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Customer as a Digital Strategy

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Customer as a Digital Strategy - seminar presentation on 17.2.2015 in Tallinn, Estonia

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Customer as a Digital Strategy

  1. 1. Customer as a Digital Strategy All rights reserved © Frankly Partners 2015 Roope Ruotsalainen Chief Digital Officer Frankly Partners @ruotsalainenR
  2. 2. Digital strategy? All rights reserved © Frankly Partners 2014
  3. 3. All rights reserved © Frankly Partners 2014 Digital transformation Digital [business] strategy Digital marketing strategy
  4. 4. All rights reserved © Frankly Partners 2014 Digital transformation Digital [business] strategy Digital marketing strategy
  5. 5. More people have access to a mobile phone than sanitation facilities. All rights reserved © Frankly Partners 2014
  6. 6. No candle-maker has become bulb manufacturer. No carriage-maker has become car producer. The post office did not invent the email. All rights reserved © Frankly Partners 2014
  7. 7. All rights reserved © Frankly Partners 2014 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
  8. 8. All rights reserved © Frankly Partners 2014 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
  9. 9. All rights reserved © Frankly Partners 2014 Digital transformation Digital [business] strategy Digital marketing strategy Human behavior
  10. 10. That’s why customer as a digital strategy. All rights reserved © Frankly Partners 2014
  11. 11. Customer Experience Drives the Sales All rights reserved © Frankly Partners 2014 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
  12. 12. Content is the King Kong. Customer is the king. All rights reserved © Frankly Partners 2014 Customer is still the king, but companies just didn’t get it.
  13. 13. All rights reserved © Frankly Partners 2014 The ghost of Gutenberg lives strong in businesses
  14. 14. All rights reserved © Frankly Partners 2014 A4-paperScreen Online & email design PDF’s eMagazines Online-catalogue … …
  15. 15. What is Customer as a (Digital) Strategy? All rights reserved © Frankly Partners 2014
  16. 16. Competitive advantage and classic strategy literature benchmarks the company to its competitors. All rights reserved © Frankly Partners 2014
  17. 17. All rights reserved © Frankly Partners 2014 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
  18. 18. ”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. All rights reserved © Frankly Partners 2014
  19. 19. Digital transformation + value creation = velocity All rights reserved © Frankly Partners 2015
  20. 20. 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
  21. 21. 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 All rights reserved © Frankly Partners 2015
  22. 22. All rights reserved © Frankly Partners 2014 Technology easily becomes important through impressive costs. And takes over. Source: Business Insider
  23. 23. Most of the companies ramp up systems and processes, rather than building superior customer experiences of which the systems and processes support. All rights reserved © Frankly Partners 2015 Systems Processes Touch points Interactions Experiences Most of the companies
  24. 24. Winning companies begin from the customer. Methods of growth hacking create product and service market fit. All rights reserved © Frankly Partners 2015 Systems Processes Touch points Interactions Experiences Winning companies
  25. 25. Legacy software shapes our decision making. If we make technology driven decisions, we never become like banking in Africa. Completely mobile. All rights reserved © Frankly Partners 2015
  26. 26. “The ICT, as we knew it, has come to its end.” All rights reserved © Frankly Partners 2015
  27. 27. 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
  28. 28. 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 All rights reserved © Frankly Partners 2015
  29. 29. All rights reserved © Frankly Partners 2014 Insights we currently have Digitalized human behavior
  30. 30. All rights reserved © Frankly Partners 2014 Data and tools are not enough. Insights require human touch. 0 10 20 30 40 50 60 70 80 90 13000 13500 14000 14500 15000 15500 16000 16500 17000 17500 18000 2006 2007 2008 2009 2010 2011 Murders in the US Internet Explorer market share
  31. 31. # of clients Display ad impressions # sold itemsTotal 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 visitNew 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 (#)
  32. 32. All rights reserved © Frankly Partners 2014 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!
  33. 33. How to adopt Customer as a Digital Strategy? All rights reserved © Frankly Partners 2014
  34. 34. Strategy work begins by understanding the customers. All rights reserved © Frankly Partners 2015
  35. 35. Moreover, the core is in what the customers are aiming to get done, instead of what they do. All rights reserved © Frankly Partners 2015
  36. 36. All rights reserved © Frankly Partners 2015 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.
  37. 37. All rights reserved © Frankly Partners 2015 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
  38. 38. Customer insights form the core of your success. Agile developing helps to launch services with market fit. All rights reserved © Frankly Partners 2015
  39. 39. Frank you! All rights reserved © Frankly Partners 2015 Roope Ruotsalainen Chief Digital Officer Frankly Partners @ruotsalainenR mob +358 40 735 5557 roope.ruotsalainen@franklypartners.fi

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