Every business is a digital business

You’ve likely heard it said that “every business is a digital business” and said to yourself – sure, there are opportunities to digitalize parts of every business, but that doesn’t mean it’s a digital business.??An oil and gas company produces oil and gas, a manufacturer produces and sells soap, shampoo, juicers, furniture, toys, a trucking company moves various goods, a cruise line houses, feeds, entertains, and transports its guests and so on and so forth. How are these digital businesses? You are right, and yet you are very wrong.??Let’s declare the right as the obvious. The wrong is restricting your view to the proverbial “actual product or service”. If you harken back to your Marketing 101 class you may recall that there is the core product (the benefit delivered by your product or service), there is the actual product (described above) and then there is the augmented or extended product.??Your actual product is the widget you manufacture or service you provide, your extended product would include your warranty, financing, delivery, technical support, installation, user guides, payment terms, and wait for it, digital services that differentiate the offering and experience you are providing. And if you’ll accept that customers buy augmented products (in pursuit of the benefit), not “actual” products, then every business is indeed a digital business. Let’s look at opportunities to leverage digital in your business ex of webifying your back office or adopting a hybrid physical / virtual work environment. I don’t want to trivialize the latter, there are huge benefits associated with the introduction of RPA or Reg Tech, or robust intranet deployments, or going to the cloud with your ERP or CRM. I simply want to focus on leveraging digital to extend / augment / differentiate your customer’s experience with your actual product and the benefit they are ultimately seeking. Let’s explore five opportunities to leverage digital in business.

Engaging with your brand

First, although I wouldn’t necessarily declare foremost, digital affords you an opportunity to declare and convey and reinforce your brand. And yes, we buy brands. For example, I know of an industrial products distributor who is known for availability – if you need a part to get a machine on your shop floor going again, they likely have it in stock. There was a moment in time when you visited their website to purchase that part and either you could purchase it, or it showed out-of-stock. Not very useful when out-of-stock results in a series of calls to locate the product somewhere in its various locations because the web experience couldn’t interrogate all locations in its distribution network. Their brand promise was compromised online. Once they implemented “endless aisle” the experience changed from in-stock / out-of-stock to: when could you get the product, this afternoon, tomorrow, two days hence, next week and at what price, that their “availability branding” was digitally enabled. Likewise, Amazon? is known for personalization, USAA? for easy-to-use and Dell? build-to-order (think the configurator). The opportunity here, is leveraging digital to reinforce your brand and deliver on your brand promise.

Customer acquisition and retention

Digital represents both a customer acquisition opportunity and a customer retention opportunity. Whereas in the bricks and mortar world, especially for retail, it’s all about location, location, location, there really isn’t an equivalent in the digital / eCommerce world. Online / eCommerce is about search, search, search, portal, partner, social, search, email. In other words, people don’t commute by your business in the morning, the evening or while out for lunch. The nearest equivalents are “searching” for you or your products and services thru one of the search engines, or advertising online where people hangout, i.e. one of the social platforms they frequent. If you have their email and they haven’t blocked you, or unsubscribed then that remains an acquisition channel as well.?

It’s the customer retention side of this equation that gets more interesting. Digital affords so many opportunities to augment the actual product. IOT enablement is certainly one. If you’re in the elevator business and you can monitor the health of the elevator and proactively service the elevator prior to failure – that’s digital. If you offer online digital ordering for your product and it’s easy to use your ordering portal, the portal reflects current contract terms, visibility into availability, it processes purchase orders, acknowledgements, invoices and payments electronically, provides inventory / asset tracking and depreciation, and so forth, that’s digital. In the latter,and as an example, getting your retail banking customers to leverage Bill Pay, that’s a retention strategy – the most painful part of leaving one financial institution to move to another, is transferring Bill Pay. Likewise, if your customer loads all their assets into your B2B commerce platform and tracks warranty expirations and depreciation, it becomes painful to move – a retention strategy. In other words, offering digital services that your customer appreciates and becomes comfortable and dependent upon and see as an extension of your product – that’s all about retention, and that’s digital. And there are so many more opportunities here!

Commerce

Promoting and selling your products and services online is sort of old news. If you think you don’t need to offer such an ability – would love to hear from you. I won’t debate that some companies may choose not to sell directly, rather sell only through distributors, that’s their choice. Their products and services are still being sold online – just by someone else. Even in that instance, leveraging the web, mobile or social media to drive awareness is still an opportunity. And, while your distributors are generally agnostic – they will prioritize in their merchandising what sells, and therefore you may need to invest in marketing yourself or the distributor may require “market development funds” to promote your products versus a competitive offering in their own digital marketing and promotional efforts.??As I write this, the real questions you should be addressing / answering are, is your online buying (B2C) or ordering (B2B) experiences easy-to-use, fast, engaging, and personalized. Are you leveraging all the digital channels – those frequented by your customers and prospective customers – to promote your brand, products, and services? Are your digital properties safe and secure, your foundational tools flexible and themselves easy to use by your employees? Are you fully leveraging commercial off the shelf??solutions wherever possible – which essentially amortizes development and maintenance costs across all of the provider’s clients? And, neither last nor least, are you fully leveraging big data to drive your decision making across all your merchandising and experiential opportunities. Your extended product / service includes the ordering and shopping experience whether enabled and offered directly by you or others. I recall a tech manufacturer a few years back investing $100M in their digital B2B commerce platform because they were losing significant market share to a competitor who simply offered and better digital buying experience – the products were very much the same between the competitors.

Omni-channel

Omni-channel has been an aspiration for so many – that understand it. Said simply, it means connecting with your customers anywhere and everywhere that is relevant, in combination with “start in one channel, continue in another, finish in even another.” For example, maybe the customer starts their product search on a mobile device engaged with a BOT, continues it on the web, decides to initiate a chat, feels the then necessity to call and your sales or service rep picks up context from engagement in those prior channels. Sounds really cool, makes a wonderful impression, saves time rehashing and restarting conversations and purchase paths, but is frankly really hard to do, not impossible, just really hard to do. And it applies both to customer acquisition and retention, both sales and support. Successfully implementing omni-channel is a distinct differentiator for at least several more years until everyone is doing it.

Digital disruption

You’ve probably seen the graphic (easy enough to find one version or another on the web) that depicts:

Uber? – the largest taxi company and yet it owns no taxis

Netflix? – the largest movie house with no physical theatres

Alibaba? – the world’s largest retailer and it holds no inventory

AirBnB? – the largest hotel chain that neither owns or manages any hotel properties

Facebook? – the largest content storehouse and distributor and they don’t produce any content themselves.

These are typically held out as examples of?digital disruption.?

The question you should be asking is how might you be disrupted or how might you disrupt. When you look at the pace of change from Web 1.0 (the read-only syntactic web, think web browsers, mobile phones, email, search, Html, VOIP), to Web 2.0 (the read-write social web, think open source, open banking, file sharing, Bluetooth, eCommerce, smartphones, blogs, crowd sourcing, ebooks, streaming, cloud, gamification, cryptocurrency), to Web 3.0 (read-write-execute semantic web, think IOT, 3D printing, big data, predictive analytics, RPA, VR/AR/AI/ML, quantum computing, smart buildings, cars, cities, holographic displays), to Web 4.0 (the reasoning web, think intelligent, autonomous, self-learning agents), and you account for the facts that while it took 73 years for the telephone to hit a 90% adoption rate from initial commercialization, it only took 8 years for the smart phone to achieve the same and more people subscribe to a mobile phone service than own a toothbrush or more people are online than have refrigeration in their homes. The opportunities for digital engagement, differentiation, product extension, new products and services and disruption abound.?

However, I would caution that it’s really not about the tech, it’s about the users. While we always refer to the millennials and the tech they grew up with, we all need to acknowledge that Generation Z has arrived and their expectations are very different having grown up in an intensely social, gamified, ugc (user generated content) world. Think about that for a moment.?

My advice, get a good cross section of your organization together and hold a “how would one put us out of business” strategic brainstorming / hack-a-thon every six months fed by a variety of insights and analytics looking at industry trends, what your competitors are doing, what your customers look like (personas), what their experiences are with you (customer journey maps), demographic and psychographic evolution, cultural trends, environmental agendas, emerging legal and governmental concerns and of course, technology advancements. Good companies and governments have done this annually. Great companies, in acknowledging that fast has become faster and they have no monopoly on smarts or energy or enthusiasm or capital, are doing it much more frequently.

I hope the above list gets you thinking and lifts your appreciation for:?every business a digital business.