This is the third lesson in our free business model canvas course. in this lesson we look at the role of channels in the business model canvas. Channels are how you deliver your value proposition to your customers. This is fairly broad and includes not only all the marketing channels that you can think of but also more prosaic approaches to getting goods in front of customers. These include shops, warehouses and milk delivery floats (if you were a kid in the UK in the 1980’s or earlier). What brings all these channels together in the business model canvas together is –
“How do you get the value in front of the customer so that he (or she) will buy?”
So when we talk about channels here we are talking about marketing and distribution channels. Everything as diverse as a pipeline carrying gas across the Baltic Sea to regular tweeting.
Value propositions are delivered to customers through communication, distribution, and sales. These are known as your Channels.
Finding the right pathway to your customers could be the biggest challenge. Choosing the wrong channel will not attract customers to your product or service. Worse it will means that you waste time and money looking in the wrong place for customers. Getting your channels right is super important. As a business you have limited resources to invest in developing and building channels. As a result you need to allocate resources carefully.
This then comes back to understanding your customer. If you have identified her clearly you will have a good idea of where she hangs out. An elderly grandmother will be reached using quite different channels to a male football fan. Both could be reached by magazines – but totally different ones. Which works for the customer you are targeting? What evidence do you have for this before you do anything?
When we look at channels in startup marketing we make educated guesses about the best place to look and the best way to engage with customers. The Bullseye chart below helps you do this quickly and effectively.
Channels in the Business Model Canvas
In the Channel block, ask yourself:
How can my products reach my target customers?Do you use a mobile app, a store, sales staff or do you sell to shops directly?
Selecting your channels with the Bullseye Framework.
Your product has been proven successful; now it is time to experiment the best channel for your business using the Bullseye Framework.
In this module, we will discuss options and show how you can pick and track your channels.
Choosing Your Channels in the Business Model Canvas
Which is the most suitable channel? Why?
Viral Marketing, Public Relations, SEO, Social Media etc..
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Rank each channel according to its potential, cost, volume and ease of testing.
Move the (what you think) best channels to the centre. Leave the others untouched.
4) START TESTING
These decisions are all based on assumptions. Hence, it is important to start learning fast and ensure cost is as low as possible. Test the top 3 channels and move them away from the centre based on the effectiveness. Remove the least promising result and replace with one of the channels from the outside circle.
Note for testing:
At this stage, it is important to test your assumptions by setting up experiments that will cost you least. Your idea has many assumptions and is likely to change in the future. Spending months on a website, paying to find your customers is a good lesson but a waste of code effort. There may be alternative ways to test without paying for a website. Test smart, save your time and money!
Be disciplined in using it for a longer period by embedding this in your day to day operations
Be disciplined to capture the results
The shorter the experiments the better. Testing the result in a day has more value than creating certainty in 3 months
Be creative in thinking of the experiments, you will get better and more creative in it over time
How to Build a Great Business Model Canvas – The FREE Course
- Lesson 1 – Customers
- Lesson 2 – Value Propositions
- Lesson 3 – Marketing & Distribution Channels
- Lesson 4 – Customer Relationships
- Lesson 5 – Revenues
- Lesson 6 – Key Resources
- Lesson 7 – Key Activities
- Lesson 8 – Key Partners & Suppliers
- Lesson 9 – Costs