CRM Evolution 2016: Insight-Driven Business Models Are the Future of the Enterprise
WASHINGTON, D.C. — On day one of this year’s CRM Evolution conference, speakers stressed the importance of reconfiguring business operations to support continual growth, and that means gathering, and acting on, insights.
Ray Wang, principal analyst and CEO of Constellation Research, guided attendees through the advantages of using Big Data to glean insights that can lead to competitive business models.
Wang pointed out that, while technological advancements will lead to the generation of more data—and data is the “foundation” for creating insight-driven customer experiences—companies should be concerned with data only insofar as they can use it to their advantage. “We want to ask questions of our data, and take action on it,” Wang said. The key is to “find patterns so that we can figure out what sells, and what doesn’t sell, and then make decisions against that.”
To better paint the picture, Wang highlighted Symmons Industries; according to Wang, the manufacturer has conceived a model that is built entirely around its sensor-enabled shower heads, and a set of complementary services around monitoring them for damage. For one dollar per shower a month, the company can monitor each showerhead, Wang said. This means that a hotel with 800 rooms, for instance, can pay $800 dollars a month to have each of those heads monitored for potential failures. And while this may not seem significant, it actually represents a huge opportunity to Symmons, since the company has identified a crucial detail. “It turns out that for hotels, four out of the top ten net promoter score factors relate to showers: ‘The water’s too hot’; ‘it’s too cold’; ‘the pressure’s bad’; ‘it’s dripping.’” Wang said. “If you do something like that, you can replace all your competitors’ showers with your parts with a service contract; [and if] you’re monitoring everything for free, you can tell which part’s going to come down, you know the service histories on all the different parts, so you have an interesting model.’’
General Electric is another company of note, as it is doing advanced work in field service, Wang says. The company is able to predict the failure of a power line eight to ten days before it happens by analyzing data pertaining to temperatures, humidity, ground vibration, and product information, among other things.
Wang warned that if by 2020, 20 percent of a company’s insights are not driven in a similar manner, and they “don’t have an insights-driven business model,” like those of GE or Symmons, they’re “not going to be successful.”
Wang recommended that companies invest in systems that learn a customer’s behavior over time, and engage with them in ways that enable them to anticipate their desires. Companies must get as much information regarding their context as they can, by offering them value in return for that information.
While technologies are not currently ready to self-learn at a high level, companies should leverage the tools they have to work toward “mass personalization at scale.”
“This is not about multichannel, or omnichannel,” Wang added. “It’s about immersive experiences.” This means that customers must be empowered to create their own journeys, rather than follow prescribed paths.
“Once a company builds out [these] insight-driven platforms, they’ll have an easier time signing on partners who are willing to co-innovate and co-create with them,” Wang stressed. “They can build brand-new sets of experiences on top of what you’re doing, and that’s when [they will] get a lot of the advantage, a lot of the growth, and a lot of their multipliers.”
But for established companies, that doesn’t mean simply replacing old systems. “You don’t throw away the main frame,” Wang urged. “You abstract, orchestrate, pull from these systems” to build out the new ones, Wang said.
Robert Wollan, global managing director of advanced customer strategy at Accenture Strategy, closed the day out with similar advice concerning the “platform economy.” He focused attention on Philips Healthcare. "They wanted to make the most out of what they have by bringing together products from across the business—everything from MRI machines to clinical trials, and everything in between," Wollan said. "They've put all of those under one banner, and they also invited clinicians and others that handle medical research to learn together—so they’ve created a platform that allows them to exchange data with competitors or hospitals that don't use their products today."
When investing in technologies, Wollan suggested, “don’t fall in love with cool, fall in love with money”—in other words, strive to invest in technologies based on their promise of return on investment and potential for growth. Wollan advised figuring out your desired outcomes first, then deploying the technologies that will enable those outcomes. “If you start with the idea that ‘we have a lot of data, what can we do with it,’ that has never worked outside of blind luck.”
CRM Evolution 2014 Day Three: As Social Engagement Strategies Mature, New Challenges Arise
The sports industry uses social media to connect with fans during slow periods.
At CRM Evolution, Relevance and Incremental Improvement Are the Keys to Company Growth
Speakers on day one advised organizations to reach customers with relevant messages and build momentum with steady improvements to achieve consistent growth.
CRM Evolution 2015 Day Two: With New Technologies, Organizations Must Do Their Homework
Speakers recommend adequate prep before committing to costly tools, and investing in flexible solutions that will evolve over time.
Gartner Application Strategies Summit, Day One: Companies Must Embrace Digital Ecosystems
Speakers urge enterprise leaders to build technology platforms that are "digital, programmable, and smart."