3.2.4 Social media options for activity Business model: business model channels

This section looks at the channels of the business model and the opportunities to support this part of the business model through social media. We analyze the channels of the business model and examine the possibilities of social media to support these channels in order to derive the requirements for the social media strategy.

Reading time: approx. 20 minutes

Learning Goal: Understand business model channels and be able to apply social media to those channels.

Exercises: Exercises are in the PDF of all exercises of this course. Download it from here.

Social media for business model channels

The objective is to support the company’s successin the channels of the business model with social media. The result of our work, if necessary, are goals on two levels.

  • Business model: adapting channels, behavior and work in the channels of the business model due to the potential for change of social media on the channels.
  • Social media strategy: Recognition of the options for action and the resulting tasks and goals in social media for supporting the business model at the channel level.

Explanation of channels: At the business model level, we define channels as those that are essential to the success of the company. These are usually the communication, sales and distribution channels of the company. Social media channels are not the same as business model channels unless those social media channels are essential to the success of the business. Then the social media channels also become channels of the business model.

For input on our social media strategy are

  • the channels used and the effect of social media on these channels in terms of supporting the success of the channels
  • the specific tasks to be performed within each channel,

to note. We are guided by the channels of the Business Canvas by Osterwalder & Pigneur. In this way, we cover the breadth of what channels contribute to the success of the business model and ensure that we support this breadth as completely as feasible through social media. And thus use social media as extensively as possible for this part of the business model.

Osterwalder & Pigneur divide the tasks within the channels into phases – so-called channel phases. These are

  • Attention
  • Evaluation
  • Purchase
  • Mediation of the value offer
  • After Sales

and have significance for all channels used by the business model (i.e., also partner channels and own channels, indirect and direct channels).

Channel types of a business model

Osterwalder & Pigneur also distinguish channels by channel type. These are

  • Own channels
  • Partner channels.

In addition, they distinguish into direct or indirect channel types.

  • direct channel types:
    • own sales departments / distribution departments and
    • Internet sales
  • Indirect channel types
    • own branches (as an instance between company and customer)
    • Partner branches
    • Wholesaler

Channel phases and social media

In order for social media to support and drive business success – in the channels and channel phases – it makes sense to orient social media performance in the channels of the business model to the channel phases. This means that we support the respective impact in the individual channel phases with corresponding social media services that are geared to this channel phase.

If we ignore the channel phases in our social media services for our business model, our social media strategy is missing this important component. If we briefly recall again what the channels of the business model generally include – the communication channels as well as the sales and distribution channels – then it becomes clearer what a poor orientation of the social media services and offers means for the support of the channels of the business model:

Sales / distribution and marketing / corporate communications are insufficiently supported - in terms of opportunities - by social media without alignment with the channel phases.
Channel phase attention and social media

Performance in the channel phase: In the channel phase Attention, we draw the attention (of our target group) to the products and services of our company (Osterwalder & Pigneur).

Task for social media: Social media can be used to attract attention via

  • traditional advertising in social media,
  • useful content in a transmitter-receiver mode and
  • via the inclusion of social communication and networking (e.g., in a community or social network).

generate.

Channel phase assessment and social media

Performance in the channel phase: In the channel phase assessment we help the customer to evaluate the value proposition of our company (Osterwalder & Pigneur).

Task for social media : A value proposition that cannot be judged in terms of content or assessed in terms of value will not be bought. The evaluation of value propositions through direct communication with the user as well as through the integration of other users’ experiences with the value propositions can be aptly supported, facilitated and disseminated in and with the help of social media. Again, please only act in a way that is social media compatible and beneficial to the user.

Channel phase Communicating a value proposition and social media

Performance in the channel phase: In the channel phase mediation, we convey a value proposition of our company (Osterwalder & Pigneur) to customers.

Task for social media: We use social media to communicate our value propositions to users, i.e. to explain them in terms of content and value. Social media provides the opportunity for this task to involve other social media users – and their experience and evaluation of our value proposition – in this process. This gives our content greater reach and credibility.

Channel phase After Sales and Social Media

Performance in the channel phase : In the channel phase After Sales we support the customer after the purchase (Osterwalder & Pigneur).

Task for social media: Supporting the company’s after-sales goals in line with the applicable performance potential of social media. We keep in mind that social media, by allowing additional opportunities for user engagement and support, can potentially influence and change after-sales goals, achieving results that go beyond traditional after-sales goals. An example of this is the use of the Community or Audience usage format for support functions with the integration of user-generated content (experiences, recommendations, etc.).

Change potential of social media on the channels of a business model

Social media can change business models. Of course, this also affects the channels of a business model. Typical changes are found in the

  • Importance of channels: the communication or sales channel loses importance because other channels with social media elements bring more benefits for the user. Of course, a channel can also gain in importance through additional social media elements.
  • Channel usage: the way the channel is used changes with the addition of social media elements.

If it is clear that social media has a changing effect on the channels of the business model, this is a valuable insight. This finding must be handled independently by the entity responsible for the business model. The social media department can play a supporting role here, but it does not have the lead role. It only makes sense to interrupt social media strategy development until this insight has been conclusively addressed in exceptional cases.

Change potential for own channels

Own sales / distribution: The integration of social media functions at the point of sales enables both the

  • Dissemination of offers and the creation of attention for these offers in the social network of users

as well as the integration of social networks and users in the evaluation of offers through recommendations from other social media users. In implementation, displays at the POS or mobile communication can be used for this purpose, for example.

Internet sales/distribution: The integration of social media functions in Internet sales enables the same benefits in principle as in integration at the point of sale in stationary sales.

Potential for change from social media to partner channels:

Partner stores: By integrating social media functions – stationary or mobile – we not only get the support as described for our own stationary sales, but also a communicative channel to the potential customer in the purchase decision at the point of sale of partners. This channel can be used to build a customer relationship and with the help of social media to build supporters of our company and our services in social media.

Wholesale: With the help of social media, we can also be present at the point of sale via appropriate forms of communication – stationary and mobile – and support the sales activities of our wholesale partners in this way. This can be done via stationary communications, mobile communications, customized and automated content. Again, in this way – for both b2b and b2c – building direct contacts and relationships with the potential customer would be an added value through social media.

Identify and formulate options for action

Options for action are the alternative courses of action from which a company can choose based on its individual situation. For a company to have that choice, there must be alternatives and those alternatives must be recognized.

Options for action have an impact on the content such as the success or structures of the social media strategy and its implementation. In this section, you will learn in which areas of the channels of a business model there may be options for action for your social media strategy.

Options for action can be the channels themselves to be supported by social media. Failure to support all channels of a business model through social media can

  • be due to a lack of or very low social media affinity.
  • be a question of focusing on specific channels of the business model.
  • be prompted by a lack of resources.

Action option: Decide which channels of the business model are supported by social media.

The social media impact to be used can lead to alternative actions. The company may, for example

  • Leverage content to create the impact you need on social media.
  • Design user benefits in different forms.
  • Use or forgo opportunities for participation.
  • Vary motivation methods or use motivational structures within business model channels.

If several social media usage formats are suitable for the company for use in the channels of the business model, there are also options for action here.

General social media options for action for the channels of the business model

  • Channels to be supported with social media.
  • Channel phases to be handled by social media and the social media goals to be achieved therein.
  • Type of social media impact to be used and references to the content in question.
  • Social media usage formats to be used.

The more concretely we formulate our input – i.e., the requirements for the social media strategy – for the channels, the better our channels will be supported by our social media strategy. Remember that unclear and imprecise strategy requirements lead to a much less powerful and successful strategy.

Application

Use of social media for the channels of the business model

The procedure

  1. Define the channels of the business model to be supported by social media.
  2. Define the social media affinity of the business model’s channels.
  3. Social media support in the individual channel phases.
  4. Requirements for the social media strategy from the channels of the business model

Stakeholders: Social media management and those responsible for the channels of the business model.

Outcome: Overview of the impact and use of social media for business model channels.

Use of the result: The result is used as the basis for the social media strategy in the strategy development via the social media action options.

We work out an overview of the individual contents according to the worksheet shown as an example.

The individual work steps to the result are described below.

Definition of the channels of the business model

Work step Definition of the channels of the business model: As a first step, we list the channels of the business model that we want to support with the help of social media. Normally, this should be all channels of the business model. If it is clear that a channel will no longer be relevant for the company in the near future (management decision/adjustment of the business model) or does not have social media affinity, this channel can be ignored in the development of the social media strategy.

Lack of social media affinity of a channel of the business model
The decision not to include a channel of the business model in the social media strategy development / not to support it with social media due to a lack of social media affinity should be coordinated with those responsible for the business model and these channels.

We compile the channels of our business model (not the social media channels that may already be in use) and describe the individual channels according to the structure of Osterwalder and Pigneur’s Business Canvas in

  • own and foreign channels
  • Sales/field service, branches, wholesale, Internet

(Channel Types).

We need this overview to be able to examine the individual impact of social media on the channels of the business model. Both the support of the existing channels of the business model by social media and the consideration and use of the change potential of social media for these channels are important for the success of the business model.

Own channels – foreign channels

The question arises more often whether we should only consider the business model’s own channels in this context. The answer is simple: we have to consider all channels that are relevant for the success of the company – including external channels.

Imagine the opportunities that can arise if you can systematically influence decisions at the POS to your advantage through social media. Determine if this option is generally available:

  • check how to connect social media with the respective channel and use it accordingly,
  • make this opportunity and its practical implementation part of the social media strategy,
  • develop and implement appropriate functions, motivations and offers.

Impact of social media on channel types

Sales Department

Question wording: What impact does social media have on our sales department? For example, are there effects from the levels of

  • Topics and contents
  • social context
  • network effect
  • Participation
  • Social media usage formats

Example impact: When social media users allow their behavior to be influenced by the experiences and recommendations of other social media users with our sales department, social media has an impact on that channel. We can see the degree of this impact by the presence of the issue in social media.

We examine both the ACTUAL state and the benefits that could arise for users if this state were to occur (TARGET state).

Internet sales

Question wording: What impact does social media have on our Internet sales? For example, are there effects from the levels of

  • Topics and contents
  • social context
  • network effect
  • Social media usage formats

We examine both the ACTUAL state and the benefits that could arise for users.

Example of impact: When users make purchasing decisions based on the experiences of other users, this is a typical example of social media impact. Exemplary here are, for example, experiences with tourist offers in Internet sales.

Own branches

Question: What impact does social media have on our own stores? For example, are there effects from the levels of

  • Topics and contents
  • social context
  • network effect
  • Social media usage formats

Example impact: When users benefit or could benefit from recommendations from other users to sell in our stores, social media has a clear impact on this channel type. Think here of recommendations on new products in stores spread by social media users in their network.

We examine both the ACTUAL state and the benefits that could arise for users from the respective state.

Partner branches

Question: What impact does social media have on our partner branches? For example, are there effects from the levels of

  • Topics and contents / Information
  • social context
  • network effect
  • Social media usage formats

In principle, the same applies to partner branches as to our own branches. If the company can use social media to support its own sales at the POS of partner stores, this is an advantage and progress compared to the situation without this possibility.

The opportunities for this are offered thanks to mobile communication via information, social context and participation. Integrated into the social networks of the users, a network effect can also be created if the company succeeds in designing a concrete user benefit with a corresponding network effect.

Example: You sell jeans through specialty retailers and department stores. If you succeed in influencing decision-making processes by providing information at the POS, this is an advantage. Incorporate social context via social interaction at POS, tap into personal networks. If you create an opportunity for participation that reaches further parts of the users’ private network, you can achieve a viral effect for your performance in the partner branches via a network effect.

We examine both the ACTUAL state and the benefits that could arise for users.

Wholesale

Question wording: What impact does social media have on our wholesale customers? For example, are there effects from the levels of

  • social context
  • network effect
  • Social media usage formats
Social media effect single channel

We summarize the social media impact for the business model channels for each channel.

Benefits of the process: we get an overview of the social media impact on the individual channel, which we need as a basis for our options for action in social media – for the individual channel and for all channels of the business model. At the same time, we recognize channels without social media impact and can hide them in further processes.

Overview social media impact

We summarize the social media impact for the channels of the business model in an overview.

Social media affinity of the business model channels

Note: The social media affinity of channel types is not universal but individual. I. e.

  • one channel type can have different social media affinity in different industries.
  • Social media affinity can also be influenced by corresponding user benefits. UserBenefits can be defined by the companies.

Consequence: This means that we should always check the social media affinity of a channel type – for the specific channel.

The definition of the social media affinity of the channels of the business model indirectly describes how far we can support the success of the company in the respective channel through social media. We use the presence of the channel in social media as a criterion as well as the user benefits that social media enables within the channel.

Explanation and examples
  • If social media users regularly talk about purchases in a particular channel (e.g., an Internet store or a chain store), it can be assumed that this channel has a higher social media affinity.
  • If users are looking for the experiences and recommendations of other users in connection with this channel, the social media affinity of this channel can be rated even higher.

If there is permanent communication in social media via the use of a specific channel, we can assume a higher social media affinity.

Question the actual state
Don’t take the current state as an immutable law of nature. It is possible that this current state is simply the result of a lack of incentives and opportunities. Check – via analog situations – whether this is generally the case and users really do not talk about purchasing in certain channels as a matter of principle.

We examine the impact of social media on each type of channel that the company uses and on the channel phases that exist within it.

Our question

  • How can we use social media to strengthen our impact / position in each channel phase (application).

We define what impact we expect social media to have on the channels used in our business model. To do this, we start with the social media affinity of the individual channels (4.5.2).

We check the social media affinity of the individual channels based on their presence in social media. A channel (of the business model) that is neither communicatively nor structurally present in social media has a lower social media affinity than a channel that is a topic in social media, or is even structurally present.

Social media in the channel phases

We check what impact social media has / can have on the individual channel phase of the selected channel of our business model. To do this, we work through the individual channel phases and examine the impact of social media within each channel phase. In addition, we note down tasks for the social media strategy that can be derived from this.

Social media impact

In all phases, we are dealing with topics and subject areas, user benefits that support a desired behavior, usage formats in which we use social media, motivation with which we support desired behavior, and participation of social media users to support the desired effect.

Competitive situation

Based on the areas mentioned above (topics, user benefits, usage formats, motivation, participation), we can not only identify the opportunities for using social media to support the channels of the business model, but also the competitive situation. This, in turn, will indicate whether it will be easy, difficult, or almost impossible to compete in these areas to our advantage.

Channel phase attention

Questions

  • How do we draw attention (in the respective channel) to the products / services of our company? Here we list how to capture the attention of social media users and achieve the impact possible with social media.
  • Which topics and content are suitable to generate a desired / suitable for our goals attention in the respective channel? In principle, topics that are directly related to our services are suitable for this, as well as topics that are suitable for creating attention.
  • What user benefits from social media contribute to the desired attention or tap into our company’s support from social media users in creating that attention?
  • What participation opportunities increase awareness of us in the desired channel?
  • How can we motivate users to generate attention for us?

Channel phase assessment

Questions

How do we help our customers evaluate our company’s value proposition? Here we list what social media can do to influence assessments and ratings. This includes, for example, the experiences and ratings of other customers or exchanges with other customers to evaluate our value propositions. We can use static content or dynamic content such as exchanges in networks or in the context of a community.

This level also includes the question of which user benefits motivate users to participate in these processes and how this participation should be designed in order to be as attractive as possible for users.

In this channel phase, topics and subject areas related to the evaluation of performance are relevant, usage formats that can provide social media users with required content or involve other users in this process – including appropriate motivation and participation.

Social media impact channel phases purchase

Here we are looking at whether social media itself as a channel facilitates the purchase of our services, how we can use social media to facilitate the purchase of our services in the previous channels.

Social media impact channel phase mediation

How do we communicate our value proposition (and its value) to our customers in terms of content? Here we list the company’s activities and check how we can support the existing activities through social media via the described approach. At the same time, we are examining whether social media itself can be used as a channel for this.

Social Media Impact Channel Phase After Sales

How do we support our customers so far after the purchase? Here, we list existing offerings and review this approach to see how we can use social media to support them.

In parallel, we check whether social media itself makes sense as a channel for after sales and customer retention.

In both cases, we define the topics and subject areas in which we can be active with social media, the user benefits, the forms of motivation and participation and, last but not least, the usage formats.

Overview Single Channel Channel Phases

We summarize the insights from each channel phase of a channel into an overview for each channel in our business model.

Benefit: this gives us an overview per channel of our business model, how we can support success in this channel in the individual channel phases with social media.

Sources: the worksheets of each channel phase.

Overview of channels, channel phases and social media impact

We summarize the insights from each channel phase of a channel into an overview for each channel in our business model.

Benefit: this gives us an overview of all the channels in our business model, how we can support success in this channel in the individual channel phases with social media.

Sources: the worksheets of each channel.

Requirements for the social media strategy

Via the described approach, we have gained an overview of whether and how we can use social media for the channels of the business model.

This results in concrete requirements for the future social media strategy to support the channels of the business model. A strategy that does not meet these requirements is incomplete.

Overview of all channels of the business model

We summarize the findings on the social media affinity of the individual channels.

Benefit: We identify at a glance the social media affinity of all channels and channel types and the possibility un.

Exercises

The individual exercises for these topics can be found under “Materials” linked between the heading of this section and the table of contents.

Exercises own company

Define and describe the

  • channels used in your company's business model.
  • The channel types of your business model - i.e. whether they are own channels or partner channels and whether they are direct and / or indirect channels.
  • The channel phases of the respective channel type and its practical design.
  • the impact / use of social media on and for the channel types as well as the individual channel phases.