Digital transformation has opened up a range of possibilities in the business sector, enabling businesses to meet the demands of customers and the market. If you're thinking of starting a business, Hispanos Emprendedores will tell you about the most widely used digital business models.
What is a business model?
It's the way a company creates, delivers, and captures value for the customer. In other words, it's a tool that allows you to define what you're going to offer the market , how you're going to do it, who you're going to sell to, and how you're going to generate revenue.
It goes beyond simply making money; it also identifies your customers and explains how to reach them. It outlines what you need to do to deliver your value proposition and what your cost structure will be. In short, it's a complete business overview.
It is defined by three elements, profitability, scalability (which conquers the market) and repeatability (which can be replicated). Determining your business model will help you to know how it is made, how it can be modified, polished or molded.
Meanwhile, digital business models are those that apply to companies that operate online and take advantage of technology to improve their services. To give value propositions and monetize.
Most used digital business models
With the changes in digital business we have seen the development of some sectors such as the media. As well as airlines, tourism or financial intermediaries, but which digital business models are the most used?
Here are some of the business models that stand out:
1-Enterprise
It is based on the sale of services or software to other businesses under a single use license. Contracts generally have fixed and temporary terms of use. They are renewed from time to time. An example of this type is KPMG and other large consultancies.
2-Subscription
It's one of the models that has developed the most following the rise of the internet in the new millennium. It involves selling a product or service to customers through a recurring payment . If the payment isn't made, access is lost. These services focus on customers directly, rather than other companies like entertainment services such as Netflix, HBO, and Amazon Prime.
You have a fixed customer base for a period of time and a continuous stream of predictable income because they are paid in advance. But to stay on top they must offer original content which makes them spend a lot of money to produce it.
3-SaaS (Software as a Service)
It's a variation of the subscription model, more commonly associated with businesses or startups. Customers also pay a fee for the service. They don't pay for the software itself, but rather for access . The provider is responsible for maintaining its proper functioning. Clear examples include Zoom, Shopify, Asana, Google Docs, and Microsoft Office 365, among others.
4- Transactional
These are the platforms that generate revenue by charging fees for the use of their platform. These models are typically used by financial or banking companies such as PayPal, Skrill, or Stripe, which charge a fee for each transaction.
5-E-commerce
It is the one that is dedicated to the sale of products online and that is increasing. Every day more successful online stores appear, a trend that the big brands have joined.
It's easy to implement and you don't need a large investment to get started. Use the website or social media to make transactions and reach the consumer. It is key for entrepreneurs. Amazon, Dell, eBay, and ThinkGeek are successful examples of this model.
6-Freemium
It offers a free product or service to hook you into subscribing to its paid service by providing additional benefits. In other words, it's a double offer, but it reserves the good content for itself, calling it Premium. This attracts a large number of users to try the free service.
It shows them through marketing strategies the benefits they can obtain if they hire the paid one. Google Drive, Candy Crush, Pokemon Go, and Spotify are Freemium models.
7-Marketplace
They are distinguished by putting in contact the parties (client and bidder) who will participate in the transaction of products or services. This contact occurs without an intermediary. You must be very attentive to the demands of the market. For example LinkedIn, Uber, Airbnb, Ebay, etc. Some are funded by advertising and others charge a commission for each transaction.
8-Open source
They distribute free software to create large communities composed mainly of specialists such as programmers and collaborating developers. They are seen a lot on mobile devices with free operating systems, cloud platforms, web servers, and educational platforms.
To make it profitable, they offer products or services associated with said software and even by subscription, like Red Hat.
Also famous are Talend, Hortonworks, DataStax, Cloudera, Elastic, GitHub, Databricks, and SugarCRM.
9-Online services
It offers professional services through the internet. Coach, consultant, therapist, instructor are those who are called to use this model. They must work on their personal brand, create a website and implement strategies to attract customers. A case of success is that of the celebrity and business coach Karen Hoyos with her company Dios Sabe Vender.
10- Dropshipping
It's a model that allows entrepreneurs to sell products without needing to hold inventory. Through this model, they offer third-party products on their own platform, similar to an e-commerce site.
The difference is that that third party will be the one that sends the merchandise directly to the customer. It is a kind of middle man that focuses only on marketing. AliExpress is based on this model.
