Business model innovation: Focus on customer experience

Abstract

Visualization of management tools has become a must in the past decade. Its importance cannot be neglected; visual signs define the direction our brain pays attention to, and therefore affect deeply what and how human beings contemplate their environment. Recent tools in business management such as business models include visual elements to support the attracting of attention. A vast amount of literature has been published to study and examine different business model constructs and their applicability and effectiveness in different contexts. However, scant evidence exists of how elements in a business model construct can support innovation, and how visualization of these elements relates to innovating actions. Business models are mostly focused on the creation and delivery of a customer value proposition, which describes a bundle of products and services. However, this approach is often delimited to existing bundles of products and services. Customer experience emerges from interactions between a firm and its customer, as perceived through a customer's conscious and subconscious mind; it is not just about the ‘what’ but also about the ‘how’. Therefore, customer experience should play a central role in business model innovation. This paper introduces a new business model framework, which focuses the attention on customer experience. In addition to the customer value proposition, customer experience can be considered as an important and hard-to-imitate element of a company's competitive advantage. The proposed model was tested with two start-up company cases and evaluated by three industry experts. The findings demonstrated that by complementing the value proposition with customer experience in a business model construct, the focus also shifts towards customer experience driven business model innovation. The external assessment confirmed the notions from the case workshops, which open promising pathways for further research.