When it comes to running a successful business, determining how and when you interact with your customers is one of the most critical components. Determining the best way to connect with them comes down to figuring out the most effective communication channels. What is the best way to speak to your customers and enable them to get in touch with you when needed? The answer to these questions will vary greatly depending on what you offer and what your audience is looking for.
What’s the one model many companies found valuable for driving effective customer engagement? The platform business model. But what is the platform business model, and should you apply it to your business? Let’s find out.
What is a platform business model?
The consulting firm Deloitte defines a platform business model as one that “focuses on helping to facilitate interactions across a large number of participants.” There’s a lot of room for variation within that bigger definition. The platform could facilitate sales. They could allow a user to form social connections. Or the platform could facilitate shared learning or collaboration.
From a business perspective, adopting a platform model requires digital savviness as well as a greater understanding of your customers and their online behavior. The platform business model is digitally focused, whereas older models focus on more traditional, analog methods. To take on a platform model, you’ll want to have proficiency in providing IT solutions – or know the right team to put in place to help make that happen. That’s not to say a platform model can’t incorporate more traditional methods but generally speaking, it relies heavily on online interaction.
What makes a platform business model effective is how well it can satisfy real customer needs. The customer has a problem, and your product (ideally) offers them a solution. Look at the platform you develop as a conduit for your solution. Whether you’re encouraging them to buy directly from an app or leave feedback, your platform can help you easily connect with your customers. There are so many ways to engage them with a business platform model.
With the right platform in place, you can facilitate dialogue with your customers, and you can also help them learn and grow while providing them with an easier way to buy from you. It’s a win-win.
Platform business models in action
To better understand how platform business models work, it’s helpful to look at some examples and see how they function. Highlighted below are three companies that took innovative concepts and turned them into an engaging platform model best suited for their customers.
CNETT’s platform is a subscription model that offers personal coaching and business innovation guidance to support the development of small businesses in the Caribbean. The organization has a simple but difficult mission: integrate people and planet. That’s why they tap into like-minded organizations like The Humanity Teams and MindValley to help them fulfill their objective. They offer a global marketplace for connection and collaboration, elevating a community marketing platform that operates at the nexus of businesses, communities, and people – all working together to maximize sales and develop brand loyalty for small businesses. CNETT offers services like personal promotion support, business development assistance, networking, and training.
CNETT is the perfect example of a company that has a clearly defined as sustainable innovation practice of sharing value. They match buyers and sellers optimizing utilization and verify trust on their platform. They’re not just achieving their own goal – they’re also putting people and companies in touch with the right platform to help them achieve their own dreams as well.
Operating in an entirely different field, Warby Parker is one of the most recognizable names in eyewear. Just hearing the brand name brings to mind stylish, elegant frames people would likely wear even if they didn’t have eyesight issues. How have they established that kind of market share? Obviously, they have a product people like, but they also offer a one-of-a-kind customer experience through their mobile app. Their virtual try-on feature taps into groundbreaking technology to show their customers exactly how they’ll look wearing a pair of their glasses. It’s an interactive platform that brings the customer experience to a higher level.
Warby Parker’s platform enables them to create the (accurate) perception that their company is on the cutting edge for improving customer engagement. Shopping for eyewear may have seemed like a chore in the past because you couldn’t try on a pair of glasses without traveling to an actual store. Now, Warby Parker has pulled that practice and their customers into the 21st century with the unique capability of their ground-breaking platform business model.
Hearing loss can be a difficult challenge for anyone facing it. But Eargo offers hope for individuals who experience hearing loss. They do this by offering more than just a hearing aid –though they do provide an amazing product. They also have a mobile app that connects their customers with board-certified hearing loss professionals who can help them manage and cope with their hearing loss.
Eargo’s product is a hearing aid, but their platform allows them to take the next step with their customers. They envelop them with support, helping them tackle each challenge they face. That’s the kind of connection that builds a lifelong customer. They establish support well past the point of sale.
So how does Eargo develop and nurture this platform-customer relationship? Through the application of efficient, multi-channel customer acquisition. They identify four primary lead drivers (online, TV, public relations, and print media) and use them to collect leads. They then convert these leads using different tactics depending on the type of media. Finally, they separate customer types by payment format – whether that’s cash or insurance payments.
Eargo doesn’t just address a customer’s pain point. They also figure out the best way to connect with those customers to get those needs satisfied with a very personal platform business model.
What do these platform business models have in common?
The examples outlined above are all innovative, successful businesses that matches buyers and sellers optimizing utilization tap into the platform business model to more effectively engage their customers. But there are four reasons why these distinct platform model businesses work:
- They demonstrate value proposition for multiple partners and through collaboration efforts they create value for both the end customer and the company itself.
- Their leadership styles are all versatile and adaptive, flexible in the face of an ever-changing digital landscape.
- They all have capabilities needed to adjust their resources based on the shifting requirements in their respective fields.
- They offer a seamless experience through their products, services and extensions that interoperate and connect with the customer.
The bottom line is that each of these companies was able to let their great ideas flourish and then execute those ideas through the use of their platform. Establishing a platform for the sake of doing it wasn’t enough – they needed a game-changing idea to justify developing that platform. By allowing the creativity to flourish within their organization, they developed winning ideas that were then buoyed by their convenient-for-the-customer platforms.
Platform business models help organizations empower their audience
When you develop your brand, you’re doing it to provide some sort of value to your cultivated audience. You can deliver that value in any number of ways. You can certainly spoon-feed it to them, holding their hand throughout their customer journey. Or you can give them the tools they need to uncover and get the most out of that value themselves. One of the best ways to do that is by developing a winning platform they can engage with.
What makes platform business models unique is their ability to help businesses address their customers’ pain points in a collaborative, engaging way. Through the use of their platform, they empower their customers, putting them in the driver’s seat for solving their own problems. Whether they’re solving that problem by purchasing a product, connecting with a community, or receiving vital information, it’s the platform that helps them achieve that. Your platform can bring your organization’s great idea to life and then put it in the hands of the people who need it.
Learn how to integrate your capabilities and compete using a superior business model through collaborations and customer engagement efforts. Ask us how!