What is the Delta Model?

The Delta Model is a customer-oriented strategic framework that suggests putting customers at the center of everything.

  • The name “Delta” comes from the triangular shape of its 3-component diagram.
    • The Greek letter “Delta” is a triangle.

 

Other Strategic Tools, such as Porter 5 Forces, the VRIO Framework, etc… focus on other different variables:

  • The Competitors.
  • The Threats.
  • Value.
  • The Product.
  • etc.

 

That is why the Delta Model is a good tool to take into account when establishing the Strategy of a certain company.

  • It complements many other methods.

Delta Model Components

The Delta Model is based on 3 Main pillars:

1. Best Product:

  • Offer the best product you can at the best price.

 

2. Total Customer Solutions:

  • Offer the Clients all the solutions they need.

 

3. System Lock-In:

  • Create an attractive Environment to Professionals and other businesses.

 

You will better understand the Delta model with an example:

Delta Model example

 

Apple is one of the companies that best applies the Delta Model.

Why?

 

Let’s see what they do:

 

Best Product

 

We believe that virtually everyone would agree on the high quality of their products.

 

Maybe, you consider their products to be a bit expensive (we do) but:

  • Apple products last.
  • The product design  is unbeatable.
  • The customer service is one of the best (for tech. products).

 

Total Customer Solutions

 

Apple offers the full range of consumer electronics:

  • Phones.
  • Tablets.
  • Smart-watches.
  • Computers.

Their clients don’t have to look for another company if they want a smartwatch, a phone or a tablet.

  • Apple has a solution for any need.

 

System Lock-In

 

This is the reason why Apple succeeded.

When they launched their first iPhone, what really made the difference was the App Store.

 

They created an Environment where outside professionals, could easily  sell their Apps.

  • Suddenly, tons of funny and interesting Apps appeared.

You were bored? No problem: You only had to enter the App Store and download Candy Crush, Angry birds, or any other game.

 

That is what this Method calls “System Lock-In“:

  • To be able to attract outside professionals to your business environment.

We understand that, this method may seem obvious.

 

Who doesn’t want to offer a good product and create an attractive environment?

  • Everybody wants that.

 

Then… Why do we need this method?

Why is Delta Model important?

When designing a strategy, companies often end up focusing exclusively on:

  • Their Market Share.
  • Their Competitors.
  • Short-term profits.
  • etc.

 

Of course, Companies should think about these factors, but they should also not forget that, if they don’t think enough of their customers, they can lose their Business.

 

The Delta Model reminds us the importance of our Clients, the Solutions you can offer, and the Environment we create.

  • It is strongly recommended to use the Delta model as a complement to other Strategic frameworks.

Remember: You can design a successful strategy without using this tool, but if you want to have a long-term relationship with your clients, you better use this model.

 

Now that you have understood why the Delta Model is important, it’s time to explain when you should use it.

When should you use the Delta Model?

Since this is a Customer-oriented method, we encourage to use it in:

  • Companies with end customers.
    • For obvious reasons.
  • Companies with a strong presence of human interactions.
    • The more satisfied everyone is, the better.
  • Sectors in which there is a lot of competition.
    • Focusing on the customer can be a good way to stand out.

 

However, you should consider this Tool whatever your Business: there are always customers involved.

 

Now, let’s see some examples:

Delta Model examples

These are examples of companies that applied the Delta Model (knowingly or not) with success.

 

Let’s begin:

Google - Delta Model example

 

We are aware that we use Google as example a lot… but it is because we consider Google a very interesting company to analyze.

 

What if we analyze the success of Google according to the Delta Model?

 

Best Product

 

Google offers the best Search Engine in the worldFor free.

  • There is no need to compare technical specifications, loading times… It is simple and easy to understand.

 

Of course, today they have many more products, but originally they only focused on the search engine.

 

 

Total Customer Solutions

 

Do we need to explain this point?

Google offers:

  • e-Mail.
  • Cloud-Storage.
  • Calendars.
  • The biggest entertainment platform in the world: YouTube.
  • Even the entire Earth at the palm of your hand (Google Earth).

For free.

 

System Lock-In

 

Google offers professionals many ways to make money or improve their Businesses:

  • AdSense.
  • AdWords.
  • APIs.
  • Cloud solutions.
  • etc.

They have created the perfect Environment for internet-based entrepreneurs.

WordPress - Delta Model example

 

35% of all websites in the world have been created with WordPress.

  • Among them, ours.

 

WordPress is the most famous Content Management System in the world (at least for websites).

  • Why have they been so successful?

 

Best Product

 

WordPress offers an easy way to start a website for everyone, even if you don’t know anything about programming.

  • You can build a Site in minutes very easily.

And it’s free.

Total Customer Solutions

 

WordPress not only offers you an easy way to start your Site.

It also offers:

  • Security.
  • Perfect integration with your Hosting (and SQL databases).
  • Regular updates.
  • The chance to easily change the appearance of your Site.
  • etc.

If you had to do all these things on your own… You would be completely lost.

 

System Lock-In

 

Here is where the magic comes in.

WordPress offers programmers a very attractive Environment to make money:

  • They can create Plug-Ins and Themes that modify the appearance and performance of the Site.

 

These Plug-Ins and Themes can be download and installed in a very simple way.

  • WordPress offers a very intuitive and easy-to-use Plug-In and Theme Search engine.

Nike - Delta Model example

 

Nike is the most popular sportswear brand in the world.

 

Have you ever wondered how they became so popular?

  • How can they maintain their position?

 

Best Product

 

Nike products have always been considered the benchmark in the sportswear market.

  • Their design, materials, etc.

 

Their products are characterized by their high quality and affordable price.

 

Total Customer Solutions

 

If you need something related to sports … whatever it is, Nike has a product for you.

 

System Lock-In

 

Nike has targeted:

  • Personal trainers.
  • New training methods.
  • Important famous athletes and sport-Influencers.

Creating a training-Environment, where Nike products help coaches invent and teach new training methods.

 

* This System Lock-In Environment is not as perfect as the one we saw in the Apple, Google or WordPress examples, of course.

IKEA - Delta Model example

 

IKEA: That “affordable” chain where you spend $300 every time you go…

 

How did IKEA do it?

How did they create such a large and successful company … selling furniture?

 

Best Product

 

This may seem a bit controversial because IKEA is known for its low prices, not the quality of its furniture.

But quality is relative to the price you pay.

 

For every piece of furniture that IKEA sells, you can find a dozen options of much higher quality … and price.

 

For the price they sell, their quality is unbeatable.

  • Furniture has always been relatively expensive.

 

Total Customer Solutions

 

At IKEA, you just … have everything: mugs, plants, tableware, carpets, beds…. Everything.

  • You even have a Restaurant, a grocery store… and a place to leave your children while you spend all your savings.

 

System Lock-In

 

IKEA has created a “curious” System Lock-In:

  • Their furniture is so widespread, popular and affordable that many interior designers use it in their proposals.
    • Of course, for the average customer.

 

Lot of people are used to the IKEA style, and its prices.

So, even if interior designers want to work with better more expensive furniture, their clients request IKEA.

  • Basically, due to its price/quality.

Summarizing

The Delta Model is a customer-oriented strategic framework that puts customers at the center of everything.

  • It is a good tool to take into account when establishing a Business Strategy since it complements many other methods.

 

It is based on 3 Main pillars:

  1. Best Product.
  2. Total Customer Solutions.
  3. System Lock-In.

 

The Delta Model reminds us the importance of our Clients, the Solutions you can offer, and the Environment we create.

 

We encourage to use this Model in:

  • Companies with end customers.
  • Companies with a strong presence of human interactions.
  • Sectors in which there is a lot of competition.

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