________________________________________________________________ This blog post is the 3rd in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at,, 954-309-0901 .


Popular posts from this blog

Customer Ownership - Understanding the True Value of a Relationship by Ricky Fergurson * [106]

In the rapidly changing landscape of B2B sales, factors such as technology, competitive intensity, and rising sales support costs oblige greater attention to customer relationships. Many companies that have an enterprise focus struggle with the concept of “owning the customer” (Weeks 2016). Given that customers are buying in different ways, firms are driven to engage customers differently. According to Cooper (2016), “customer ownership is all about creating, delivering and communicating compelling value”. In nurturing and developing customers through the B2B life cycle, multiple departments and functional units in the firm are entwined in customer relationship management (CRM). The complexity of CRM and dynamism in customers’ relationship expectations require that sales, marketing, service, and support work together through the customer buying and fulfillment process. The diffusion of tasks and responsibilities exposes a fundamental CRM gap: who truly owns the customer? A recent Amer…

The Value of Analytics in Customer Value by Maria Petrescu * [108]

Creating Better Customer Experiences [5]

[There are no traffic jams along the extra mile.Roger Staubach]
The dominance of the service sector, global competition, rising labor and technology costs and demanding customers forces companies to create excellent customer experiences or fail. In the Now Economy, Companies must know their customer’s definition of service quality (SQ). Organizations have to provide service experiences that meet or exceed customer expectations at a reasonable price.
It’s all about the service experience!Research has found that about 70% of customer defections are due to service problems. Customers evaluate service encounters to assess the quality of a firm’s offeringsand whether they will continue do business with them in the future.
Improving service quality is like taking vitamins, eating healthy and exercising regularly. Although the results may not be immediate, long-term benefits are significant. Managing service quality is not a “quick fix,” but rather a way of life for companies who are seriou…