How do I use the Customer Relationships building block of the Business Model Canvas?

Your Customer Relationships describe the types of relationships your company establishes with specific Customer Segments.

Questions to ask

  • What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
  • Which ones have we established?
  • How costly are they?
  • How are they integrated with the rest of our business model?

More about Customer Relationships

About Customer Relationships

Your company should clarify the type of relationship it wants to establish with each Customer Segment. Relationships are established through your different Channels. Relationships can range from personal to automated, from transactional to long-term, and can aim to acquire customers, retain customers, or boost sales (upselling). The type of Customer Relationships you put in place deeply influence the overall customer experience.

Types of Customer Relationships

We can distinguish between several types of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment.

Transactional

This means there is no real relationship between the company and the customer. The company interacts with the customer on a transactional basis. A kiosk at an airport, for example, usually doesn’t really establish a relationship with its customers.

Long-term

This means a long-term and maybe even deep relationship is established between the company and the customer. The company interacts with the customer on a recurring basis.

Personal assistance

This relationship is based on human interaction. The customer can communicate with a real customer representative to get help during the sales process or after the purchase is complete. This may happen onsite at the point of sale, through call centers, by e-mail, or through other means.

Dedicated personal assistance

This relationship involves dedicating a customer representative specifically to an individual client. It represents the deepest and most intimate type of relationship and normally develops over a long period of time. In private banking services, for example, dedicated bankers serve high net worth individuals. Similar relationships can be found in other businesses in the form of key account managers who maintain personal relationships with important customers.

Self-service

In this type of relationship, a company maintains no direct relationship with customers. It provides all the necessary means for customers to help themselves.

Automated services

This type of relationship mixes a more sophisticated form of customer self-service with automated processes. For example, personal online profiles give customers access to customized services. Automated services can recognize individual customers and their characteristics, and offer information related to orders or transactions. At their best, automated services can stimulate a personal relationship (e.g. offering book or movie recommendations).

Communities

Increasingly, companies are utilizing user communities to become more involved with customers/prospects and to facilitate connections between community members. Many companies maintain online communities that allow users to exchange knowledge and solve each other’s problems. Communities can also help companies better understand their customers. Pharmaceutical giant GlaxoSmithKline launched a private online community when it introduced alli, a new prescription-free weight-loss product. GlaxoSmithKline wanted to increase its understanding of the challenges faced by overweight adults, and thereby learn to better manage customer expectations.

Co-creation

More companies are going beyond the traditional customer-vendor relationship to co-create value with customers. Amazon.com invites customers to write reviews and thus create value for other book lovers. Some companies engage customers to assist with the design of new and innovative products. Others, such as YouTube.com, solicit customers to create content for public consumption.

Switching costs

Switching costs indicate how easy or how difficult it is for a customer to switch to a different alternative. For example, when a customer of a data storage provider stores all his data in a proprietary format it might be difficult for him to switch to an alternative provider.

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