The three letter-number-letter abbreviations in the title of the article may seem to be mere labels with not much significance behind them. However, these are the terms that subconsciously invoke certain associations in people, and shape their expectations. Below we are looking at the concepts behind these models and how H2H, the newcomer in the list, in changing the game. But first things first – let’s define what a business model actually is.
What is a Business model?
Simply put it’s the way a company is going to make money. More specifically, it is the logic that the company follows to deliver value to its target customers at an appropriate cost.
Now we will provide a big-picture view of the essence of the aforementioned three models and how they relate to the IT industry.
Business to Business model operates on the level of company management – you work with the C-suite to figure out what products or services are needed to solve the issue at hand and to meet the requirements posed. B2B companies are all about reputation and service levels – client companies entrust them lots of sensitive and critical data, so handling it with care and being available in case of force majeure is a must.
Main focus areas of B2B:
- Security – companies collect tons of data (transaction records, employee files, financial reports, etc.) that in most cases is not destined for display in public.
- Scalability – enterprise can grow N-fold in a few years, or acquire another company, so having solutions that can be expanded across the board will eliminate the need to switch to new platform or upgrade the existing infrastructure.
- 24/7 Support – as mentioned earlier, immediate responsiveness is a necessity when one minute of downtime may cost your client thousands of dollars.
- Reliability – although similar idea is mentioned in the previous point, support is still reactive, while ensuring preventive maintenance and constant health monitoring can promote quality to the new level.
- Comprehensiveness – company’s needs may change, so it’s great to have a bunch of additional modules and extensions on offer, connectors for integration with other corporate software, etc.
Business to clients (or customers) model implies catering to the needs of individuals – games, apps, editors or utilities that are acquired by people for personal use. In this segment the rules are different – you pay more attention to emotional connection and usability – if people feel frustrated or unnoticed, they will leave.
Main focus areas of B2C:
- User experience – ease of use, engaging and intuitive interface, and an element of fun are important to make the customer’s journey through your app seamless and fulfilling. And you don’t want them to open the user manual!
- Fit – give them what they want. You cannot be everything to everyone, so be sure to figure out who your target customers are and what they really need.
- Cost – pricing is always a concern, so be reasonable, and clearly declare what you charge your customers for – uniqueness, quality, opportunities, etc.
- Loyalty program – great extension of your pricing strategy that will help with both customer retention and stimulating more purchases.
- Network effect – if you create a product or service for general public, people will be more attracted to using it when they know that quite a few people (friends, relatives, coworkers, etc.) are already using it. People are social animals, so becoming a part of a group or community makes them feel better.
Human to human business model is not a new business model coexisting with B2B and B2C, but rather a new paradigm that perceives the business world from a different perspective. It adds the attitudinal dimension making your relationship with your customer a personal affair. Ultimately, it all boils down to an individual person – be it a housewife, a corporate clerk, or a CEO. Listen to them like their psychiatrist, fix their problems like their lawyer, be understanding to their weaknesses like their doctor.
Main focus areas of H2H
- Listening – do not pitch – people are tired of others telling them what they need or want. Let the clients pitch their situation to you. It’s all about them getting where they want to be, not you telling them what you are good at.
- Flexibility – if you listen to your customers, you will have to adapt. Everything changes – objectives, budgets, timing requirements – and you too have to be ready for a bend or a bow like a proficient yogi (this is where Agile methodology comes into play).
- Humanness – admit your mistakes. Don’t try to act like a perfect flawless mechanism – you (and your company) will never be one, so take it easy. Owning your faults, talking about them openly, and addressing them professionally are the qualities people respect.
- Problem-solving – making the difference may not be enough, it’s making the meaning that matters. Your solution has to be meaningful for the client because it addresses the pressing needs and gives them peace of mind.
- Saying No – you are not a cat to be loved by everyone. Moreover, it’s not very profitable. Concentrate on doing what you like for people that you like (and that like you in return) – this is the key to productive cooperation.
If you ask how the business model canvas template for H2H is different from the one for B2B or B2C, the answer will be “It’s not”. It’s the approach you take to implement your goals and the values that guide you along the way that make the difference.