Business model innovation is about identifying new ideas to create and deliver additional value to clients. There are many ways of course but here are the five most common strategies.
1- Value Add Services
This is about providing value add service in addition to the core product or service. This could be something as simple as a home delivery service to something more sophisticated such as providing movies with a broadband connection. A good example of this is the Video on Demand value add service provided by internet service providers
New ways of reaching the customer. For example, the combination of product showrooms and ecommerce as opposed to traditional retail.
2- Enhancing Customer Experience and Convenience
Online retail is leading the way in providing customers with enhanced convenience and experience with e-commerce options to reduce the effort of shopping and virtual product showrooms that allow customers to browse in the comfort of their homes.
3- Changing the Pricing Model
This includes things like a monthly subscription to watch as many movies as you want to freemium services that only charge when there is a need for support.
4- Optimizing Productivity
Here the focus is on tools that enable clients to do something much faster than previously possible. A great example of this is Canva, the web based graphics tool that allows ordinary users with little or no graphics software experience to produce stunning images and publications. This is the space where artificial intelligence (AI) will come into its own in areas such as customer support with automated chatbots or helping HR to sift through large amounts of applicant data to identify potential recruits.
5- Redefining Quality
This is probably the most difficult to deliver but the most significant in terms of impact with clients. In the snacks business in the US, the startup Daily Harvest provides frozen snacks based on organic plant-based ingredients and healthy, artisanal quality recipes.
It is useful to note that just one of these types of innovation in the business model can have a significant impact on the market but when more than one of these innovations is offered simultaneously via a new product or a new product update – for example Redefining Quality and a new Pricing Model, the impact can be extraordinary.