Grow faster: Unlocking digital commercial value
Our world is being transformed by digital. According to World Economic Forum the digitalisation of consumer, retail, automotive, telecommunication, marketing and media represents a $18.25 trillion opportunity by 2025. This multi-trillion opportunity is largely attributed to the advancements in seven key technologies; Connected Devices, Artificial Intelligence, Big Data Analytics & Cloud, Platforms, Robotics, Custom Manufacturing and Autonomous Vehicles. The remarkable commercial effects of digitalisation may not bankrupt the traditional businesses, but to maximise share in digital era, businesses will need to become digital enterprises, rethinking every aspect of their business in order to develop new platforms, create new connected customer experiences and unlock new commercial value.
The challenge today is not “what digital can do for your business”, but “how fast can you unlock digital commercial value for your business”. Yes, the multi-trillion dollar Digital Transformation Race is on! The ones who could deliver the best connected customer experience and develop sustainable commercial platforms – faster, better and cheaper than anyone else would be the winners of Digital Transformation Race.
Without a doubt, digitalisation could unlock new commercial value for any business, but don’t expect magical powers from it. Just like the agriculture and industrial revolutions, digital revolution and the way it can transform a business follows a systematic and logical approach. At its core, digital transformation maturity is dependent on two elements; digital commercial growth and digital capability readiness. They both go hand in hand. One shall not foolishly invest in developing an ideal digital organisation (technology, people, processes, platforms, content etc.) without systematically observing signs of commercial growth. Equally, one shall not ignore the importance of advancing digital capabilities after witnessing clear signs of commercial growth.
Whether a business is at a beginner, intermediate or advanced level of digital transformation, they could map their transformation against the below Digital Transformation Maturity Index to determine areas requiring investment, optimisation or redundancy. As a simple rule, investment in digital capabilities shall not be more than 5% of a 3 year digital commercial growth plan i.e. you should only allocate $5 million to invest in advancing digital capabilities over 3 years, if your digital commercial growth plan aims to deliver $100 million over 3 years.
After a business has developed its digital commercial growth plan and mapped its digital transformation maturity, it shall then look into advancing and strengthening its digital capabilities across technology, data and content. Let’s now explore each of the capability areas and how to approach them to achieve profitable digital transformation faster than anyone else.
Technology: Invest following the “outcome-based” model
All digital transformation conversations shall start with technology. Yes, data and content are critical to achieve digital transformation, however, without the right technology it’s impossible to collect data or serve content e.g. you won’t understand what customers are doing on your physical or online sites, without correctly implementing analytics technology NOR your customers will ever be able to find your content across devices and channels if you don’t have the technology to serve it.
Any investment in digital technologies shall strictly be based on an “outcome-based” model. In an outcome based model a business follows its digital commercial growth plan to identify technologies suitable to help achieve its commercial objectives. For example, Heathrow Airport investment in digital technologies had clear commercial objectives;
· Raise revenue by promoting products and services before, during, and after travel.
· Engage 78 million travellers with more personalized, one-on-one service.
· Deliver an integrated, end-to-end experience with customers over web, mobile, and in-airport platforms.
A clear commercial approach to investment in technology helped Heathrow Airport deliver Artificial Intelligence enabled connected experiences to 78 Million travellers resulting in 60% higher spend per customer.
Choosing the right technology could be a complex and overwhelming task for senior stakeholders. Using the below “outcome-based technology investment model” could make things simpler. The model is based on seven key technologies offering multi-trillion dollar opportunity to businesses and society by 2025 (the list of technologies referenced in the model is not comprehensive and doesn't take into account emerging technologies e.g. Blockchain).
Big Data Analytics: Invest following the “interaction-based” model
In an age of the “connected customer” where people are consuming more content across more devices and channels than ever before – developing a single and whole customer view is the key to enable connected experiences.
More is known about people than ever before; their demographics, purchase history, location, browsing behavior online, and interactions with wearables, car, house and refrigerator. This flood of data is causing “data explosion” flowing through devices, servers and cloud and could be overwhelming for many businesses trying to act on it.
Senior executives appreciate the value data could unlock for their business, but when presented with all the complexities of the “data world” they can’t seem to get how data could practically unlock commercial value for their business – NOW. The promise of longer-term results is good, but senior executives are pressured with delivering results today. It’s about time for data to deliver commercial value today, not tomorrow.
To make the complex world of data simple, all data investments shall follow the “interaction-based” data model. In an “interaction-based” model a business follows its digital commercial growth plan to understand individual customer interactions across three areas and help identify real-time opportunities supporting commercial objectives;
· How customers are interacting with business properties (online & offline)
· How customers are interacting with partner properties (online & offline)
· How customers are interacting with competitor properties (online & offline)
Liberty Global (the owner of brands such as virgin media, UPC and Vodafone Ziggo) applied “interaction-based data model” to unlock commercial value. As a result, the model helped Liberty Global achieve 23% increase in click-throughs and a 68% commercial lift.
To successfully deploy “interaction-based data model” a business shall develop a clear and simple connected data architecture and source the technology to support it. The below data architecture template could be used to help develop a single view of the customer, identify gaps and source the right technology to materialise it.
Content: Invest following the “context-based” model
So, you have prepared your digital commercial growth plan, mapped your digital transformation maturity, identified and invested in the right technologies and created a connected data eco-system – now comes the most critical part in your digital transformation journey; “the content” OR “what, where, when and who you should talk to sell your products and services”. Regardless of how good your digital commercial plan, technology and data infrastructure is, if you can’t deliver a “connected experience” at the right time and place all will go to waste.
Businesses are recognising that digital customers increasingly demand high-quality personalised experiences rather than just products and services. Digital customers expect relevant, targeted and personalised brand interaction across devices and channels. Nevertheless, a study from CMO.com reveals that more than 90% of tier 1 retailers lack the capability to deliver targeted and personalised content.
To enable connected experiences and speed up the ability to deliver targeted and personalised content, businesses shall follow a “context-based content model”. In a “context-based” model content is developed, analysed, segmented and customised based on customer journey stage, predictive intelligence, past and real-time behaviours prior to serving the content. Today, advances in AI and machine learning are opening up new possibilities for mass hyper-personalisation and mass hyper-customisation.
Following the “context-based content model”, Sky created and served 2.7 million customers a more connected and personalised experience resulting in over 10% increase in conversion with more than 45,000 incremental orders per year.
To create “context-based content” and deliver connected personalised experiences, a context-based content framework and roadmap shall be developed. The following framework could be used to help speed up the efforts, source the right technology and achieve commercial results faster.
To conclude:
The speed at which technology, content and data are transforming our world means businesses need to constantly reinvent their offerings to keep up with the rapidly evolving expectations of digital customers. “Customers are empowered by digital; they have new behaviours and new expectations that are pushing us to evolve. We have to become more reactive and more agile; we need to listen to what our customer expect and also track how our digital environment is evolving”, says Benedicte Javelot, Chief Strategy Officer, Orange Group.
To succeed in the digital era and achieve true digital transformation faster and better than anyone else, business leaders need to focus their investments in technology, data and content on commercial value based outcomes. If you feel your business didn’t get it right the first time, it’s still not too late to reinvent, even if this requires short-term disruption. It’s about time for business owners and CEOs to own digital transformation and challenge the status quo, from board room to front line in order to unlock new efficiencies, new customer experiences and new multi-trillion dollar commercial value - faster and better than anyone else.
