Why are business models necessary?

The Importance of the Business Model

The concept of having a business model came into vogue during the dotcom internet boom era. Most assumed that if you had an internet presence, you had it made. Profits would beat a path to your bank account, customers would go out of their way to buy from you, and your firm would prosper.

You know those dreams never materialized. Remember the dot com bubble burst?

The reason for the collapse was not that these companies had an internet business model. It was more likely that they had a faulty business model. Business models matter and it’s best to create the optimum one for your business.

Having a business model is akin to pre-writing a biography for your business. You may have an innovative idea, a new product,  a product or redux, or a renovation of your company.  Business models also help you align the right resources with the right projects at the right time.

Your business model requires sound analysis, good judgment, and forward thinking because it outlines the way you will earn money.

Not only do you need to know a lot about your business, you need to understand the clients, each customer segment, and the environment in which you will operate. This requires accurate appraisals and assumptions about each.

This requires analytical thinking and design skills as well as a healthy dose of creative thinking. If you’re renovating your current firm, you need analytical and recreation thinking. Out with the old and in with the new if you like.

A business model is the foundation of your enterprise.

 

Customer Experience of the Worst Kind

Have you encountered any horrible customer experiences lately?

If not, you may be visiting different places than me. Lately, two outlets for major chains have taken to playing some pretty terrible music. The singers have weak voices and this requires that the recordings be overproduced. This is to cover up the fact the singers really can’t sing.

The issue is that they play the music very loudly. This is worse due to the early morning hour.

It’s not just me. Many of the regulars at these two locations have the same complaint. Think about the word-of-mouth impact this will have on the business. I used to go to one of these locations two or three times a week. Now I go maybe twice a month.

One of the companies sent me a survey, which I filled out advising of the negative experiences. They answered (surprise) with an apology, A couple of days later, they urged me to return.  When I did, the music was blasting. I walked out remember the cold food that was supposed to be hot and the weak coffee.

This is akin to the cumulative experience a customer might have over a number of visits.

Don’t businesses create competitive advantage by giving customer a positive customer experience?

Have you had any experiences like this?