Since business is about marketing, applying digital technology has become the most critical element for any company in the battle for the customers’ mind and profitability.
Let’s review the digital drivers and their value:
- Online transactions: Customers can shop at their convenience with their smart devices. This allows the company to have fewer tangible assets and lowers expenses.
- Broader customer access: More online options are available.
- Integration: Digital customer information creates a profile and history of purchases that can be used for better customer relations management.
- Scalability: New products and services can easily be offered to customers e.g. Amazon.
- Analytics: Sophisticated algorithms can mine transactional data and produce a variety of predictive insights into trends and even customized new product offerings.
The application of digital technology creates an opportunity for any company to operate more efficiently and serve their customers better. In effect, companies can understand their customers better and make more profitable marketing decisions.
The greatest challenge for any management team is to change the culture from the tangible asset mentality to the intangible asset structure of a digital technology company. Even after seeing new logical information, it is hard to transition out of doing the same old things.
Many CEO’s have hung onto failing strategies until they were too far down the slippery slope to irrelevance to do anything about it. A&P and Radio Shack were dead ten years before they actually closed the doors.
Jeff Bezos, founder, chairman and CEO of Amazon.com, said, “What’s dangerous is not to evolve.”
Digital technology provides for an endless stream of new strategic choices driven by information provided by your customers. Creating a one-to-one electronic dialogue with a customer is the most powerful marketing relationship any company can achieve.
The fundamental concept of customer relationship management is to increase its customer’s lifetime value. What better way to achieve this goal than through a one-to-one online relationship wherein the customer shares their changing requirements with you?
Every time you have an opportunity to interact with a customer you have a wonderful opportunity to increase awareness and affinity. Predictive analytics provides the ability to surprise and delight your customers. Most customers will gladly provide feedback and information if the process is integrated and simple.
Virtually engaged customers will generate greater affinity and long term value and clarity for the company. However, you also need to give them an incentive in the form of some kind of digital reward for continuing with you as a partner in progress. This is especially true of millennials.
Amazon’s customer centric model is good to follow. Their goal is to provide the most convenient way to buy anything online. It’s certainly hard to refute their success.
Tips for CEOs:
- If you are embracing digital technology yourself and appreciate the value you are deriving from it, apply that same experience to your company.
- The “internet of things” is here—embrace it.
- Five billion people use mobile phones and smart devices to interact and transact today—and that number is growing exponentially.