Channels is a block of Business Model Canvas that refers to how a company communicates with his Customer Segments and how it reaches them to deliver its Value Proposition.
Some questions that are useful to understand the content of this block are
– How is the company reaching its customers now?
– How do Buyer Personas want to be reached?
– How are the company’s channels integrated? How is the company integrating them with customer routines?
– Which ones work best? Which ones are most cost-efficient?
Understanding which channel is best to reach customers is key and the main options are:
– Own Channels (physical or digital stores)
– Partner Channels (wholesalers and distributors)
– A Combination of Own and Partner Channels
When selecting a distribution channel, there are 5 key aspects to be considered:
– Target: number of customer segments/size of the market the company is targeting
– Investment: an analysis of the different costs associated with a channel
– Product Standardization:
- Standard Products: Customer Segments may be good with standard channels
- Tailored Products: Customer Segments may want tailored channels
– Control: different markets require a different level of control over the distribution channels
– Relationships: each channel establishes different relationships with different stakeholders resulting in different levels of complexity and flexibility
Channels have 5 main functions:
– Raising Customers’ Awareness about company’s products and services
– Helping Customers Evaluation of the company’s Value Propositions
– Allowing Purchase of specific products and services
– Delivering a Value Proposition
– Providing Customer Support usually called After Sales
When managing a channel, it is important to be aware of main functions and related lifecycle status it is going through.
There are 5 channel life phases that are:
– Awareness: the Customer Segments are getting to know the company’s products, services and channels. In this situation, it is important to focus on how to raise awareness. Typically, this is done through Advertising
– Evaluation: the Customer Segments are getting to know the company’s Value Propositions. In this situation, it is important to focus on how to help them. Typically, this is done through “asking to the customer” (Surveys and Reviews)
– Purchase: the customer perceives the Product/Market Fit and decides to purchase the company’s products and services. In this situation, it is important to focus on how the company allows customers to purchase. Typically, this is about making a choice on which channel to use (i.e. Digital vs Physical Stores)
– Delivery: the customer purchased the company’s products and services and now they must be delivered. In this situation, it is important to focus on how the company delivers its Value Propositions to customers. Typically, this is about making a choice on how the distribution takes place (i.e. product collected at a sales point, delivered or downloaded)
– After Sales: the customer has the products and services, but he may need support for using them. In this situation, it is important to focus on how the company provides post-purchase support. Typically, this is about making a choice on Contact Centers, Return Policies and After Sales activities.
Business Strategy | Product Marketing | Executive Master eCommerce Management | Business Innovation Master | MSc
I am driven by my personal growth and of people/contexts that surround me.
I followed a professional path in Valentino Fashion Group and Luxottica during which, thanks to the ability to understand different businesses and interests, I was able to succeed in Operations, Merchandising and Retail.
These organizations have exploited my ability to mediate and translate needs/constraints into practice, assigning me to Project Management roles.
Luxottica relied on my ability to analyze, to anticipate things and to imagine/implement solutions by appointing me in Supply Chain Management department and assigning me to the Product Management of IoT solutions for Anti-counterfeiting and Retail digitalization.
During this professional path, I also developed my leadership by managing teams to build Processes, Organizations, Systems and Governance Tools.