customer as a digital strategy

Customer as a Digital Strategy

All rights reserved © Frankly Partners 2015

Roope Ruotsalainen Chief Digital Officer

Frankly Partners

@ruotsalainenR

Digital strategy?



Digital transformation

Digital [business] strategy

Digital marketing strategy

More people have access to a mobile phone than sanitation facilities.


No candle-maker has become bulb manufacturer. No carriage-maker has become car producer. The post office did not invent the email.



Ecosystem of gaming industry

Ecosystems of mobility (devices, applications)

Ecosystem of music industry

Ecosystem of media industry Ecosystem banking and

virtual currencies

Transformations have tendency to create ecosystems


Customer experience Operational process Business model

Customer understanding

Analytics based segmentation Socially-informed knowledge

Top line growth Digitally-enhanced selling

Predictive marketing Streamlined customer process

Customer touch points Customer service

Cross-channel coherence Self service

Process digitisation Performance improvement

New features

Worker enablement Working anywhere anytime

Broader and faster communication Community knowledge sharing

Performance mgmt. Operational transparency

Data-driven decision-making

Digitally-modified biz. Product / service augmentation Transitioning physical to digital

Digital wrappers

New digital business Digital products

Reshaping organizational boundaries

Digital globalisation Enterprise integration

Redistribution decision authority Shared digital services

Lähde: MIT Center for Digital Business


Digital transformation

Digital [business] strategy

Digital marketing strategy

Human behavior

That’s why customer as a digital strategy.


Customer Experience Drives the Sales


1

1.3 1.5

1.8 1.9

2.4 Customer is the centerpiece of business success. In transaction-based business, sales are driven by good customer experience.

Source: Harvard Business Review

Customer Experience Score

Annual revenue increase per customer

Content is the King Kong. Customer is the king.


Customer is still the king, but companies just didn’t get it.


The ghost of Gutenberg lives strong in businesses


A4-paper Screen

Online & email design PDF’s

eMagazines Online-catalogue

… …

What is Customer as a (Digital) Strategy?


Competitive advantage and

classic strategy literature benchmarks

the company to its competitors.



Cost leadership Lowest prices Self-service optimization

Company strategy

Customer expectations of the brand

Customer experience strategy

Differentation Innovation Proactive guidance

Segmentation Fit Tailored intimacy

”Companies still aim to maximize the value creation for the owners, but it is scarcity, if the owners' value creation happens without creating value for the customers.”

Do not benchmark competitors.

Aim to create value for customers.


Digital transformation + value creation = velocity


All rights reserved © Frankly Partners 2015 Source: Harvard Business Review, adapted

LAUNCH RAMP-UP

EXPLOIT RECONFIGURE

DISENGAGE

Competitive advantage, whether it lasts two seasons or two decades, goes through same life cycle. However, as competitors and customers become unpredictable, sustainable competitive advantage does not exists.

Instead, companies in high-velocity industries must learn to cycle rapidly through the stages of competitive advantages. Understanding customer experience blind spots builds ground for a set of transient advantages.

Competitive advantage life cycle Transient value creation life cycle

To succeed in creating value for customers, understand the internal digital barriers:

1. Technology driven development tends to fail

2. Data is hazardous waste without proper insights



Technology easily becomes important

through impressive costs. And takes over.

Source: Business Insider

Most of the companies ramp up systems and processes, rather than building superior customer experiences of which the systems and processes support.


Systems

Processes

Touch points

Interactions

Experiences

Most of the companies

Winning companies begin from the customer. Methods of growth hacking create product and service market fit.


Systems

Processes

Touch points

Interactions

Experiences

Winning companies

Legacy software shapes our decision making.

If we make technology driven decisions, we never become like banking in Africa. Completely mobile.


“The ICT, as we knew it, has come to its end.”


Companies lean towards customer driven digital business by hiring Chief Digital Officers

All rights reserved © Frankly Partners 2015 Source: Gartner

2016

30 % of companies have started to capitalize the

insights they posses

2017

50 % of companies who operate on restricted or

strongly controlled industries employ a CDO

2020

CDO’s begin to overrule the CIO’s as information and data strategy leads

2025

Most of the companies employ a CDO, who is in central role defining the

BI and ICT strategies

To succeed in creating value for customers, understand the internal digital barriers:

1. Technology driven development tends to fail

2. Data is hazardous waste without proper insights



Insights we currently have

Digitalized human behavior


Data and tools are not enough. Insights require human touch.

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10

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60

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80

90

13000

13500

14000

14500

15000

15500

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16500

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17500

18000

2006 2007 2008 2009 2010 2011

Murders in the US

Internet Explorer market share

# of clients

Display ad impressions

# sold items Total profit (eur)

Channel’s share of total revenue

Cost of marketing Product returns (%)

Sent emails (#) Emails opened (#) Emails opened (%)

Emails clicked (#) Emails clicked (%)

Coupons prited (#) Coupons used (%)

Visits Pages / visit Avg. time per visit New visits

Ecom revenue (eur)

Avg. purchase (eur) Ecom conversion (%)

Total revenue (eur)

Display ad CTR % Display ad CONV % Cost per click

SEM clicks (#) Most popular content/pages SEM CTR % SEM Cost per click SEM CONV %

Site search most popular KW’s TV ad contacts (#) TV ad cost per contact TV ad OTS opportunity to see Facebook followers (#) Facebook post reach (#)


Hmm, okey. Good to know. [What I was doing before being disturbed…?]

Hey, I’ve forecasted that next week there’s less demand than normally!

How to adopt Customer

as a Digital Strategy?


Strategy work begins by understanding the customers.


Moreover, the core is in what the customers are aiming to get done, instead of what they do.



Customers’ needs

Customers’ expectations

Customers’ emotions

Customers’ motives

Moments of truth

Customers’ conventions

Aiming to get done

Doing

blind spots Recognize the pain and gain spots. By analyzing what customers are aiming to get done versus what they end up doing within the context of current experience, growth opportunities can be found.


Participants

Prototypes

Be iterative: possible new ideas bubbling within the prototyping

Replicate real life conditions: -  emotionally charged -  unconscious behavior -  being distracted by irrelevant factors

Pre-validate, but moreover empower customers to co-create the prototypes to market ready concepts

Product Market Fit: research and analytics insights through gamified prototypes

Customer insights form the core of your success. Agile developing helps to launch services with market fit.


Frank you!


Roope Ruotsalainen Chief Digital Officer

Frankly Partners

@ruotsalainenR mob +358 40 735 5557

[email protected]

customer as a digital strategy

Business

ruotsalainenr digital

customer content

good customer experience

transactionbased business

predictive marketing

king kong

product service augmentation

informed knowledge