Planet of the Apps
Tuesday, July 1, 2014 at 10:00AM
Old ideas for managing new technology.
Your business is ticking along nicely. Out of left field a low-cost start-up zooms into your market and starts picking off customers. They’re small, so they can cherry-pick. Their cost base is low and they undercut you. They sell via an app that’s soooo easy to use and they outsource delivery to a logistics firm that gets the product to the customer quicker than you can.
Welcome to the digital challenge.
It is hard to think of an industry where this isn’t happening. For many managers it’s overwhelming. Wherever they look, everyone is talking digital delivery on mobile devices. The sheer breadth and scale of new technology can be threatening. It’s constantly changing. How do you cope?
Stay Underwhelmed
Not changing are the basic principles of running a business. Want to climb the digital hill? Do it one step at a time.
First of all, there is no single technology that is going to give you an end-to-end answer to all your digital questions. So start with an old idea. Once known as the marketing funnel, today it’s called the decision journey. You probably know it but let’s run through it again.
The journey starts with the customer becoming aware of your product or service, then considering yours and comparing it to others. Next is the intention to buy, then the purchase, on to implementation, possibly followed by support services, then cementing the relationship and hopefully maintaining it with further transactions. Nine steps in all. Not all will apply.
Look at each of one and examine how you can use technology to facilitate, influence or execute any of them more effectively to build volume.
Make it a project.
Use a team - that's at least two of you - and role-play a start-up that is trying to disrupt your business. What could you do to snatch away part of your market using new technology? Identify the best improvement for each step and make it happen. You will not only end up with vastly improved business processes. You’ll also get digitized along the way.
Don’t overlook your strengths. That’s what newspapers did with classified ads for real estate, cars and jobs. Instead of using those strengths to develop online power in each, they stuck with print. Most lost all three to internet start-ups.
Use your own advantages, and that includes your own knowledge and business experience. Big data isn’t just something out in the digital ether. Dig into your own customer base. There’s plenty of data already there. Start targeting repeat business.
Don't stop at customers
Next, move on from customers and look right across your value chain. Start with your suppliers and examine each step along the way to delivering your product or service. That’s where the cost savings are.
Competitive advantage can comes from digital cost reduction. It boosts profit margin, some of which you may have to give away to capture and retain market share. Margin is just as important as volume. You will need more of it to compete in a digital world.
Examine your decision journey and your value chain step by step. That’s not a new idea. It’s still about volume and margin, digital or otherwise.
Reader Comments (4)
Great reminder Alan. Any process engineering requires the same approach. One step at a time.
I just read an article that said 91% of SMEs don't have websites that are enabled for mobile devices. There's a first step and not a big ask either.
My experience on this? Focus not the most convenient way to buy. Ie, as close to ONE CLICK as you can get. Next look at digital ways to cut costs. Last is social media. Despite the hype, it's mostly useless for promoting your brand. Even more so now that everyone's doing it.
Great piece. I came across this looking for the apple post of the same name. Got more out of this one that I did out of the apple version. Nice stuff. Back to basics.