What are the different types of business models, and how does this affect your marketing strategy?
Your business model can vary significantly, so it is crucial to ensure that your digital strategy aligns with it. For instance, creating an aggressive e-commerce strategy for a relationship-based B2B business would not be appropriate. Similarly, relying solely on a content and social media strategy for a sales-focused retailer is unlikely to generate the sales volume you need. Therefore, it is vital to tailor your strategy to fit your specific business model.
There are many definitions of business models, each encompassing a variety of types. Below is a list of three common business models, along with some of their characteristics and how they relate to your digital marketing strategy.
Below are the different types of Business Model:
Mass Market B2C
This model includes organizations that sell products appealing to a broad range of consumers at affordable prices. An example of this type of business is fast-moving consumer goods (FMCG) companies. Selling a large number of products, such as food, clothing, or toys, requires attracting a high volume of customers to your website and stores. This involves creating awareness through above-the-line advertising, acquiring visitors, and converting them into customers. A robust customer service process is also essential. Therefore, all digital channels are relevant in this context.
Niche B2C
This business model is focused on direct-to-consumer sales with a highly targeted offering. This could include selling products to individuals with specific disabilities, those facing financial difficulties, or ultra-high-net-worth individuals. In most of these scenarios, traditional broadcast media is not relevant, as the majority of viewers are unlikely to be potential customers.
Creating trusts and advocacy is essential for success. Therefore, developing a deep content strategy and providing a first-class experience are crucial. Additionally, precision targeting techniques and a comprehensive data strategy are vital components for achieving success in this niche market.
B2B
The B2B model involves organizations such as wholesalers or technology resellers that sell directly to other businesses. In this context, you are interacting with business professionals rather than end consumers. It’s important to remember that these individuals are still human, and human psychology plays a significant role in their decision-making. However, their expectations differ significantly from those of B2C customers.
In a B2B relationship, you may be perceived less as a brand and more as a supplier, which alters the nature of the relationship. Business customers can be more cynical or assertive, as they have specific objectives and goals to achieve. Consequently, traditional marketing messages and sales techniques may be less effective. The emphasis should be on building relationships through Customer Relationship Management (CRM), valuable content, and direct discussions rather than relying heavily on advertising.
Nevertheless, it remains essential for these customers to easily find your website and access the information they need. Within this broader B2B model, there are various specific applications. For example, a B2B IT company may either provide hardware products or offer service support. The service-oriented model would require a greater focus on screen sharing and CRM, while the product-oriented model would prioritize acquisition and conversion strategies.
Freemium
One interesting trend in business models that emerged in 2010 is the freemium model. This approach has gained popularity as it attracts users by offering a portion of a product or service for free while providing a more comprehensive and enjoyable experience for a fee. A notable example of this can be seen in the music streaming industry, with companies like Spotify and Deezer employing this technique.
While we have reviewed some of the more common business models here, it is important to recognize that business models can also evolve over time to meet the changing needs of customers, society, regulators, or other external factors.
