Getting a product to market has shifted from a one-time transaction to a long-term active engagement between buyer and seller. In the past, customer engagement in most transactions would end upon payment, but today that is just the beginning.
The digital business has a vested interest in maintaining such a long-term interaction with its customers. Not only does this make the brand top of mind for the customer, but it also leads to more intelligence about the customer and their changing needs and makes the business a conscious presence in its customers’ day to day lives. Much of this change is possible because of greater “smartification” – meaning that the product or service you sell are now connected; it’s going to require periodic updates to keep delivering improved performance features, and security. You’re no longer just selling goods, but rather a customer experience, and you need a platform to support such a living product’s lifecycle, from introduction to sale to post-sales engagement.
The platform helps ensure the customer is getting the most out of the purchase through services, updates and information sharing. The platform is what allows digital companies such as Tesla, Airbnb and Uber to stand out from the crowd by reinventing a product or service that most of us probably didn’t realize needed reimagining – and then by expanding their platform. On my recent trip back to Austin, I was surprised to see that Uber’s electric scooter sharing service, Jump, was all the rage – something that was kicked off in Santa Monica. Airbnb has added “experiences” – immersive activities with local hosts such as historical bike rides through Boston’s historical areas. Both of these services increase the engagement the customer continues to have with Uber or Airbnb.
Thanks to their employment of digital tools to create a successful customer-engagement platform, these companies have taken leadership in their respective markets and forced established competitors to reexamine their own processes and market approaches.
What Is a ‘Platform?’
But what exactly does it mean to focus on platform instead of product? It means having a foundation for continuous growth. A digital business builds on its platform with new ways to touch customers’ lives by improving on products and services and by refining customer interactions, making adjustments and enhancements as necessary. Tesla uses its platform to update vehicle software and add functionality, extending the range of its vehicles or enabling greater autonomy.
A platform also allows you to bring in partners, collaborators, developers and suppliers, making it easier to exchange information and knowhow to innovate. Think of an urban development project involving multiple parties – architects, builders, utilities and IT consultants, to name a few. Through a digital platform, all of them can work together, contributing ideas, sharing information and identifying issues for quick resolution.
Airbnb uses its platform to great effect as well. Whether the customer is looking to book lodging, engage with the owner, file a complaint, find interesting things to do in the city – it’s all on their platform. Not only do customers now know they have more and better options to suit their preferences, it’s become the one stop shop for an intricate web of participants – property owners, on-site managers, payment processors, cleaners and suppliers – behind the scenes, and provides a friendly interface for customers to log on and plan their next experience.
From Legacy to Digital
Airbnb and Tesla are children of the digital era. They didn’t need to rethink legacy processes and technologies to develop digital platforms. But most companies do, and some are doing it better than others.
Take Netflix, which started out as a DVD mailing service. Today DVDs are a miniscule piece of the business, as the company has evolved into content-streaming giant with its own studio. Netflix built on its customer-engagement platform not just to evolve from its original format but also to expand its horizons and give established competitors a run for their money.
Amazon, originally an online bookseller, is now a huge marketplace for its own suppliers and other sellers. It is also one of the biggest providers of cloud services and is trying to position itself as also a leading Internet of Things (IoT) platform provider. GE, a company with its roots in the work of inventor Thomas Edison, has embraced digitization with a platform that welcomes contributions from third parties to develop applications and foster innovation. The company also uses IoT sensors and software to change its approach to maintaining field equipment, such as wind turbines, from a schedule based on the calendar to one based on sensor-generated data.
Taking cues from organizations that have successfully transformed themselves – sometimes shedding and completely transforming what they represent – a growing number of legacy companies are taking solid steps toward digitization. IDC estimates 40% of technology spending by 2019 will go toward digital transformation projects.
Successful digital companies are finding ways to monetize new services and create better customer experiences. For instance, predictive maintenance can generate new subscription-based revenue streams. If you can create the content and deliver it yourself, as in the case of Amazon, you establish more touch points to keep the customer engaged for the long term.
What’s In It for Businesses
Businesses need to innovate to stay ahead of competitors, and building a flexible platform helps achieve that. A platform also makes your set of co-dependent, well-integrated products and services sticky. For instance, companies like Amazon, Apple, or Google use their smartphone platforms to get users to stick with them by adding more services, such as music streaming, photo sharing, integration with home devices, and cloud-based data backup. The more services you offer, and the better you integrate them, the more likely you are to retain existing customers and draw new ones.
Digital innovators are leveraging the flexibility and scalability of cloud infrastructures, automation and new technologies to better know and serve customers. Data is at the center of it all, delivering the insights that allow companies to anticipate and address customer needs in a continuum. How you execute on data insights to build a customer-engagement platform will a key to success in the new digital age.
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