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Who is your customer and what do they value? These are the two most important questions you can ask for your business. How you answer these questions determine your business model.
Lets look at an example. I want you to imagine your business as we go through this. If you are a NFP in Australian context then it will be quite clear what it means to answer this.
The PC market.
In the Computer marketplace, purchasing departments were the main customers. Most of the enterprise customers were people inside large organisations whose job was to get the best value for money. In this context the people making decisions are trying to be rational in there decision making.
They generally have criteria about what is good performance. Some version of prices, maintenance and software compatibility may be part of this.
Will they care about how it looks? What about the colour?
These kinds of questions are not valued and in some cases is hard to make when you are buying 10,000 machines.
Anyone in the NFP sector who has dealt with government grant making can connect to this. It’s not very different.
The smartphone market.
Apple has always had a niche market selling computers. The integrated model of hardware + software + retail works for a different kind of customer than a purchasing officer in large organisations.
In the smartphone market the individual customer is king. The customer in this case are people like you and me. When you buy a phone you are looking for price but it does not end there. You will look for a network that suits your usage. You will think about the shape and colour. Ease of use is important.
Status is important. Do I want to be seen with a Chinese phone brand? These are important decision criteria.
In the smartphone and tablet market the customer changes from the enterprise buyer to the customer. In this case Apple is killing it. Why? The fundamental business model has remained the same for Apple but it’s characteristics and value is very relevant in the smartphone market and the tablet market.
The same business model is now working on the computer space as more and more consumers are making choices to buy the Mac.
The Social sector
If you have followed till now and mapped your business it’s evident that in some contexts it’s moving away from the PC market to the smartphone market.
In the Australian context, the advent of policy changes like NDIS in the disability space and CDC in the aged care space is changing the equation.
The primary customer whose life you want to make better and the financial customer will be the same. This is going to change the fundamental premise of the current business models.
Who is the customer and what they value is going to be very different in the coming years.
In this context you need to more like Apple rather than Acer. This is where human centered design will play a major role. Having deep insights about what customers are trying to achieve and in what contexts is very valuable. Trying something new, we need to prototype and iterate our way to success.
The way you go about understanding, creating and sustaining value is going to be key and that requires a new business model.
To do that you need to start experimenting with new business models now. Now, when your current business model is still tracking well. When you have some spare cash to invest. When you are still working with government as the main customer. Now, when you understand how to deliver your current business effectively and effectively.
What we need is not tweaking. What we need is go back to the mystery and re-imagine to start new business models.