We're taking a deep dive into Santa's business model.
Who hasn't come across the famous Business Model Canvas yet? We'll use it as a basis to thoroughly analyze Santa's business model.
Millions of customers and followers all over the world, an enviable customer loyalty, and only one day of work per year: Santa's business model looks perfect at first glance. Will it still look perfect at the end of our analysis, though? Let's hope so.
- Unique selling point ‒ he keeps his word
When it comes to Santa, the goal and value proposition are clear: every child's dream shall come true, and all customers shall have an unforgettable Christmas. How is this possible? With a unique gift delivery service.
- Customer segment ‒ a huge market
Santa Claus is not a niche player. He serves everyone, regardless of the demographics. One might argue, though, that he can't be picky about his customers.
- Sales ‒ the business is booming
Who doesn't like to spend Christmas with their loved ones? And of course, gifts are a must here. The National Retail Federation (NRF) expects Christmas sales of more than $843.4 billion. An 11.5-percent increase compared to last year.
Besides that, Santa receives some of our most valuable data, because we happily entrust him with our greatest wishes.
- Channels ‒ he uses them all
The traditional means of transport via reindeer express has become slightly outdated. In these modern times, Santa prefers to relax in the Cloud and has the gifts delivered by various home delivery services.
Not only does he reach us physically, but also virtually. From year to year, people are purchasing more and more gifts online using their smart phones. And the pandemic largely contributed to this. According to a bitkom survey (Available in German only), 86 percent of all persons interviewed do their Christmas shopping online.
- Customer relationships ‒ a huge community full of nostalgia
In terms of customer relationships, Santa is a true champion. Who doesn't just love this likeable, hefty, white-bearded old man?
And on his one and only workday, he's quite often the talk of the town, be it at home or in the office. Year after year, he unites people, creates communities around him and brings back nostalgic memories of past Christmases. - Key activities ‒ storytelling and data mining
Saint Nick is a true storyteller who takes his time to understand every single one of his customers and find out their deepest wishes. Good customer relationships are his utmost concern and he knows very well how to use this personal information to make his customers happy. - Key resources ‒ a brand you gotta love
Santa is a brand you just gotta love. Whatever shows his picture is automatically uprated. He knows exactly how he can move his customers emotionally.
His platforms, too, are essential. As already mentioned above, he unites people and creates communities among them. The collected customer data help him year after year to surprise and please his customers.
- Key partners ‒ an active community
Just like Facebook, Santa doesn't create his stories himself. He fully relies on his fan base. Besides his elves and reindeer, his customers are an indispensable factor when it comes to the creation of added value. They decorate their homes, tell stories and assist him in purchasing and wrapping gifts. - Cost structure ‒ there's a price to everything
Just as Uber don't have any cars of their own and Airbnb don't have any rooms of their own, Saint Nick doesn't take care of all the gift wrapping himself. This would be way too much work and way too expensive. By involving his customers, he creates a scalable and highly cost-effective business model.
What can we learn from him?
Santa isn't just an inspiring storyteller, he's also everyone's friend. He serves a mass market and continuously expands his fan base, which in turn creates added value. He purposefully uses the collected data, creating a brand that everyone knows and loves.
Source: https://designabetterbusiness.com/2017/12/21/why-the-business-model-of-santa-claus-is-so-successful/
