HAVE I GOT THE RIGHT BUSINESS MODEL TO RETAIN NEW BUSINESS AND BEAT THE COMPETITION?
Having the right business model is the key to every businesses success and in designing a successful business model there is a key point to consider – “Does my business model support the goals of my business?”
This might seem straightforward, but sometimes these two areas conflict with each other. That is why the business model often evolves from the overall company strategy, not the other way around. For example if your company strategy is to target products at a younger more technology enabled audience, then your business model should reflect this and must help meet the aims of the strategy.
There are so many models to choose from. Do you opt for Low-Cost (Ryanair), Freemium (Linked -In), Recurring Revenue/Subscription (Spotify) or many, many others? Dell pioneered the Just in Time model, McDonald’s are masters of the Franchise model, Amazon’s success is because they put growth first in place of profits, Microsoft gained a foothold in the marketplace by licensing not selling their original system and ARM don’t manufacture processors they design them. The list is endless. Nowadays many of the best models are P2P (Person to person/One to one) or disruptive – just think of Uber.
But they all have one theme in common – strong positioning and clear differentiation. What is the compelling reason for customers to visit your store, or your website or buy your product or service over the competition? What do you want to be known for? If you have no differentiation in the marketplace you will consistently lose business to the competition, and it is time to revisit your strategy.
Providing good customer service, loyalty programs and experienced account management is always a good reason for customers to come back. In this instance you only have to think about John Lewis and why they are so successful. Understand your customers, and you can continually evolve your product or service to give them what they need.
Having a genuine in-depth understanding of your marketplace is vital. It is important to be honest about what you don’t know. Carry out regular customer market research and understand what your competitors are doing. In today’s fast moving marketplace any research more than 6 months old is likely to be out of date. The trick is not just to do the research but to ask the right questions and apply the right metrics. This will help you to keep one step ahead.
The keys to any successful business is being agile, providing clear differentiation, identifying any competitive threats and adapting to changing market conditions.