Planet of the Apps

Old ideas for managing new technology.

Your business is ticking along nicely. Out of left field a low-cost start-up zooms into your market and starts picking off customers. They’re small, so they can cherry-pick. Their cost base is low and they undercut you. They sell via an app that’s soooo easy to use and they outsource delivery to a logistics firm that gets the product to the customer quicker than you can.

Welcome to the digital challenge.

It is hard to think of an industry where this isn’t happening. For many managers it’s overwhelming. Wherever they look, everyone is talking digital delivery on mobile devices. The sheer breadth and scale of new technology can be threatening. It’s constantly changing. How do you cope?

Stay Underwhelmed

Not changing are the basic principles of running a business. Want to climb the digital hill?  Do it one step at a time.

First of all, there is no single technology that is going to give you an end-to-end answer to all your digital questions. So start with an old idea. Once known as the marketing funnel, today it’s called the decision journey. You probably know it but Iet’s run through it again.

The journey starts with the customer becoming aware of your product or service, then considering yours and comparing it to others. Next is the intention to buy, then the purchase, on to implementation, possibly followed by support services, then cementing the relationship and hopefully maintaining it with further transactions. Nine steps in all. Not all will apply.

Look at each of one and examine how you can use technology to facilitate, influence or execute any of them more effectively to build volume.

Make it a project.

Use a team - that's at least two of you - and role-play a start-up that is trying to disrupt your business. What could you do to snatch away part of your market using new technology? Identify the best improvement for each step and make it happen. You will not only end up with vastly improved business processes. You’ll also get digitized along the way.

Don’t overlook your strengths. That’s what newspapers did with classified ads for real estate, cars and jobs. Instead of using those strengths to develop online power in each, they stuck with print. Most lost all three to internet start-ups.

Use your own advantages, and that includes your own knowledge and business experience. Big data isn’t just something out in the digital ether. Dig into your own customer base. There’s plenty of data already there. Start targeting repeat business.

Don't stop at customers

Next, move on from customers and look right across your value chain. Start with your suppliers and examine each step along the way to delivering your product or service. That’s where the cost savings are.

Competitive advantage can comes from digital cost reduction. It boosts profit margin, some of which you may have to give away to capture and retain market share. Margin is just as important as volume. You will need more of it to compete in a digital world. 

Examine your decision journey and your value chain step by step. That’s not a new idea. It’s still about volume and margin, digital or othwerwise.