Organizations need to harness the information produced through their digital presence and use it as to leverage a better customer experience. That capability is what will eventually make or break B2C organizations.
THE SMB CHALLENGE!
While attending a meetup, I was listening to an IT leader from a retail organization, who was recounting a discussion he had with his counterparts in Sales and Marketing. The conversation was about the digital space and a brand-new application they had created for smart devices. They also discussed the attractive new website they had just rolled out. Everyone was excited because they had several app downloads and it appeared that people were using the app frequently. Site traffic was beginning to show traction. But after the excitement settled down, it appeared that sales had not increased as expected! In summary, it appeared that the app and the redesigned website had no Sales impact at all!
So, the Business Units began an investigation on why sales had not increased alongside application usage and site traffic. Was something wrong with the app or the web site? As with this example, this is a common dilemma for many organizations as companies that don't see themselves as technology firms (i.e. retail) are either willingly or forced to enter into the digital / mobile space. At least in some of the cases, this is due to a sudden realization that, they are living in an age of digital revolution and day-in-day-out disruptive technologies are emerging to create chaos and to formulate a new normal. These disruptions eventually lead to a fight for survival in the market place where large and few mid-cap companies will have the wherewithal to formulate and execute an approach for a fight for survival or even for market dominance.
Most of the time, competition in the digital space is against an unknown or intangible enemy. Failure to perform could mean a slow and painful death (can you name few retailers?) or a rapid demise (Circuit City). Experience shows that one of the major causes of failure was the inability to respond to threats quickly or the lack of agility in adapting to the changing market conditions (i.e. delayed entry into the digital market place and / or inability to engage customers in the digital market place). During the prominent days of brick and mortar stores, identifying and engaging the customers was easier because the accepted norms of engagement were during the "normal" defined business hours. In the digital age, though, customers are empowered to conduct a business transaction at any time of day and businesses are forced to change the rules of engagement to fit the needs of customers. This requires that the business remain open for 24 hours a day to meet customer needs. The technology that enabled the progression from a brick and mortar to personal computers to hand-held devices (smart devices) was a game changer and now almost all the B2C organizations are trying to engage and be relevant to the needs of their target customer base.
NOW THE QUESTION IS, HOW DO SMBS GET ENGAGED AND KEEP / GROW THEIR MARKET PRESENCE?
At the outset, the puzzle can be easily resolved by creating a digital presence with the development of an app or by the creation of a web presence. If a company invests in a web presence, they then takes on the challenge of collecting customer data (web logs, transactions) and employing that information for future decision-making. The opportunities are vast for companies that are able to combine customer data with in-house or third party data to create a richer data set about consumer behavior. This data can be mined and analyzed to understand the customers, their preferences, and other behavior patterns, when gathered correctly. This in turn will help to create a digital persona of the customers which is a gold mine for Marketing and Sales analytics. Social Media engagement data can also be added to the data set as several corporations have some type of "war room," where the social media is being monitored for any activities that affect them – either positively or negatively. Social Media data also provides a raw look into customer preferences and perspectives on company logos, which become highly valuable for Sales and Marketing teams hoping to create loyalty and influence purchase behavior.
CHALLENGES IN THE OPERATIONAL LANDSCAPE
Based on our experience in working with Small and Medium Businesses (SMB) organizations, most of the SMBs will have a diverse set of application systems supporting the business functionality. As the demand for functionality and performance increases, a new system will be put in place and often there will not be enough room for application consolidation or Enterprise Architecture Strategy. This will eventually lead to the myriad of applications that function within an organization. Adding digital / social media presence will increase the existing complexity for collecting and managing data or information within the organization. Due to the lack of a coherent and concise data management strategy, more time will be spent in scouting for data than analyzing it.
So, the first and foremost step while getting into the "Big Leagues" is getting all your data ducks in a row. We have worked with organizations where there are 1,000+ known databases and many unknown Access / Excel data stores that was used in daily operations and reporting. In situtations like this, a comprehensive information management strategy can act as a backbone for future innovation. Sometimes, you have enough internal knowledge and capability to create and execute a data-centric organizational strategy. However, do not hesitate to bring in external expertize as needed, who can also help with organizational changes needed to build and execute a successful data management program. What you need is not a bunch of executors, but seasoned veterans in the data space who can devise a custom strategy for your organization's specific needs and goals.
The new digital world produces a ton of data. These outputs can be structured, semi – structured or even unstructured. While the abundance of data is a good thing, it is seldom sufficient, in its raw form, to provide insights on their own. In almost all incidences, you would have to marry the digital data with in-house or third party data to enrich the data set and make it more useful. In our initial assessments before strategy engagements, we found the lack of a mature data management program slowed down or even ruptured the analytics based on digital data. Some of them tried to put a patch on another patch and limped along while others spent enough time to get the basics right and ran. Experience from the past shows that, at least for a good percent of organizations, digital analytics is like the blind men touching and feeling the elephant. They all touch and feel various parts (tusk, tail and legs) but not the whole.
We all agree that the digital age ushered in a new era of customer empowerment. That is exciting and rewarding for a service provider with the right set of capabilities. Let us be clear – there will be winners for those that gather and use data correctly. Building out a presence in the new digital space is not enough. Organizations need to harness the information produced through the digital presence and use it as leverage to provide better customer experience. That ability is what will eventually make or break B2C organizations.
To learn more about how SMBs are adopting Machine Learning & Artificial Intelligence, you may also read a colleague's blog here.