Basic Elements of a Business Model
In the simplest terms, a
Business Model is how a
business makes money.
This introductory presentation
is intended to introduce a
framework for further thought
and discussion through which
AIRN will define its Business
Model.
Select features
embedded in product or
service
Design mechanisms to
capture value
Confirm available revenue
streams
Determine benefit to the
customer from using the
product or service
Identify market segments
to be targeted
EMBEDDED SERVICES -- MEMBER BENEFITS
AIRN services must have
features which its members
perceive as valuable (i.e., as
beneficial to them).
It is important to remember that
members pay dues or fees because
they want to solve a problem or
meet a need. Members, whether
openly or not, will always be
asking the question, “What’s in
it for me?”
Features are what the service
provides. Benefits are the
reasons members pay for the
service.
Identify Member Benefits
Successfully and sustainably developing
AIRN requires that its services meet member
needs.
In most cases, the only thing your customer
is thinking is, "What's in it for me?" The
thing your customer cares about is, "Will
this work for me?“
Just because you are partial to a particular
service does not mean the market will
share your feelings.
To be sustainable, AIRN must provide
services that meet its members real or
perceived needs.
Segmentation Marketing
Market segmentation is the
subdividing the AIRN membership
into a group or groups of people who
have similar needs.
It is important to divide members into
groups and then decide which services
best fit each group. AIRN also may
determine after defining the member
segments that the ideal member is one
who can belong to two or more of the
of the groups shown in the chart and
discussed in the next slides.
Key Market Segments
The “Golden Egg”
Revenue Streams
The 80/20 rule: 20% of AIRN service
will consume 80% of its time; 20% of its
services will generate 80% of its income.
Analysis can help you see where AIRN
can best utilize time and money.
1. For every service AIRN offers
calculate the total revenue minus total
costs = “profit.”
2. In addition to the actual costs, add in
the average amount of time spent to
deliver each service because time is
another form of money.
3. Combine the information from steps
one and two and identify which services
have the highest “profitability.” It will
help determine whether or not to provide
or continue a member service.
POLITICAL, ECONOMIC, SOCIAL & TECHNOLOGICAL (PEST) ANALYSIS
(Example of factors influencing businesses)
SWOT ANALYSIS