The Business Model Canvas (BMC) is an innovative tool that has changed how businesses design and strategize their business models. Many users often overlook the building block of channels. Understanding channels is crucial for any business that wants to effectively reach customers and deliver its value proposition. This is why we decided to write a deep dive into the channels Business Model Canvas buildingblock.

What are channels?

Channels refer to the various means through which a business communicates with and delivers its value proposition to its customer segments. They are essential for reaching customers, providing products or services, and building lasting relationships. Channels play a crucial role in how customers perceive a brand and its offerings.

Why is it important to pay extra attention to the channels Business Model Canvas building block?

By focusing on making the right decissions in the channels building block, businesses can enhance customer engagement and capitalize on new opportunities, ultimately leading to sustained success. Here are some important topics to cover:

1. Effective customer reach & marketing optimization

Channels are the pathways through which a business connects with its customers. Choosing the right channels ensures that the target audience can easily access products or services. Understanding which channels work best for reaching specific customer segments allows businesses to tailor their marketing strategies. By focusing on effective channels, companies can allocate resources more efficiently, leading to better returns on investment. If businesses neglect this building block, they risk alienating potential customers who may prefer different methods of engagement.

2. Enhancing customer experience & strengthen brand identity

The right channels contribute to a seamless customer experience. When customers can interact with a brand through their preferred channels, it creates a more satisfying and efficient purchasing process. This positive experience can lead to increased customer loyalty and repeat business. Additionally, consistent messaging across various channels reinforces brand identity. When businesses invest in their channels, they can ensure that customers receive a cohesive experience, which helps to establish trust and recognition in the market.

3. Switch in time: Deliver the proposition on the right channel for each customer

Consumer behavior is constantly changing, and preferences can shift quickly across different customer segments. By closely monitoring the channels Business Model Canvas building block, businesses can adapt their strategies to meet the evolving needs of each segment. This adaptability is essential for delivering the value proposition in a way that resonates with customers.

Moreover, the emergence of new social channels presents additional opportunities for engagement and connection. Companies that successfully leverage these platforms can become “channel kings,” dominating their chosen channels and establishing a strong presence in the market. Staying attuned to these changes ensures that businesses remain relevant and competitive in a dynamic market landscape.

Types of channels Business Model Canvas

Channels can be classified into different types based on their nature and function. There are: communication-, sales-, and distribution channels. A channel can fulfill several of these roles. Furthermore channels can be categorized as direct or indirect, as well as online or offline. Here are some examples.

1. Direct channels – Offline

Direct channels involve direct communication and sales to customers without intermediaries. The communications are offline. Examples include:

• Physical stores: Customers visit a store in person to purchase products or services. This allows for face-to-face interactions and personalized service.
• Company-owned kiosks: Temporary or permanent small booths where customers can directly buy products. These are usually located in high-traffic areas like malls or events.
• Pop-up shops: Temporary retail spaces that appear for a short time. These shops create a sense of urgency and excitement, attracting customers to make immediate purchases.
• Direct mail: Sending promotional materials or offers directly to customers through physical mail. This helps to build brand awareness and create a personal connection.
• Telemarketing: Calling customers directly to promote products or services. This allows businesses to explain their offerings in detail and address any questions.
• Door-to-door sales: Sales representatives visit customers at their homes to present and sell products. This allows for personal interaction and demonstrations.
• Workshops and seminars: Offering in-person educational sessions or demonstrations that showcase products or services, giving customers the opportunity to engage directly.

2. Direct channels – Online

Direct online channels involve direct online communication and sales to customers. Examples include:

• E-commerce website: A company’s own website where customers can browse products, make purchases, and manage their accounts directly online.
• Social media sales: Selling products through social media platforms by posting product links, running ads, or using integrated shopping features like Instagram Shopping.
• Email marketing: Sending personalized promotional emails directly to customers, including product recommendations, discounts, and new arrivals with links to purchase online.
• Mobile apps: Offering a dedicated mobile app where customers can easily browse and buy products directly from their smartphones.
• Live chat sales: Engaging with customers via live chat on a company’s website or app to answer questions and guide them through the purchasing process.
• Webinars: Hosting live or recorded online seminars where products or services are demonstrated, allowing customers to make purchases directly through links provided during the event.

3. Indirect channels – Offline

Indirect offline channels use third-party intermediaries to distribute products or services to customers. Examples include:

• Retailers: Third-party stores that sell a company’s products alongside other brands, offering customers the convenience of purchasing from a variety of options.
• Distributors: Companies that buy products in bulk and sell them to retailers or other intermediaries, helping to expand the reach of products to different markets.
• Wholesalers: Intermediaries that purchase products in large quantities from manufacturers and sell them to retailers at a lower price, facilitating the distribution process.
• Dealers: Specialized businesses that sell products on behalf of manufacturers, often focused on a specific industry like automobiles or electronics.
• Franchisees: Independent business owners who operate under a larger brand’s name, selling the brand’s products or services while following the company’s guidelines.

4. Indirect channels – Online

Indirect online channels rely on third-party intermediaries to market and distribute products or services to customers through digital platforms. Examples include:

• Online marketplaces: Platforms like Amazon or eBay where various sellers list their products, allowing customers to browse and purchase from multiple brands in one place.
• Affiliate programs: Websites or influencers that promote products from other companies and earn a commission on sales generated through their referral links.
• Social media influencers: Individuals with a large online following who promote products to their audience, directing potential customers to purchase through external links.
• Online advertising networks: Companies that place ads for products on various websites, driving traffic to the seller’s site without directly handling sales themselves.
• E-commerce aggregators: Websites that compile products from multiple retailers, allowing customers to compare prices and features before making a purchase.
• Comparison shopping sites: Platforms that allow customers to compare prices and features from various online retailers, helping them find the best deal before purchasing.
• Subscription box services: Companies that curate and distribute products from multiple brands into a single subscription box, delivering them to customers while handling logistics and marketing.
• Drop shipping services: E-commerce businesses that sell products from suppliers without holding inventory, relying on suppliers to fulfill orders directly to customers.
• Product review websites: Sites that provide reviews and recommendations for various products, linking customers to retailers where they can purchase those items.

Choose the right channel for the stage of the customer journey

When working on channels Business Model Canvas building block, it is important to understand the customer journey and take it as a starting point. Choosing the right channel for each stage of the customer journey is essential for effective communication and sales. The customer journey typically includes five main stages: Awareness, Consideration, Decision, Retention & Advocacy. By aligning the right channel with each stage, businesses can effectively guide customers through their journey, improving their chances of conversion and loyalty.

1. Awareness

At this stage, customers discover your brand or product. Effective channels include social media ads and online articles.

For example, a customer might see a Facebook ad for a new fitness app, sparking their interest.

2. Consideration

Here, customers research and compare options. Use channels like email marketing and product review websites.

For instance, the customer may receive an email with detailed features of the fitness app and read reviews on a tech website to learn more.

3. Decision

In this stage, customers are ready to make a purchase.

Direct online channels, such as your e-commerce website, are crucial. The customer can easily buy the fitness app directly from the app store or the company’s website.

4. Retention

After the purchase, it’s important to keep customers engaged. Use channels like newsletters and social media to provide updates, tips, and special offers.

For example, sending a monthly newsletter with workout tips and app updates can encourage the customer to continue using the app.

5. Advocacy

At this stage, satisfied customers become advocates for your brand. Encourage them to share their positive experiences through channels like social media and online reviews.

For instance, a happy user might post about their fitness journey using the app, inspiring others to try it as well.

How are channels connected with other Business Model Canvas components?

Understanding how the channels Business Model Canvas buildingblock relate to others is essential for a cohesive business strategy. Here are examples of how channels connect with other building blocks:

1. Value propositions & channels Business Model Canvas

The channels Business Model Canvas buildingblock is intricately connected with the value propositions block. The channels a company chooses not only influence how effectively it delivers its value proposition but can also be integral to the proposition itself. For instance, a luxury brand may opt for exclusive distribution channels to reinforce its premium positioning, while a tech startup might use direct online channels to highlight innovation and accessibility.

2. Customer relationships & channels Business Model Canvas

The decissions made in the channels Business Model Canvas buildingblock are vital in shaping customer relationships. The way a company interacts through its chosen channels significantly influences these connections. For example, personalized email communication fosters loyalty and deeper engagement, while social media support creates an informal, interactive relationship that encourages real-time feedback. By aligning the right channels with the desired type of customer relationship—be it personal, automated, or self-service—businesses can strengthen connections, enhance satisfaction, and build long-term loyalty.

3. Customer segments & channels Business Model Canvas

In the Business Model Canvas, different customer segments require tailored channels to effectively reach and engage them. For instance, younger consumers may prefer digital channels like social media and mobile apps for instant access, while older customers might favor traditional channels like direct mail or in-store experiences.

By customizing channels to suit the preferences and behaviors of each segment, businesses can enhance communication and improve customer satisfaction. This targeted approach ensures that the right message reaches the right audience, ultimately driving engagement and increasing the likelihood of conversion.

4. Cost structure + revenue streams vs channels Business Model Canvas

The channels Business Model Canvas building block is intricately connected with cost management and revenue generation. Companies that excel on specific channels or use smart, efficient distribution methods—such as growth hacks—can achieve significantly better financial outcomes. For instance, a business with its own e-commerce site retains more profit and incurs lower costs than one relying on third-party retailers.

Discover our other deep dives!

We have created several deep dives on different building blocks of the Business Model Canvas. Explore them here:

• Customer segments
• Value propositions
• Customer relationships
• Channels
• Revenue streams
• Key resources
• Key activities
• Key partners
• Cost structure

Are you excited about this channels Business Model Canvas deep dive?

We hope that our channels Business Model Canvas deep dive has provided you with valuable insights. If you found this article helpful, please share it with your friends, colleagues, and others who could benefit from it!

You’re lucky! Limited-offer: Subscribe to Business Model Hacking and get the digital version of the book and the cards for free.