There is no success without disruption, particularly when it comes to the digitization of the world around us. In essence, go digital or go home. ~ John Chambers, former CEO of Cisco
There are three ways to unlock your growth for business that are not just delegated to big companies. Winners focus on making their businesses different through technology, not on the technologies themselves. They think different. You can differentiate your company through three broad categories of digital capability:
- Differentiator #1 – Build an Amazing Customer Experience
- Differentiator #2 – Automate Repeatable Operations
- Differentiator #3 – Reinvent Your Business Model
Let’s dive into the differentiators.
DIFFERENTIATOR #1 – BUILD AN AMAZING CUSTOMER EXPERIENCE
If we compare the total return to shareholders of companies with above- and below-average customer satisfaction scores, the leaders achieve four times the growth in value of the laggards over a ten-year period [McKinsey]
The first step in building a great customer experience is to truly understand your customers’ journeys. However, the primary goal is to thoroughly rethink the way the journey works, instead of simply fixing inefficiencies along the way.
The customer experience isn’t just how friendly the staff is or how great a product is. Customer experience in the lens of digital is about making a positive interaction in every single touchpoint a customer has.
Consider how the line is blurred between products, services and even physical space for many companies in various industries. A bank is a great example. Here are questions to ask when thinking about improving a customer experience.
- Is it easy to check my balances?
- Is it easy to pay friends and services from my phone?
- Can I access my bank account + my car payment loan on one login?
- Can I chat with customer service on chat?
- Is the wait less than 3 minutes to talk to someone from customer service on chat?
- Is customer service knowledgeable?
- Can my bank provide my with financial education?
- What does the physical space of my bank look like? Is it welcoming?
- Was the on-boarding of my mobile app sign-up informative and easy?
Customer experience in digital transformation is all about the hyper-focus on the customer, not the technology. The technology supports the customer and should never be driven by shiny new technology tools
DIFFERENTIATOR #2 – AUTOMATE REPEATABLE OPERATIONS
On average, bold, at-scale responses to digital disruption pay off twice as much as semi-bold reactions and three times as much as medium reactions. [source]
I’m going to sound like an infomercial or a cold email you receive 5 times a day, but what if you could automate parts of your business so you can focus on growth? Automation is often talked about but feels out of reach for many mid-market companies.
Industry after industry, companies with better operations create a competitive advantage through superior productivity, efficiency, and agility. The operational advantage is difficult to copy because it comes from processes, skills, and information that operate together like a well-tuned machine.
Instead of focusing on automation, we focus on the following framework: How can we stop making decisions based on past results, and instead be proactive with predictive data analytics and monitoring.
In the case of our security guard client, we knew there was an opportunity for operations to be much more efficient across the entire organization. We sought out to solve their inefficiency problem by looking at how process automation can be a part of their digital transformation.
Here’s the one key theme we stated when framing the problem: How can we improve operations centrally and on each client-side through the use of digital?
This new solution was so well-received and differentiated them from their competitors that it helped them break into the security operations of a billion dollar company.
Here’s how we did it:
- We centralized operations to one single, real-time dashboard located in the headquarters.
- We automated the compliance reports that were once done manually.
- We made the security guard experience seamless. The technology was invisible, and the positive results to security guard behavior were immediate.
- We made it easier to deploy security guards.
DIFFERENTIATOR #3 – REINVENT YOUR BUSINESS MODEL
Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening. ~ Tom Goodwin
Transformative business models, such as Uber, are rarely just a technology story. Digital technology is, of course, core to the success, but it is wrapped in many other elements that together make a great business model: supply-side control, economic model, customer experience, and efficiency in execution.
Business model reinvention sometimes involves radically shifting what you sell, how you sell it, or how you make money. The shelf life of existing business models is becoming shorter, questioning the very notion of lasting competitive advantage.
Reinvention may involve reimagining the nature of competition in your industry or reconfiguring your value chain to deliver at a substantial efficiency advantage against your competitors. The key is that data is at the center of the re-invention.
We frame our problem like this: How can we collect and use data to re-invent our business models?
Without data, you are at best, guessing.
There are plenty of ways to look at business models. Here are a five ways to reinvent your business model along with relevant examples.
- Reinvent the industry – The same way Uber re-invented the taxi Industry and AirBnB re-invented the hotel industry.
- Substitute products for services – Rent the Runway is a great example of a company who substituted products for services. Instead of buying a high-end designer made dress, you can now rent them for a few days for 10% of the cost. They also offer subscription plans for $159 / month that allows you to get access to unlimited designer brands and have up to 4 at a single time.
- Create new products and new digital businesses. Brandless.com is an all digital eCommerce store that allows you to buy high-quality products at a fraction of the cost of major brand names. In fact, everything is $3. Instead of paying $5 for Aunt Jemima Syrup, you can get the same quality syrup for you guessed it, $3.
- Reconfigure value delivery models – Recombine products, services, and data to change the way a firm plays in the value chain. Warby Parker has redefined the distribution model of prescription eyewear, that is normally dominated by Luxottica. Warby Parker launched their brand by sending customers multiple pairs of eyeglasses and letting them try it on in the comfort of their own home.
- Rethink value propositions – Use new digital capabilities to target unmet needs for existing or new customers. A good example of this is Japanese Insurer, who used data to understand new services. They now offer non-traditional services such as on-demand insurance for skiing, golfing, and other travel-related activities that previously were needs but were not met.
Whatever your industry, you need to be on the forefront of challenging your current business model. Otherwise, someone else will.
In summary, Digital disruption and innovation is not just for the biggest technology companies.
The technology to disrupt how your company operates is more accessible than ever. The question isn’t what can this technology do for you, but how could technology help you build better experiences for your customers, optimize your operations, and lastly, introduce new business models?
Here are some questions that we consider when working with mid-market companies.
- How would a superior customer service differentiate you from your customers?
- How could a better customer experience drive revenue?
- How can technology enable you to drive a better experience?
Automation of key business process
- How could automating key business processes help drive a better customer experience?
- How could automation create a competitive advantage?
- How much money could you save by automating key processes?
Business model innovation
- What business models can emerge that could drive additional revenue?
- What services could you create based on your current competitive advantage in the marketplace
- What partnerships could you utilize to compliment your core service offerings?
If you would like more insights into this answer for your business, please feel free to contact us at email@example.com
- Digital Transformation