Customer as a Digital Strategy

Customer as a
Digital Strategy
All rights reserved © Frankly Partners 2015
Roope Ruotsalainen
Chief Digital Officer
Frankly Partners
@ruotsalainenR

Digital strategy?

Digital transformation
Digital [business] strategy
Digital marketing strategy

More people have access to a
mobile phone than sanitation facilities.

No candle-maker has
become bulb manufacturer.
No carriage-maker has
become car producer.
The post office did not invent
the email.

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

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

Digital transformation
Digital [business] strategy
Digital marketing strategy
Human
behavior

That’s why customer as a digital strategy.

Customer Experience Drives the Sales
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

Content is the King Kong.
Customer is the king.
Customer is still the king, but companies just didn’t get it.

The ghost of Gutenberg
lives strong in businesses

A4-paperScreen
Online & email design
PDF’s
eMagazines
Online-catalogue
… …

What is
Customer as a
(Digital) Strategy?

Competitive advantage and
classic strategy literature benchmarks
the company to its competitors.

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

”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.

Digital transformation + value creation = velocity

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

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

Technology easily
becomes important
through impressive costs.
And takes over.
Source: Business Insider

Most of the companies
ramp up systems and
processes, rather than
building superior
customer experiences of
which the systems and
processes support.
Systems
Processes
Touch points
Interactions
Experiences
Most of the
companies

Winning companies begin
from the customer.
Methods of growth hacking
create product and service
market fit.
Systems
Processes
Touch points
Interactions
Experiences
Winning
companies

Legacy software shapes our decision making.
If we make technology driven decisions, we never
become like banking in Africa. Completely mobile.

“The ICT, as we knew it, has come to its end.”

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

Insights we currently have
Digitalized human behavior

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

# 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 (#)

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!

How
to adopt Customer
as a Digital Strategy?

Strategy work begins by understanding the customers.

Moreover, the core is in what the customers are
aiming to get done, instead of what they do.

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.

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

Customer insights form the core of your success.
Agile developing helps to launch services with market fit.

Frank you!
Roope Ruotsalainen
Chief Digital Officer
Frankly Partners
@ruotsalainenR
mob +358 40 735 5557
roope.ruotsalainen@franklypartners.fi

Customer as a Digital Strategy

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