I am sure you are familiar with the word transformation. You are also probably hearing so much about the Digital world and how it affects our everyday lives if not experiencing this firsthand. Unless your living under a rock, it does not take much to see, things are getting faster and more efficient. Are you noticing People’s technology habits changing? This is Digital Transformation in action. Slowly the human race is evolving. Apps like Spritz is set to vastly improve the most simple of human actions, reading by making us all read 2.5 times faster. Check out Spritz if you don’t believe me.
So, with all these advances in technology and social interactions and people one must start to really think deeply about what this means for business. Truth be told the same advances we are seeing in human evolution is happening in business evolution. Well first of all 3 of the top 5 largest companies on the S&P 500 are tech companies and the I.T. Industry makes up 15% of the same set of firms. Even more shockingly, a lot of these firms did not exist 30 years ago. In the 1930’s the life expectancy of an S&P 500 company was 75 years. In 2012 this time between age and death looks more like 15 years. Yes business is evolving and moving faster than ever before!
So this begs the question for emerging markets and especially Caribbean businesses. How do we evolve our businesses to do the same before our younger, smarter, faster more agile competitors do? How do we shift Caribbean businesses to digital age?
Enter Digital Business Transformation!
Simply put, this is “The journey from where a company is, to where it aspires to be digitally!” – Miles Abraham, CEO, Si Media
So why? Why do we evolve business, change and drive to this new online world where everything is faster, customers have more choice, they trash talk your brand on Social Media and all that crazy, advanced, confusing stuff!??
Let’s start with the basics of success in business, customer service…
Well that’s interesting. I personally can’t tell you the last time I remember talking to a customer service representative. It’s probably because I am a techie and I do most of my shopping and business transactions over the Internet. So comparatively, have a look at this…
I shop at Amazon all the time! This letter is from Jeff Bezos(Amazon C.E.O.) to his customers, thanking them for being voted best at customer service! What is interesting about this information when compared to the Oracle data is one simple fact. It is almost impossible to find a customer service direct phone line on the Amazon.com website…Good luck getitng someone on a phone in less than 10 Minutes or in less than 30 Minutes.
In short, iff Oracle says most people want customer service on a phone line, and we can’t even find that button on Amazon.com, how is it that Amazon is the best customer service company in the world?
In the words of one famous Apple C.E.O. Everything Just Works!
Amazon focus so much on the customer experience and making it easy that you don’t have to resort to customer service. Executing on customer experience is the best route to customer satisfaction! Have you ever tried the 1 click to purchase button on Amazon? It’s simply amazing! Ok enough about the best customer service company in the world with no customer service agents you can actually speak too.
Let’s just glance at great entities such as Audi. At Audi showroom’s in Europe there is just one car! The entire process of selling you a car is done by a Digital experience. Letting you can configure any current Audi and have access to the full range of options to touch feel and experience in new Digital ways. We all love endless possibilities? And with the real estate prices in Europe it’s no wonder large digital screens take preference over filling your showroom with cars.
Another gem in Digital Business Transformation is the UK government. The mission statement of their main website gov.uk says it all: “Digital Service so good, people prefer to use them.” It also serves as a landmark way of thinking that has taken the UK civil service to be one of the most impressive online solutions in the world.
These great examples are proof in the pudding of a humble pie that Caribbean business will soon need to swallow to survive! Don’t want to swallow it? Then get ready to join the club of what I like to call the Dead Business Dinosaurs.
Dead Business Dinosaurs are well known. The companies that failed to evolve. The massive firms that did not adapt to the digital era, in the end the DBD’s either paid the ultimate price of bankruptcy or suffered a major loss in market share.
Let’s review some of the more obvious cases…
Record Industry: In 2000 the top 3 selling albums in the USA sold 25.75 Million copies. In 2012 the sold 9.14 million copies. Album sales have declined 64% in a decade!
Kodak filed for bankruptcy protection in January 2012 after 133 years of business. Share price dropped from $30 to $0.35 in 8 short years. Instant Photos didn’t just didn’t go out of style? 2013 Instagram sold to Facebook for $1,000,000,000.
Newspaper industry : In 2011 Google revenue will surpassed the revenue of the entire US Newspaper Industry and are set to pass the revenue of the global Newspaper industry this year! Since 2006 Newspaper revenue has dropped to 45% what it was.
And don’t even get me started on the demise of Nokia or the poor guys in the global Book retail industry.
How did they not see these changes coming? How did this happen?
Why did they fail? You can certainly read up about each one yourself, but to save you a few hours. Here are some very common traits of failure that are similar in all of these businesses.
- They had the wrong beliefs about what industry they were actually in, they were wrong about their customers needs.
- The thought they had time to play catch up.
- They did not see innovation or business model exploration as a need or requirement.
- They felt doing what they always did would always work.
So good-bye DBD’s and hello Digital Centric Business. Let’s take a look at them. There are a few great businesses that get this. They weren’t here when your parents were born tho. Yep, I am talking about Facebook, Netflix, Spotify, Apple, Google. All tech companies, all great businesses. But what is the same about them all? The one common. What have they invested heavily in that has driven their success? Their customers and their customer’s experience!
Digital Business Transformation is not about a shift to technology investment, it’s not the Next Digital Campaign or a new eCommerce site, although both of those may help. It’s more about infrastructure, process, organizational leadership and a renewed focus on the value chain and how it makes up the customer experience.
Essentially ten years ago if a product was purchased the customer experienced ended once the transaction was completed. This is not the case anymore. Being innovative and creating great customer experience is an essential ingredient for the success in any business. It just so happens out tech giants built tools into their product that enabled them to learn more about their customers and respond holistically to add value to the consumer over time.
The graph below demonstrates what we are saying in a more clear. Comparing your Dinosaur business models to new digitally evolved business models.
What the tech giants know and build their business around is that the value of a product after sale decreases over time however if you know your consumers habits and can add value on the road to purchase you will in effect increase their customer lifetime value!
Recipe for failure
1 cup of doing more of what we already know for growth
½ cup of “what made us successful in the past will make us successful in the future”
2 cups of Change is a bad thing – VIP ingredient
¼ cup of we can take our consumers and their behaviors for granted
1 Tbsp. of more important to manage threats than seize new opportunities
5 cups of we can take our consumers for granted – VIP ingredient
1 tsp. of viewing the Internet as a bolt on
Recipe for Success
Don’t use the recipe mentioned above and start thinking of ways in which you can digitally transform your business. Or as we try to put it…. try to think of what Integrated, Unified Customer Experiences can we envision for consumers …that will increases their customer lifetime value.
For more on how we can help your business transform for a Digital World visit our website www.SimplyIntense.com