Today, to conquer the digital world companies have started thinking beyond just setting up a Facebook page. They envision an entire ecosystem for their business through their business models. This can be achieved only by breaking the puzzle into its tiny individual pieces, and then carrying those pieces outside the box in which you currently do business (keep walking till the point where you don’t see the box). Force fitting the digital world into the framework of existing business might prove to be disastrous. Success requires a change in perspective and mindset.
Every time I indulge myself in catching up with the latest happenings in the digital world I come across a new business model. From the Uberization of Finance to Gamification of “changing the world” (Google: Evoke by The World Bank), there are a few commonalities in the structure of these models. The idea here is to delineate these commonalities of successful business models so that it can be applied in different situations/industries.
#1 Unbundling of services aka Pay-as-you-go service.
Increasingly people are starting to shell out money only for the services that they are currently receiving. It is an interesting dichotomy where, marketeers harp on about brand loyalty and long term commitment, while the customers move away and into a commitment-phobic space. Pay-as-you-drive cars are an example. The automotive industry is already wrestling with a number of variables such as after-market, service, spare parts, finance, etc. As cities and homes become more connected, more services are going to be added to this list. Example: Parking as a service. So it is definitely time to get chummy with the CRM team.
One afternoon, as I was lazily flipping through TV channels (the WiFi wasn’t working), I came across this company called Kickstarter. Kickstarter is a massive crowdfunding platform that helps creators of unique products/music albums/films to fund their endeavours. Ventures like this are a clear testament to the consumer’s inclination to move towards a sharing economy.
Recognising the empowerment of the average consumer will eventually help one make money on any given digital day. The real menace that looms over every traditional CXO’s sitting in their cosy couches is that, one fine day someone funded by Kickstarter is going to come in between them and their consumer. And soon enough they are tables are going to turn. Whether it is money or hotel inventory, uberization/sharing economy, whatever you want to call it, it is happening. One can only hope that this would help to clog the holes and eradicate inefficiencies in the system.
#3 One-to-one marketing for everyone aka Mass-customisation.
The traditional definition for Mass Customisation states that it is the process of personalising products & services while keeping costs low. Technology is quickly catching up to make this a reality with respect to product-based brands. It is happening at a much faster pace in the service industry where physical assets are not a requirement. Today go to the customer with a bouquet of services and they pick and choose based on their requirement. If you are every caught quoting Ford about his offering of black cars, you are finished.
Apart from using the above mentioned components, new needs and requirements keep cropping up. To state an example, Online insurance for an individual’s data for example is something that would have been laughed at a year ago. But in a connected world where data about your health is being uploaded on the cloud every second, this might become the basic safety need that Maslow was talking about. It is imperative that these new requirements are also weaved into your business models.
The best of business models ensure that all strategies and efforts converge and sing together like a warm summer’s day in a Disney movie – easier said than done right?
- Uberization: Using simple technology to match supply and demand. In the case of Uber, it used the smartphone to take the taxi-drivers to customers.
- Sharing Economy: It is when people pool in their resources in a community to benefit from the transaction
- Mass-customisation: is making sure that the individual customer’s needs are satisfied efficiently at an optimal cost