Digitalization has created new opportunities for value creation and added value: for example, by automating business processes, equipping existing products with new functions and services or improving the customer experience along all touchpoints.
New digital services
Thus, digitalization has created new markets and thus new revenue and business models. Innovations that use new technologies or business models or apply old technologies in new ways are emerging almost daily - and reshaping entire industries in the process.
New digital marketplaces and the shift in market access
Platforms now determine the exchange between market participants, for example. This has an impact on value creation: linear value chains are becoming branched value creation networks thanks to the platform.
One consequence of this is the network effect. The number of users of a platform has a direct impact on the added value that participants have from transactions on the platform. The greater the number of users, the greater this added value.
This also changes the mechanisms of market development. This is because the quality of a service or the price alone is no longer decisive. The digital market accesses that determine the respective market are also decisive.
Business models cannot be transferred one-to-one to digital markets. What is needed is the adaptation of existing goals, strategies and measures. In any case, the digital transformation of business processes is only the first step.
So how do you open up digital markets?
1. Develop a clear idea of your target customers
Your customers are the key to all business decisions. The more precisely you know your customers, the more precise the measures you can implement when developing the market.
For example, clarify this by asking yourself the following questions:
- What does a typical representative of my target group look like?
- How does he define success?
- What does he need to be successful?
- What does he need to achieve?
- What are his doubts and problems?
- Who does he have to answer to and what does he need to do so?
Put yourself in his shoes and make a list of what you would have to do if you were to do his job. Go through the entire customer journey, from the very first considerations to the long-term use of your offer, and derive relevant questions from this.
Be aware that your customer is not only paying a monetary price for your service, but also costs for skills and capacities that they need to maintain for the procurement and use of your service and that do not have much to do with their core competence.
2. Familiarize yourself with the market conditions and potential
Tapping into new markets with new offerings is associated with a high level of risk. Here too, knowledge is the basis for success.
Get a clear picture of the characteristics of your target market, such as
- the market growth,
- the quantity and quality of potential segments and customers,
- the market conditions, barriers and drivers,
- competitors and prices as well as
- influencing factors such as the legal framework and technological changes.
In addition, formulate a clear positioning that defines what you stand for and how you want to be perceived by your target group. On the one hand, this determines the place your company is aiming for in the competitive landscape. It also describes the entrepreneurial ambition with which you want to approach market development.
This is how you define the framework for action.
3. Don't differentiate between product and marketing when thinking about market development
We are used to thinking in terms of "product" and "marketing" when marketing products. But the branded goods industry is leading the way: The overall structure of a service is decisive.
And everything that is important to the customer contributes to the overall service. In addition to
- the product, for example
- simple availability,
- the type of interaction between company and customer,
- how exactly your service meets their needs,
- Your connection with other participants in his value network, through which you can relieve your customer of work,
and much more.
The decisive factor is the motivation behind a customer's thoughts and actions. It determines the relevance. In the case of technological solutions, for example, the availability of a digital service can be more important than the specific quality of a service or the price - a crucial insight when developing strategies for market development.
4. Develop a clear model of the customer experience
Since you now know your customers exactly, you know how to address your customers, how to convince them, how to build up your lead and how to close the deal.
But you also know what they need after the purchase, what counts when using your offer and how you won't lose them again. Derive a clear model of the intended customer experience from this. Do not base this on the processes that you have used up to now, but exclusively on what your customer needs and when.
The terms customer experience and customer journey are often only used by companies in the context of communication and sales.
This is too short-sighted.
Instead, think of the entirety of relevant services in all dimensions of your customer's "hero's journey".
5. Formulate concrete fields of action and goals along the customer experience
The customer experience model can be used to derive task blocks that build on each other and are relevant for customers. These can be summarized in concrete modules in a framework that clearly summarizes goals, measures and instructions for action for targeted customer development.
By implementing the measures described in the modules, you create targeted additional added value for your customers.
And the better you succeed in engaging and involving leads as comprehensively as possible, the higher the barrier to entry for your competitors.
Involve all departments involved in the development process to ensure consistency and acceptance of the respective instructions for action.
6. Use the framework consistently for market entry and market development
By developing the framework, you have laid the strategic foundations for targeted market development.
And the specific modules create the operational framework for the entire company. They serve as a planning basis for the use of resources and as a standard that enables comparable management of your services in all markets.
For example, you also know exactly which requirements sales partners need to meet and what infrastructure, content and training are relevant.
7. Define key performance indicators
In addition to the usual KPIs, you should also define key performance indicators with which you can measure the process efficiency of your framework and track the results of the individual modules.
This can be, for example, the ratio of Marketing Qualified Leads (MQLs) to Sales Qualified Leads (SQLs) in a certain time frame, measured by the number of whitepaper downloads, consulting inquiries or booked training courses, or the number of inquiries in Service Level 1, 2 or 3.
This tells you whether your plan is working. If not, adjust the modules.
8. Make the customer experience the focus of structures and processes
During development, don't worry about the existing structures and processes in areas such as sales, service or communication.
Rather, the tasks and the required competencies according to your customer experience model, which provides a clear framework for the what, how and when, are decisive.
The who and with whom results from this.
9. Form a business excellence team
It has proven to be a good idea to install a business excellence team for the development and implementation of the customer experience framework.
At least at the beginning, the team should report directly to the management and include representatives from all involved functional areas of the company to ensure participation and acceptance.
10. Develop scalable business model innovations
At this point, two insights will have crystallized:
- what specific motivations and needs drive your customers and
- to what extent tapping into a specific digital market is not just about technical innovation, but above all also about value creation through simplified procurement or use or by the fact that the target group operates in a digital value creation network.
You can use the information gained to develop measures for targeted marketing. Above all, however, it also opens up new opportunities: You can use the information to derive new digital revenue and business models.
There are few limits to your ambitions: With a high degree of service automation, you can also succeed in installing scalable digital business models with degressive use of resources.
