Improve your online business model

If you already have a business and notice that the current model is under threat, then it’s time to consider choosing a new business model.

Where to start?

There are three elements which are important in order to determine which business model to choose:

  • The costs of producing and maintaining the product or the service you want to provide.
  • How much is your customer/client willing to pay in order to use your product or service?
  • What are the most convenient channels for your customers/clients?
Business-Model

Modify your existing business model

If your current business model is only experiencing minor issues, it might suffice to adapt it.

There are two ways to do this:

  • For short term results, apply a SWOT on the Business Model Canvas
  • For long term results, apply the Blue Ocean strategy on the Business Model Canvas

... or choose a new business model

If your current business model is experiencing major issues, it might be time to choose a new business model from the following options:

Direct to Consumer

Selling or renting products and services directly to the customer without any intermediaries.

Direct to Consumer

Selling or renting products and services directly to the customer without any intermediaries.
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Two-sided business model

A business model that facilitates direct interaction between suppliers and customers, creating value through an intermediary platform i.e. Amazon

Two-sided business model

A business model that facilitates direct interaction between suppliers and customers, creating value through an intermediary platform i.e. Amazon
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Freemium

A basic product or service is provided free of charge, but money is charged for additional features, services, subscription or more advanced versions i.e. Evernote, Hubspot

Freemium

A basic product or service is provided free of charge, but money is charged for additional features, services, subscription or more advanced versions i.e. Evernote, Hubspot
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Product as a Service

A business model in which the customer pays a monthly fee for the use of physical goods.

Product as a Service

A business model in which the customer pays a monthly fee for the use of physical goods.
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Advertising

A product or service that users don’t have to pay for because it is financed by advertisers.

Advertising

A product or service that users don’t have to pay for because it is financed by advertisers.
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Software as a Service

The process of offering customers the usage of software for a monthly fee.

Software as a Service

The process of offering customers the usage of software for a monthly fee.
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Razor and blades

The main product is sold at cost price to increase sales of complimentary goods with a higher margin.

Razor blade

The main product is sold at cost price to increase sales of complimentary goods with a higher margin.
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Bait & hook

The main product is free in order to make a profit by selling complementary goods for a high price.

Bait & hook

The main product is free in order to make a profit by selling complementary goods for a high price.
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Freemium upside down

A service that subscribers can use free of charge, but for which non-subscribers have to pay a premium.

Freemium upside down

A service that subscribers can use free of charge, but for which non-subscribers have to pay a premium.
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Coexistance-different-Business-Models_simplified

Let current and new business models coexist

You may find you have two business models that need space to evolve. Depending on the similarity of their building blocks, synergy and potential for conflict, you will either have to integrate them, give them autonomy or separate them.

If you want to try out a new business model without damaging the mother company, then the most common solution is to create a spin-off.

Test your new business model

As when launching a new business, testing a new business model is also important. Depending on your new business model, you may use one of the following methods:

  • Clickable prototype
  • Landing page
  • MVP
  • Crowdfunding

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