Generating value is not a new concept or a trend that will vanish along the following months. Value is what drives your customers to buy from you. The problem you may face is understanding it within the usage of social media. Actually, even the most advanced marketers and strategists are having to test-test-test in order to extract the maximum of the new media channels.
To speed up the learning process of those already testing I am going to introduce you to:
- The value chain in the company
- The Business Model Canvas as a tool to analyse your value generation
- How to create value with social media
Value Chain in the Internet Era
According to Michael Porter, internet has improved the speed of transmission of information, interlinkage, and its diffusion in real-time along the full value chain. Internet first, and the social networking sites now, have achieved the availability of more and better information that allows companies to optimise both the primary activities (i.e.manufacturing) and the support ones (i.e.procurement). Wealth and quality of information is allowing us to improve the productivity and efficiency of our processes and resources.
Business Model Canvas
Business Model Canvas is a simple but powerful methodology to explain, analyse, and develop your business strategy. The authors, Alexander Osterwalder and Yves Pigneur, propose a canvas-style representation of the business model which dissects the value chain of an organisation into nine sections: key partners, key activities, key resources, value proposition, customer relationship, channels, customer segments, cost structure, and revenue streams.
Social Media in your Business Model
If you are willing to use the Business Canvas Model for designing your social media strategy let me recommend you the following bullet points, which coincide with the nine sections of the canvas:
- Channels; besides the social selling, new media channels can be useful for improving the engagement with your target market, keeping in touch with your customers, or simply promoting your products. Independently of what you are going to do, you need to choose which social networking sites are going to have presence on, and how you are going to develop it.
- Customer segments; it may be useful to know the profile of our target market, so we can choose accordingly the channels where the users do match better these profiles.
- Customer relationship; once generated a lead or generated the attention, how are you going to close the transaction? (online vs offline).
- Value proposition; which problem are you helping your clients solve?, what is making you different from the rest of the solutions in the market? Use social media to do your market research (i.e.great low-cost alternative to focus groups) and for customer service.
- Key resources; nowadays the war for talent can be won by using social media; create a brand as an employer, identify better candidates, improve the full employee’s lifetime cycle.
- Key activities; did you know that social media can help you be a better project manager? (i.e.team communication).
- Key partners; social media can help you identify them, strengthen relationships, and improve collaboration efficiency.
- Cost structure; would the usage of social media channels help you save money?
- Revenue streams; will social media induce new sources of revenue increasing your turnover?
Finally, it is recommended you practice first with a well known model (would you be able to create the Business Model Canvas behind the series of games of ‘Angry Birds‘?). Then, once you have got used to the canvas, try filling your current values considering no social media strategy to, at a later stage, complete the model with the social media bits. Moreover, it is going to be more dynamic and efficiency if you gamify the process: bring your team into a brainstorming session and build it together!
* A version of this post was first published on Socialancer.com, 10th July 2012. Original in Spanish.