Aspects of digitization: Systemic Customer Centricity

Jan Sedlacek General Leave a Comment

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What is very unique to Digital innovation is that the underlying technology also enabled something alien for quite many traditional businesses: Systemic customer centricity. There is nothing romantic in a humanist kind of way in that, no: It’s very simply that technology turns customer intimacy into a competitive advantage and hence an edge of growth or margin. This is unprecedented in history because for the first time technology makes customer intimacy scaleable.

Vice versa, the lack of it has become a death sentence for a business (most notably in the form of bad reviews with better scoring competitors just a click away).

There is a very direct consequence from this for the way we manage digital business: Traditional metrics such as cost or revenue ratios don’t make sense for growing digital models, at all. The only meaningful financial perspective here is the unit economics view: All that counts is how much you pay for a new user and how much money that user will generate over his lifetime with your business. Hence, there is an inherent financial incentive to make customers happy in order to loyalize them, e.g. through good value-for-money, superior service, e.g., which really is hard-wired into every truly digital model.

It is not easy to achieve though for established organizations: Every organization struggles with being and remaining close to the customer. You can only get there by having crystal clear and coherent priorities from the top management, which start with a thoroughly customer oriented long term vision.

Examples: Customer focused vision, ongoing obsession with customer input, systems that prompt every customer for feedback, live customer feedback displays on internal platforms or in the offices, Net Promoter Score as part of management compensation.

Read more about other aspects of digitization in our comprehensive DIGITIZATION FRAMEWORK.

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