Optimize the digital business model

These are not rhetorical questions. For example, in a recent survey, 72% of customers said that if they could, they would switch some of their traditional channels to mobile apps. Considering that, companies must strengthen their digital business models, that is, how they digitally engage their customers to create value through mechanisms such as web pages and mobile devices.

If your company does not offer a good digital experience, many customers - and in particular younger ones - will turn to the competition or do more business with companies like Amazon.com, which offer good digital experiences, operate in adjacent sectors and start offering services similar to yours.

And to make the change even more difficult, a good digital business model tests the traditional analog model, which relies on places (such as bank branches, bookstores, or department stores) and people (such as sales teams or insurance agents). to satisfy the customer. A digital business model challenges the physical business model in three main areas: internal power, because whoever "owns" the customer experience often changes from product groups to the unit that manages the customer's multi-product experience; business processes, which must be rethought so that there are no fissures between channels; and customer data, which becomes a resource for the entire company, rather than being hidden in a single area.

Whether it is a company born on the Internet, a company with a long history or a local business that is just beginning to consider the best way to connect with customers on the Internet, your company needs to strengthen its digital business model. And there is much to lose if it is done wrong.

Just look at Netflix Inc., which dominated the DVD-by-mail rental business and had big interests in the streaming video business. Netflix took several missteps in its business model, such as separating mail delivery from digital and accompanying it with a sharp rise in prices, which upset many of its customers. The result was a 79% drop in its share price from July to November 2011, despite an increase in its revenue of 52%. During that period, the stock market stopped relying on Netflix's ability to manage its increasingly digitized business model. The acc ...