The Business Model Makes the Difference
Six questions to design a customer-centric business
I heard
mention on the podcast the other day that “there are only 9 business models”. I started researching what these might be, but couldn’t find any definitive list or explanation.But I also realised that this is the wrong question. The real question is how to design a business model that is right for you and your customers.
Who’s a business model for?
Having a great product or service is a good start. But consider Netflix and Spotify, they didn’t just thrive because of their products. They revolutionised their industries by rethinking how value is delivered and captured through their business models.
This post introduces a simple, customer-first framework to help you design a practical and effective business model, starting with six essential questions.
The Six Questions
The first three questions determine what aspects of your model your customers will value:
1. How important is flexibility and control for your customer? The answer will determine the degree of customisation you should provide.
Example: LEGO gives people the freedom to be creative and build whatever they imagine with their modular pieces. They even have an online platform where you can design your own creations, making it easy to create something that feels personal and unique.
2. How important are convenience and accessibility? How much do they value instant availability, speed & effort? The answer will determine whether convenience is an essential differentiator and how much of a premium you can charge for it.
Example: Amazon Prime set new customer expectations in by emphasising convenience through fast delivery, easy returns, and bundled services like streaming.
3. What is your customer’s risk tolerance in the context of your product or service? The answer will determine the level of commitment they are willing to make. For example, will they take the risk of a subscription, or prefer to pay per transaction?
Example: Dropbox offers a free tier with limited storage, reducing the risk for new users while encouraging them to upgrade to a paid plan once they see the value.
The second three questions determine how you will deliver that value and get paid.
1. How often and how long do your customers need your solution? This is going to determine whether you want a model that is designed for occasional or one-off transactions as opposed to one which encourages and cultivates a long-term relationship.
Example: Netflix targets customers who want continuous access to entertainment with a subscription models. But event planners use one-off transaction models for services like venue rentals or staging.
2. How long does the value of your product or service last?
Does your customer need to destructively consume your product—like food—in order to experience the value? Is the value a short-lived experience? Does your product wear out or otherwise depreciate or become obsolete? Or is the value evergreen? This will inform whether your business model should be based on transferring ownership or providing access over time.
Example: Blue Apron delivers meal kits that are perishable. Customers eat the ingredients, creating a natural replenishment cycle that supports their subscription model. In contrast, Patagonia builds ultra-durable products with lifetime guarantees, allowing them to charge premium prices for long-lasting value.
3. How much expertise does your customer need to unlock the value? The answers to these questions will determine how your value needs to be delivered. For example, how much post-purchase knowledge management do you need to provide?
Example: IKEA offers a self-assembly model for customers comfortable with basic DIY skills, keeping costs lower by shifting assembly work to the customer. In contrast, professional interior design services provide complete solutions for customers who need expertise and don't want to handle any part of the process themselves.
By asking these six customer-centric questions, you can develop a business model that aligns perfectly with what your customers value most. Whether it’s flexibility, convenience, or long-term accessibility, these insights can form the foundation for creating sustainable differentiation in your market.
Next Steps
Identifying customer preferences is only the first step. The next step is using these insights to design a practical and effective business model.
In my next post, I’ll introduce the five categories of business models and explain how each should be shaped by customer preferences. We’ll explore how to connect the dots between what customers want and how you deliver and monetize your offering. Make sure to subscribe so you don’t miss it!
ClimbWorks
ClimbWorks is now open for new members. We have 15 places left at a 50% lifetime discount for early adopters, before the price goes up.
ClimbWorks is a space for founders to gain traction and build businesses at their own pace while maintaining full control and ownership.
What does it do?
ClimbWorks provides proven tools, clear paths, group coaching, and a supportive community that keeps you moving forward without sacrificing your vision or autonomy.
Who is it for?
ClimbWorks suits bootstrappers, self-funded entrepreneurs, and anyone building a business who wants to define success on their own terms—not someone else's agenda.
Because creating a business that truly works for you shouldn't feel like climbing a mountain alone.
Questions?
Learn more and book a call to explore whether we're a good fit on our landing page here.
We hope you’ll join us.