• April 17, 2024
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Required Reading: In a Competitive World, the Platform Makes the Difference

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In the never-ending power struggle between consumers and companies, it’s clear that consumers have won. And the only way for companies to beat the competition is to accept the uncomfortable truth that platforms are now essential.

In fact, Ted Moser, a senior partner at consulting firm Prophet, insists that in 5 to 10 years no major company will thrive without a platform that enables it to interact with customers on their “use” journey. In Winning Through Platforms: How to Succeed When Every Competitor Has One, Moser explores how companies like Disney, Apple, and Nike have embraced the changing use journey and offers tangible strategies for all businesses to do the same. CRM editor Leonard Klie explored this further with him.

CRMHow do you define a platform?

Moser: Many define platforms as business formats, such as software-as-a-service (Salesforce, Adobe), content portals (Netflix, Thompson Reuters), and ecosystem connectors (Uber, Instagram). Others define platforms as tech stack layers (IoT collection and data layer, analytics engine and code layer, user experience layer, etc.). These are all valid and helpful, but they focus on what qualifies as a platform rather than how to win.

A platform is a holistic business system. The benefit of this definition is that it contains dozens of levers that leaders can pull when competing in crowded markets to achieve structural advantage, accelerated growth, and superior organizational performance. This definition of platform is customer-centric. It’s built around the fact that every customer journey has two sides: the Choose journey and the Use journey.

A platform business system is one where your company can do four things:

  1. Observe a coalition of customers during each unique Use journey, achieved through a series of successful value-for-visibility propositions.
  2. Deliver interactive value to each customer coalition member as they use—providing both company-to-customer direct value and customer-to-customer facilitated value.
  3. Apply Use journey insights and relationship momentum to each customer’s next Choose journey for lifetime value growth.
  4. And finally, virally attract new customers to the brand promise and purpose, validated by the customer coalition’s attractiveness and advocacy.

Done right, a platform business system will create a virtuous cycle of accelerated growth.

Beyond growth acceleration, why do companies need platforms?

Platform business systems deliver three must-have strategic benefits:

  1. They renew business and brand relevance. A key factor in brand relevance is presence with the customer during Use (via platforms).
  2. They create investor confidence in your company’s structural advantage. Platform business systems drove more than double the rate of stock market value growth (vs. companies without them) between 2010-2022.
  3. They prepare your company for convergent competition. Traditional and nontraditional platform competitors will attack your customer base if they have a value-for-visibility proposition. You can only fight if you have a platform.

So why doesn’t every company have a platform business system?

Platform business systems require pervasive mental, business, and cultural shifts. Winning through Platforms: How to Succeed When Every Competitor Has One breaks down what it takes to become successful into 24 winning plays that management teams can implement step by step, in any order.

How should companies determine which platforms to employ?

First, decide the optimal role that one or more platforms can play to vitalize your business portfolio.

For example, Disney created two platforms (magic band/apps for its theme parks and Disney+ streaming media) that create new customer data synergies across its locations, media, and merchandise businesses.

Second, design each platform strategically. You begin by designing a customer coalition, creating a blend of users, sponsors, service providers, creatives, advertisers, and rule-makers. Design also involves deciding where you’ll invest for strategic advantage. It might be in one pivotal journey step of one pivotal coalition persona; it might be in a hero capability at the platform level that differentiates all offers.

Finally, craft offers that attract bottoms-up, top-down, and middle-out buyers to capture your total addressable market.

What customer-facing functionality should platforms be able to perform?

A platform should help customers travel better paths in life and work. It includes connecting customers to extended ecosystems that can do more for them than a single company can. This includes a ladder of better data deals where customers can experience escalating value-for-visibility propositions.

In addition, platforms should give customers broader powers than they‘ve ever had, making them feel and be superhuman. This includes providing super sentience, where digital sensing, thinking, and acting are integrated and AI-powered to create a living brand that your customer doesn’t want to live without. It includes giving customers a choice of reality at key moments through 3D-, augmented-, and virtual reality-supported worlds that help them make better decisions and enrich their experiences. Finally, it includes impact for good, where customers make a positive difference in the world when they support the company.

Once they put their platforms in place, how do companies ensure that they get used?

Platform business systems require top-down leadership because they connect everyone in the organization operationally.

Platforms especially require go-to-market collaboration. It’s typical to see a new executive brought in to oversee all go-to-market functions when transforming to platforms, given the new level of collaboration needed. Six cross-functional processes cover the entire customer platform journey as drivers of modern growth. These are often supported by a centralized growth operations function, where the CRM team would be found.

Two Choose journey processes make new customer acquisition more efficient—Brand-Demand Lead Engine and Lead-to-Sale Smoothing.

Three Use Journey processes energize customers to broaden their company relationship—Success to Momentum, In-Use Enrichment, and Catalytic Community.

The final process applies Use journey insights to the customer’s next Choose journey for Customer Renewal and Expansion.

Nike is a great example of these six processes at work. Nike invested heavily in four Use journey catalytic communities—Nike Experiences, Nike Run, Nike Train, and Nike SNKR—while acquiring innovative digital experiences along the Choose journey. In its early years, Nike’s “Just Do It” slogan communicated an individual challenge to a solitary jogger. Now “Just Do It” is also an invitation to join a platform-powered community. Nike’s full-journey engagement is a hard-edged discipline that yields significant business results. According to Nike CEO John Donahoe, Nike found that customers who engage with the company on two or more of its experience platforms have a lifetime value that’s four times higher than the baseline customer.

How can CRM leaders use Winning through Platforms?

Get to know the platform playbook and map your own CRM activities onto the platform-centric way of seeing the world we describe. Ask how your CRM teams, operating models, and tech stacks can grow their relevance in a platform-centric environment. Consider how you can bring your team’s expertise to new customer journey segments, even if your own data sets don’t reach those areas. And vigorously advocate for integrated customer data systems that enable the six demand workflows we described in the Demand Plays. It can make your team more critical to your company’s success than ever.

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