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Understanding a business model is a fundamental. Put simply, a business model is a definition of how your business expects to generate revenue. The Wikipedia definition is:
“A business model describes the rationale of how an organization creates, delivers, and captures value.”
The concept of value features heavily in any business model. We’ll look at this side of creating a value exchange with users and customers later in this section.
To illustrate business models, let’s look at three prevalent models that we encounter on the web every day.
The significance of understanding the business model is that it tells us what a user’s expectations may be or it will inform what content we need to include on a website. In short, it affects what a website’s proposition is and will lead to research questions around how that information should be presented to users.
Here are three examples of companies which operate under a subscription model. You’ll be familiar with at least one of them.
Here are three examples of companies which operate under a free model and, again, these will be familiar names. Facebook, Twitter, and YouTube are all social media channels of one sort or another. Billions of people around the world use these services without having to pay anything to the companies that provide them.
Finally, here are three examples of companies which operate under the freemium model. The name freemium, of course, comes from a combination of the words free and premium.
Dropbox, Evernote, and LinkedIn provide various types of services, but each offers a free version of their product, while asking users to pay for enhanced features.
In these cases, the business hopes that users will develop a dependency on their product over time and build it into their work routines or lifestyle, such that they will eventually want to pay for the premium service.Back to Top
Rick Monro is UX Director at Fathom. He has extensive experience in user research, interaction design, user-centered design, and design strategy with private and public sector organisations throughout the UK and Ireland.
Data protection regulations affect almost all aspects of digital marketing. Therefore, DMI has produced a short course on GDPR for all of our students. If you wish to learn more about GDPR, you can do so here:
If you are interested in learning about the principles of UX and the tools or techniques that you can use to develop and refine your user's experience, DMI has produced a short course on the subject for all of our students. You can access this content here:
DMI Short Course: UX Essentials
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ABOUT THIS DIGITAL MARKETING MODULE
The UX Research module module will enable you to develop the knowledge and skills to build highly effective user experiences. You will learn how to think like a user in order to understand their priorities and needs, and you will recognize the role of various research and analytics techniques such as tree-testing, card-sorting, user-testing, user-surveys, Google Analytics and specialized tools such as Click-tale.