Multiple businesses are seeing data and digital as one of their core strategic pillars
Businesses have always worked on intuition. The decision of what will work was traditionally taken by professionals who could constantly narrow down the possibilities of failures either by failing or by learning. This approach worked for companies' pre-1991. But with the advent of digital technologies, the whole business ecosystem transitioned. David Rogers in his book “The Digital Transformation Playbook” suggests the skill required to operate businesses in the digital era has transformed especially when the result concerns a company’s customer, competition, data, innovation and value. Let’s explore how strategic themes now follow a completely new status quo.
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Evolving B2C Relationship
Companies have historically seen customers as solely the buyer of their goods and have tried to reach them to buy through ways that appeal to masses. But as business ecosystem moves towards digital, customers not only make their personal purchase decision, but also influence multiple others. They form dynamic networks that interact with and shape brands. Hence identification and nurturing of customer networks becomes essential. Firstly, companies need to go beyond their existing marketing funnels by creating channels to encapsulate customer loyalty and evangelism.
Secondly, customer’s path to purchase, i.e. customer journey, needs to be conceived to survive this age of hyper-personalization that a buyer demands as their interactions become omnichannel. And lastly, firms need to build relationships with customer networks by helping them engage and collaborate with their brand.
Changing B2B Dynamics
In the past, only similar companies were seen as competition. But in the digital age, competition is more between dissimilar companies across industries. Companies are actually fighting for a customer’s time and preference making a restaurant and a theatre rivals. The digital revolution is, hence, redefining firm to firm relationships, leading to the rise of platforms and marketplaces. The new relationship matrix is more a mix of competition and cooperation. BMW competes directly with Audi and indirectly with Uber, a platform.
Platforms have always existed; a good example would be shopping malls, but due to digital technologies like web, APIs, SDKs, cloud & mobile computing, platforms are gaining relevance by getting added to traditional business’s value chains to eventually gain permanent positions.
Data, earlier seen as a metric to measure and plan processes, has become the most important strategic asset for businesses directly impacting value creation and innovation. Since data will eventually become a tool to make better-informed decisions, businesses will have to adopt multiple technological solutions to structure, manage and store this big data. This will be instrumental in generating insights that can be clubbed basis similarities; this will help understand patterns that can be used to attach a context. Multiple businesses are putting data as one of their operating pillars to increasingly capture this context and create stories to sell and improve.
Traditionally, a company could say that they have innovated only post a market endorsement. The feedback came late in the process and testing of ideas was limited. Today, innovation is approached through rapid experimentation and continued learning. Build-measure-learn feedback loop cycles are being viewed as the quickest way to identify products customers actually want. Such changes have been adopted not only by businesses looking to improve their existing services but also by corporations looking to build new products through ways including A/B testing and MVPs. The role of visualizing failure has drastically changed from actually failing to exploring the path to real innovation.
Shift in Value Proposition
A value proposition is the reason why customers turn to one company over another. To improve, firms focus either on translating the present value to different set of customers or differentiate the value to the existing clientele. But in the digital era, firms have to address both simultaneously. A good example is when a newspaper company pivots its mission, distribution channels and geography at the same time. Multiple platforms practice value creation as an ongoing process, which helps pave the path for the next set of relevant products. The idea is to promote customers to the core of the value proposal enabling businesses ecosystems to leverage network effects.
Digital transformation has become pertinent for companies to stay afloat. A shift to a culture of data-based decision making will strengthen businesses like never before.
-Pranav Jain is a digital business sales and innovation strategist with a key eye on business transformation. The views expressed are personal