Is your company wired for data and setup to leverage technology to unlock a new world of executing growth opportunities?
Technology today has moved from a business enabler (Productivity tools such as MS Office, Back Office) to a key architect and backbone (Data –> Analytics –> Insights –> Revenue generation opportunities to new business models) of a company’s long term value acceleration and differentiation strategies. New technologies are now enabling companies to connect and build deeper relationships with their customers 24/7 in some cases. This enables businesses to meet customer needs at-the-moment a need arises (just-in-time) and sometimes even earlier (predict).
TRADITIONAL BUSINESSES…
Pizza companies (traditional business) such as Dominos are investing more in technology including mobile apps, personalisation engines and drones. The insights from the mobile app usage, when people order pizzas (predictive analytics) and ability to up sell high margin desserts (chocolate lava cake) during the checkout, which was a harder sell and scale in the physical stores have opened a world of opportunities for Dominos. The race to deliver pizzas using drones highlights the importance of investing in technology not only for today (proven technology) but also for the future (experiments).
…AND NEW AGE BUSINESSES
Nest Labs (new age business), now owned by Alphabet/Google is able to gather data on energy usage and people movement to transform a boring industry (thermostats) and drive measurable outcomes – energy savings and environmental impact. Not only has it disrupted the traditional players including Honeywell but also now has the ability to unlock new business/revenue models leveraging the insights from the data. Examples: Call/recommend a HVAC specialist (predict) when one’s heating and cooling system breaks down or loses efficiency. Order air filters automatically (just-in-time) and have those delivered to one’s doorstep. One can visualize how on the backs of data, a thermostat company could expand into the services industry (HVAC specialist) and retail subscription/recurring revenue (air filters delivered to one’s doorstep at the right time).
ALL DATA DRIVEN
To unlock these new opportunities for your organization needs to
1. Invest in data collection and visualiSation: You won’t know what you will uncover and how valuable those insights will be until you start collecting and analyzing data. The modern-day equivalent of gold prospecting!
2. Look for Behavioral Insights not just analytics: “Who” (customer profiles including time) is likely to order the lava cake from Dominos during check out to and “What” do you want a customer to do (behavioral programming: example – if a newly registered Facebook user invites 5 friends and posts 2 photos the day he/she signs, then the user is likely to stick with Facebook for a long time) to ensure that a newly acquired customer becomes sticky drive more value than a dashboard of metrics.
3. Enable Machine learning to unlock hyperscale: Programming is so 1.0! Computers today have the ability to learn without being explicitly programmed. Identifying patterns and providing scale at unprecedented levels has never been easier thanks to lower processing (computer) costs and software including open source. Instead of targeting everyone in a company’s database with an email promotion, machine learning enables better targeting – what products to promote and at what time. You may also learn that women are more likely to add the chocolate lava cake to the pizza order than men and that probability is higher after 9.00 pm on weekdays.
4. Explore Outcomes oriented business models: Shape the pathways to move from transactional relationship with customers to a more connected and outcomes driven relationship. Printer companies such as HP can now reduce friction by delivering printer ink cartridge at one’s doorstep when one’s printer is about to run out of ink (connected and just-in-time). Running shoe sellers such as Nike can now expand into the fitness and coaching services space by recommending and selling running routines to prepare for your next marathon.
Is your company wired for data and setup to leverage technology to unlock a new world of executing growth opportunities?
The author is an Adjunct Professor at NYU. Formerly he was global CEO for Britannica Group. He is from New Jersey and can be reached at road.ahead@gmail.com
