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Business Model Generation for M2M Applications
From Customer Insights to Business Models – Key Success Factors
Presented by Katharina Liebrand, Swisscom for 3rd ETSI TC M2M Workshop
© ETSI 2012. All rights reserved
The EU-Project BUTLER
BUTLER develops a vision of a
secure, pervasive and
context-aware Internet of
Things
BUTLER’s concept of active,
real-time and progressively
personal context-awareness
is inversely proportional to
the degree of knowledge
required from users
More Information on Butler:
www.iot-butler.eu
Key Question:
“How to make money with IoT?”
I have something, that others need.
I can offer it at a price others are willing to pay.
What is it, that others need?
How can I do it? Can I do it at all?
Find a balance between perceived value and willingness to pay.
Define a model to establish the balance now and evolve in the future.
Starting with a Customer Centric View
to Develop the Value Proposition
Needs
Value Proposition Key Partners Customer
Segments
1KeyActivities
Customer
Relationships
Product
Cost Structure Revenue Streams
Key Resources
Channels
2
What is it others want?
- The Value Proposition
Needs – How do you get access to the customer?
• listen to your customer carefully before and during the design
• pick him up and accompany him to growing with him Needs
Value Proposition
Product - What is „this“ at all?
• Physical, tangible Object
• Service
• Feelings ( Peace of Mind, Safety, Comfort, Belonging )
-> Customer Experience (Customer Journey)
5
Product
The whole is more than the sum of its parts.
Well as long as they help me to save money, I’d
think about it
What the Customers Expect from Us
Need
Usability, Choice
Brand Trust (Positioning)
I’d expect my doctor and my health
insurance to be involved in this
6
What happens to all the data this system
collects?
The results of the customer insights (interviews) strongly influence product
design (customer experience design) and thus the business model.
Usability, ChoiceEthics, Trust
It would be great if it was integrated in my
existing devices!
One technical solution – two very different products
Allianz: Crash Recorder versus Help Box
Value Proposition Crash Recorder:
• We even pay you for it, because we‘ll save
that much on your claims
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Value Proposition Helpbox:
• Your automated
guardian angel, there
for you, when you most
need it
The whole is more than the sum of its parts.
Fleshing out the Business Model looking at the
interactions between the blocks
Value Proposition Key Partners Customer
Segments
1KeyActivities
Customer
Relationships
Cost Structure Revenue Streams
Key Resources
Channels
2
Many individuals need to be reached
Many individual needs need to be reached
Partners
Hardware
Services
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Life Cycle Mgmt
Own Resources &
Activities
VariableFix The mass market consists of
thousands of individuals to be
addressed.
IoT Business is all about
multi-partnering Mass Market needs to be
reached to cover fix costs.
Minimize Cost per Unit
Customer Preferences:•Freedom of Choice
•Evolution
•Use of existing devices
•Simplicity
•Should not cost too much
Key success factors
M2M Business is about Partnering as one company (usually) cannot offer the entire Service alone.
Pe
rce
ive
d S
erv
ice
Va
lue
by C
us
tom
er
Hig
h
Un
it c
ost
ma
rke
t p
rice
Earn
Max accepted Service Price The perceived value of a product is heavily influenced by the way the customer’s individual needs are addressed and less by its technical nature
Key Takeaways:
one company (usually) cannot offer the entire Service alone.
Pe
rce
ive
d S
erv
ice
Va
lue
by C
us
tom
er
Service PriceLow High
Lo
w
Un
it c
ost
Loss
“In IoT the value proposition is not primarily about physical products and not even about services, it‘s mostly about experiences and feelings.”
In order to be competitive the costs need to be managed:
- Openness & Standardization
- Freedom of Choice for Components / Partner
- Design with Options for Evolution
Strategic Learning from Other Industries
One common platform
Flexibility
Interoperability
Evolution
So many different products
Contact Details:
Katharina Liebrand, Swisscom AG
Katja Moser, Swisscom AG
More Information on Butler:
www.iot-butler.eu
12
Thank you!
© ETSI 2012. All rights reserved
