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Cost reduction Accessibility
Helping customers reduce costs is an important Making products and services available to custom-
way to create value. Salesforce.com, for example, ers who previously lacked access to them is another
sells a hosted Customer Relationship management way to create value. This can result from business
(CRM) application. This relieves buyers from the model innovation, new technologies, or a combina-
expense and trouble of having to buy, install, and tion of both. NetJets, for instance, popularized the
manage CRM software themselves. concept of fractional private jet ownership. Using an
innovative business model, NetJets oΩers individu-
Risk reduction als and corporations access to private jets, a service
Customers value reducing the risks they incur previously unaΩordable to most customers. Mutual
when purchasing products or services. For a used funds provide another example of value creation
car buyer, a one-year service guarantee reduces through increased accessibility. This innovative
the risk of post-purchase breakdowns and repairs. financial product made it possible even for those
A service-level guarantee partially reduces the with modest wealth to build diversified investment
risk undertaken by a purchaser of outsourced IT portfolios.
services.
Convenience/usability
Making things more convenient or easier to use
can create substantial value. With iPod and iTunes,
Apple oΩered customers unprecedented conve-
nience searching, buying, downloading, and listen-
ing to digital music. It now dominates the market.

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