25 Cost reduction Helping customers reduce costs is an important way to create value. Salesforce.com, for example, sells a hosted Customer Relationship management (CRM) application. This relieves buyers from the expense and trouble of having to buy, install, and manage CRM software themselves. Risk reduction Customers value reducing the risks they incur when purchasing products or services. For a used car buyer, a one-year service guarantee reduces the risk of post-purchase breakdowns and repairs. A service-level guarantee partially reduces the risk undertaken by a purchaser of outsourced IT services. Accessibility Making products and services available to custom- ers who previously lacked access to them is another way to create value. This can result from business model innovation, new technologies, or a combina- tion of both. NetJets, for instance, popularized the concept of fractional private jet ownership. Using an innovative business model, NetJets oΩers individu- als and corporations access to private jets, a service previously unaΩordable to most customers. Mutual funds provide another example of value creation through increased accessibility. This innovative financial product made it possible even for those with modest wealth to build diversified investment portfolios. 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. bmgen_final.indd 25 6/15/10 5:32 PM