7 Ways to Build Customer Relationships with BMC

Customer relationships are the interactions and connections that a business has with its customers. They are essential for creating loyal customers, increasing customer satisfaction, and generating repeat sales. Customer relationships can be influenced by many factors, such as the value proposition, the customer segments, the channels, and the revenue streams of a business model. In this article, we will explore how to use the Business Model Canvas (BMC) to design and improve customer relationships.

Key Takeaways

Customer relationships are the interactions and connections that a business has with its customers.

The BMC is a strategic tool that helps to design and improve customer relationships.

Customer relationships can be influenced by many factors, such as the value proposition, the customer segments, the channels, and the revenue streams of a business model.

Customer relationships can be guided by three main motivations: customer acquisition, customer retention, and sales expansion.

Customer relationships can be measured by metrics such as customer satisfaction score, net promoter score, and customer lifetime value.

The BMC is a strategic tool that helps entrepreneurs and innovators to visualize, test, and refine their business ideas. It consists of nine building blocks that describe the key elements of a business model: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. The BMC can help to identify and prioritize the most important aspects of customer relationships for each customer segment.

Here are seven ways to build customer relationships with BMC:

1. Define your customer segments.

Customer segments are the groups of people or organizations that a business aims to serve. They have different needs, preferences, behaviors, and characteristics that affect how they perceive and value a product or service. By defining your customer segments, you can understand who your customers are, what they want, and how they behave. This will help you to tailor your customer relationships accordingly.

2. Identify your value proposition.

Value proposition is the reason why customers choose one product or service over another. It describes the benefits that a product or service offers to solve a customer problem or satisfy a customer need. By identifying your value proposition, you can communicate how your product or service creates value for your customers and why they should buy from you. This will help you to attract and retain customers.

3. Choose your channels.

Channels are the ways that a business delivers its value proposition to its customers. They include communication, distribution, and sales channels. By choosing your channels, you can decide how to reach your customers, how to raise awareness about your product or service, how to deliver your product or service, and how to collect payment from your customers. This will help you to optimize your customer experience and convenience.

4. Design your customer relationships.

Customer relationships are the types of interactions that a business establishes with its customers. They can range from personal to automated, from transactional to relational, from self-service to assisted service. By designing your customer relationships, you can decide how to acquire new customers, how to retain existing customers, and how to increase sales from existing customers. This will help you to create loyal customers and advocates for your brand.

5. Define your revenue streams.

Revenue streams are the sources of income that a business generates from its customers. They include the pricing strategies, payment methods, and revenue models that a business uses to capture value from its customers. By defining your revenue streams, you can determine how much money you can make from each customer segment and how you can increase your profitability and sustainability.

6. Align your key resources, key activities, and key partnerships.

Key resources are the assets that a business needs to create and deliver its value proposition to its customers. Key activities are the actions that a business performs to create and deliver its value proposition to its customers. Key partnerships are the network of suppliers and partners that a business relies on to create and deliver its value proposition to its customers. By aligning your key resources, key activities, and key partnerships with your customer relationships, you can ensure that you have the capabilities and support to deliver on your promises to your customers.

7. Manage your cost structure.

Cost structure is the sum of all the costs that a business incurs to create and deliver its value proposition to its customers. It includes fixed costs and variable costs, economies of scale and economies of scope. By managing your cost structure, you can optimize your expenses and maximize your margins.

By following these seven steps, you can use the BMC to build customer relationships that are aligned with your business model and that create value for both you and your customers.

Tips

Use the BMC to visualize and test your assumptions about your customer relationships.

Align your customer relationships with your value proposition and your customer segments.

Choose the channels that best suit your customer relationships and your revenue streams.

Design your customer relationships to create value for both you and your customers.

Monitor and improve your customer relationships based on feedback and data.

Customer Relationship BMC: A Statistical Report

Customer relationship is one of the key components of the business model canvas (BMC), a tool that helps entrepreneurs and managers to design, analyze, and improve their business models. Customer relationship refers to the type and quality of the interaction that a company establishes with its customer segments, which can have a significant impact on customer satisfaction, loyalty, and profitability. In this report, we will present some statistics about the global demand for customer relationship BMC, and how it varies across different industries and regions.

Global Demand for Customer Relationship BMC

According to a report by Research and Markets, the global customer relationship management (CRM) market size was valued at USD 58.04 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 14.2% from 2021 to 2028 . CRM is a software solution that enables businesses to manage their customer interactions across various channels and touchpoints, such as websites, social media, email, phone, or physical stores. CRM is one of the main applications of customer relationship BMC, as it helps businesses to acquire, retain, and grow their customer base.

The demand for CRM is driven by several factors, such as the increasing adoption of cloud-based solutions, the growing need for data-driven decision making, the rising competition and customer expectations, and the emergence of new technologies such as artificial intelligence (AI), machine learning (ML), and big data analytics. The report also identifies some of the key players in the CRM market, such as Salesforce, Oracle, SAP, Microsoft, Adobe, IBM, HubSpot, Zoho, Zendesk, and Freshworks.

The CRM market is segmented by type, deployment mode, organization size, industry vertical, and region. The type segment includes operational CRM, analytical CRM, collaborative CRM, and others. The deployment mode segment includes cloud-based and on-premise. The organization size segment includes large enterprises and small and medium-sized enterprises (SMEs). The industry vertical segment includes banking, financial services, and insurance (BFSI), retail and e-commerce, healthcare and life sciences, manufacturing, telecom and IT, government and public sector, media and entertainment, education, and others. The region segment includes North America, Europe, Asia-Pacific (APAC), Latin America (LATAM), and Middle East and Africa (MEA).

The report provides the market share and revenue of each segment for the year 2020. The following table summarizes some of the key statistics:

Segment	Market Share (%)	Revenue (USD Billion)
Type
Operational CRM	38.7	22.46
Analytical CRM	28.9	16.76
Collaborative CRM	19.2	11.14
Others	13.2	7.66
Deployment Mode
Cloud-based	69.3	40.21
On-premise	30.7	17.82
Organization Size
Large Enterprises	57.8	33.52
SMEs	42.2	24.51
Industry Vertical
BFSI	23.4	13.58
Retail and E-commerce	18.7	10.84
Healthcare and Life Sciences	14.3	8.3
Manufacturing	11.2	6.5
Telecom and IT	9.6	5.57
Government and Public Sector	7.4	4.29
Media and Entertainment	6.1	3.54
Education	4.8	2.79
Others	4.5	2.61
Region
North America	36.5	21.18
Europe	28.7	16.64
APAC	21.3	12.35
LATAM	7.8	4.53
MEA	5.7	3.31

Source: Research and Markets

The table shows that operational CRM has the highest market share among the types of CRM, followed by analytical CRM and collaborative CRM. Cloud-based deployment mode dominates the market over on-premise mode, as it offers more scalability, flexibility, and cost-effectiveness. Large enterprises account for more than half of the market revenue, as they have more complex and diverse customer needs and challenges. BFSI is the leading industry vertical in terms of CRM adoption, as it deals with high volumes of customer data and transactions and requires high levels of security, compliance, and personalization.

Retail and e-commerce is the second-largest industry vertical, as it faces intense competition and customer demands and relies on CRM to enhance customer loyalty, retention, and cross-selling. Healthcare and life sciences is the third-largest industry vertical, as it needs to manage patient records, appointments, prescriptions, and feedback and improve patient outcomes and satisfaction.

North America is the largest regional market for CRM, as it has a mature and advanced IT infrastructure and a large number of CRM vendors and early adopters.

Europe is the second-largest regional market, as it has a strong presence of SMEs and a growing demand for cloud-based CRM solutions. APAC is the fastest-growing regional market, as it has a large and diverse customer base and a rising adoption of digital technologies and e-commerce platforms.

Customer relationship BMC is a vital component of any business model, as it determines how a company interacts with its customers and creates value for them. CRM is one of the main applications of customer relationship BMC, as it enables businesses to manage their customer interactions across various channels and touchpoints and improve their customer satisfaction, loyalty, and profitability.

The global CRM market is expected to grow at a high rate in the next few years, driven by various factors such as cloud-based solutions, data-driven decision making, rising competition and customer expectations, and new technologies such as AI, ML, and big data analytics. The CRM market is segmented by type, deployment mode, organization size, industry vertical, and region, each with different market shares and revenues.

The report also identifies some of the key players in the CRM market, such as Salesforce, Oracle, SAP, Microsoft, Adobe, IBM, HubSpot, Zoho, Zendesk, and Freshworks.

Frequently Asked Questions

What are some examples of customer relationship types in the BMC?
Some examples of customer relationship types in the BMC are: personal assistance, dedicated personal assistance, self-service, automated service, communities, and co-creation.

How can I measure the effectiveness of my customer relationships in the BMC?
You can measure the effectiveness of your customer relationships in the BMC by using metrics such as customer acquisition cost, customer retention rate, customer lifetime value, customer satisfaction score, net promoter score, and customer loyalty index.

How can I improve my customer relationships in the BMC?
You can improve your customer relationships in the BMC by using techniques such as: segmenting your customers, personalizing your communication, providing value-added services, soliciting feedback, resolving complaints, rewarding loyalty, and creating referrals.

What are some benefits of having strong customer relationships in the BMC?
Some benefits of having strong customer relationships in the BMC are: increased customer loyalty, reduced customer churn, enhanced customer advocacy, improved customer satisfaction, and higher revenue and profitability.

What are some challenges of managing customer relationships in the BMC?
Some challenges of managing customer relationships in the BMC are: balancing the costs and benefits of different relationship types, maintaining consistency and quality across different channels, integrating different systems and data sources, and adapting to changing customer expectations and behaviors.

References:

https://en.wikipedia.org/wiki/Special:BookSources/978-1-62825-664-2

https://digitalleadership.com/blog/customer-relationships-bmc/