R "Ray" Wang
R "Ray" Wang
Book Summary: Lesson 2 From Disrupting Digital Business - Keep Brand Promises In An Attention Economy
Get All 10 Lessons Learned From Disrupting Digital Business
As with the beginning of every revolution, those in the midst of it can feel it, sense it, and realize that something big is happening. Yet it’s hard to quantify the shift. The data isn’t clear. It’s hard to measure. Pace of change is accelerating. Old rules seem not to apply.
Sometimes when you are in the thick of it, it's hard to describe what's happening. In the case of digital business, these models have progressed over the past 20 years. However, non-traditional competitors have each exploited a few patterns with massive success. However, as the models evolved, winners realize there are more than a handful of patterns.
Lesson 1 - Transform Business Models And Engagement
Lesson 2 - Keep The Brand Promise
Lesson 3 - Sell The Smallest Unit You Can
Lesson 4 - Know That Data Is The Foundation Of Digital Business
Lesson 5 - Build For Insight Streams
Lesson 6 - Win With Network Economies
Lesson 7 - Humanize Digital With Digital Artisans
Lesson 8 - Democratize Distribution With P2P Networks
Lesson 9 - Deliver Intention Driven, Mass Personalization At Scale
Lesson 10 - Segment by Digital Proficiency Not Age
In fact, the impact is significant and now quantifiable with 52% of the Fortune 500 gone since 2000 and the average age of the S&P 500 company in 1960 is down from 60 years to a little more than 12 projected in 2020. That is a 500% compression that has changed the market landscape forever in almost every industry.
Over the course of the next 10 weeks, I'll be sharing one lesson per week. For traditional businesses to succeed, they will have to apply all 10 lessons from Disrupting Digital Business in order to not only survive, but also relearn how to thrive.
We Move From Selling Products And Services To Keeping Brand Promises
Have you noticed that products companies no longer just sell products? In many cases they are willing to trade off product margins for services revenue. Take the mobile industry, we often see phones given away for free for a commitment to 2 to 3 year annual contracts. Well, that's just the beginning. Services companies are giving way services for experiences. Access to free services often trigger additional offers. The freemium to premium conversion is an example of how this works. If you want to access more advance features or use a service more often you then pay for a premium offering.
So where does this all go? Experience based companies are now giving away experiences for business outcomes. In the medical imaging equipment industry, they started out by selling an imaging machine for $1M US dollars. Then they used financing plans to drive additional revenue and lower the capital outlays. From there they sold support and service packages. And after 5 to 7 years, they would convince customers to upgrade. Now the metric in the medical imaging equipment industry comes down to revenue per patient scan per day. The business model depends on how many profitable patients can be sent through the machine each day. The experience shifts to a business outcome of up time. So the sales model shifts as well. Now you can get the machine for an 80% up time guarantee for $3M US dollars or if you want 95% up time, that will cost $4.5M US dollars. As you can see this is about optimizing business models. Once this happens, the manufacturer wants to put sensors and analytics on every device for remote monitoring. By predicting when a part will fail, or when to send a tech, the manufacture reduces their risk in meeting their promise to deliver on up time. Future business models can come from comparing machine performance and selling the insights, benchmarking data, and consulting.
Now, one more shift - business model companies are giving away their business models and focusing on brand promise. Disney is a great example of this. Whether you watch a movie, enjoy a theme park, participate in a cruise, or even retire in a Disney retirement community, you know it's going to be more expensive. You know you'll have a controlled experience where Disney tells you where to go, what to do, when to do it. But most folks are happy with the outcome as they look to Disney to put together a high quality experience. The expect it to be wholesome and family oriented and they are willing to pay for it.
But what Disney is doing is it's not necessarily competing with another theme park, nor a movie studio, nor a cruise company. What Disney is competing for is not just a business model. In fact, you could choose to read another book, have dinner at another restaurant, watch a live musical act, or go to sleep. In this attention economy, Disney is competing for your time. Once you realize that we live in an attention economy, you realize that the goal is to captures someone's time or reduces the time to get something done. The battle for time is paramount in delivering a brand promise.
Homework
Now for this week, think about how you shift from selling products and services to delivering on experiences and outcomes. This is not an easy exercise. But in order to get to your brand promise, you'll also have to ask yourself:
- How do you grab a customer's attention?
- How can you reduce the time it takes to get something done?
- What does your brand ultimately stand for?
When you have thought through this lesson, we'll be ready to apply the business model shift conversation with the attention economy as we get to what we are selling.
The Complete 10 Lessons Learned From Disrupting Digital Business
For those attending the full keynotes and book tours, you'll get the complete session and in many cases a copied of a signed booked. For those following virtually, I've provided the slimmed down slide share deck for your use.
You now have the 10 lessons learned to disrupt digital business in your hands. You can take this information and change the world in front of you or choose to sit on the knowledge as the world passes you by and digital darwinism consumes your organization.
I trust you will do the right thing. And when you want some company, come join us as a client at Constellation Research where we're not afraid of the future and the art of the possible.
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- Developing your digital business strategy
- Connecting with other pioneers
- Sharing best practices
- Vendor selection
- Implementation partner selection
- Providing contract negotiations and software licensing support
- Demystifying software licensing
Resources
- Event Report: Inside The Apple #SpringForward Event
- Event Report: Inside the #SXSW2015 Phenom – Meerkat
- Personal Log: Our Alliance With Digital Clarity Group
- Research Report: Enterprise Healthcare Management (EHM) – Healthcare Meets Analytics
- News Analysis: Rumors On Apple’s Foray Into Cars “Project Titan”
- News Analysis: Inside the First Industry-Specific Mobile Apps by the IBM MobileFirst for Apple iOS Partnership
- News Analysis: Going Deeper Into The Apple And IBM New Business Model Alliance
- Quips: Digital Transformation – Defining The Fundamental Elements For Digital CXOs
- Personal Log: Coming soon! Disrupting Digital Business – The Book
- News Analysis: Adobe EchoSign’s Electronic Signatures Goes 100% Mobile
- Monday’s Musings: Who Gets To Be A Chief Digital Officer?
- Monday’s Musings: The Seven Rules For Digital Business And Digital Transformation
- Tuesday’s Tip: Five Steps To Starting Your Digital Transformation Initiative
- Monday’s Musings: What Organizations Want From Mobile
- Research Summary: Economic Trends Exacerbate Digital Business Disruption And Digital Transformation (The Futurist Framework Part 3)
- Research Summary: Five Societal Shifts Showcase The Digital Divide Ahead (The Futurist Framework Part 2)
- Research Summary: Sneak Peaks From Constellation’s Futurist Framework And 2014 Outlook On Digital Disruption
- Research Report: Digital ARTISANs – The Seven Building Blocks Behind Building A Digital Business DNA
- Research Summary: Five Societal Shifts Showcase The Digital Divide Ahead (The Futurist Framework Part 2)
- Research Summary: Next Generation CIOs Aspire To Focus More On Innovation And The Chief Digital Officer Role
- Trends: [VIDEO] The Digital Business Disruption Ahead Preview – NASSCOM India Leadership Forum (#NASSCOM_ILF)
- News Analysis: New #IBMWatson Business Group Heralds The Commercialization Of Cognitive Computing. Ready For Augmented Humanity?
- Harvard Business Review: What a Big Data Business Model Looks Like
- Monday’s Musings: How The Five Consumer Tech Macro Pillars Influence Enterprise Software Innovation
- Tuesday’s Tip: Understand The Five Generation Of Digital Workers And Customers
- Monday’s Musings: The Chief Digital Officer In The Age Of Digital Business
- Slide Share: The CMO vs CIO – Pathways To Collaboration
- Event Report: CRM Evolution 2013 – Seven Trends In The Return To Digital Business And Customer Centricity
- News Analysis: Sitecore Acquires Commerce Server In Quest Towards Customer Experience Management
- News Analysis: Salesforce 1 Signals Support For Digital Business at #DF13
- Research Summary And Speaker Notes: The Identity Manifesto – Why Identity Is At The Heart of Digital Business
Reprints
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