How do you make money in the Digital Age? Become a Trusted Advisor.
In today’s digital world things are moving really fast. Competition and opportunities come from everywhere. Technology is dramatically changing the global business landscape. We have never seen a change of this scope and speed in human history.
Businesses know they have to adapt to this new reality. The only problem is how. Because it’s not just about taking all this technology and do things the same way as always but faster and cheaper. That would be to miss the point and just "conceive of the digital in terms of the limits of the previous landscape rather than the potentials of the new one”.
No, we need to shift from an Industrial Age Mindset to a Digital Age Mindset. This includes everything from reimagining how we collaborate, organize and lead, to where and how we learn, what kind of products and services we offer and how we create value for the customers and generate money for ourselves. Information is the world’s new natural resource and data and analytics are making the invisible visible at scale in real time. If you learn how to leverage from all this, you can find new ways of making money.
From a transaction view of the world to a relationship view of the world.
How do you make money in a digital age? Today most payments are made upfront. You buy a product or a service and then you use it. However, customers are people with different needs. While a product or a service can provide great value to one customer, it can be of less value to another. What if you could pay based on the value a product or service provides to you?
In a digital world you can start think about new ways of getting paid. For example, you can look at payment based on use. Depending on how many times or how frequent a product of service is being used, people will pay differently. Another way to get paid is by impact. As a customer, you don’t pay unless the product or service is creating value for you. The amount of money you pay will depend on how much value is created. With all real time data, it’s actually possible to follow the customers behaviours and access indicators for value.
You can also use data to add value to the customer instead of just using it to optimize how you target your customers or deliver and maintain a product or service more efficiently. If you look at how to improve your current service in a broader sense you can for example use data to help the customer understand what steps he or she could benefit from taking going forward. To provide advice and recommend what the options are that the customer should be pursuing given what’s most likely to happen. Over time, the customer may pay more for that kind of service than the product itself. And you will have an ongoing deep relationship with the customer that just gets deeper and deeper over time as more data and knowledge is added around the customer.
There is also another way you can evolve your business model where you connect your customers with third parties that can add value around the core products and services you are providing. Here you stop having a one-to-one relationship with your customer where it is only you – the vendor – who connects with the customer and all other parties are kept out of the loop. In this kind of model you move away from being a provider and instead see yourself as an orchestrator coordinating different resources to increase the overall value for the customer.
So in summary there are three different dimensions on evolution of business models you can take as a trusted advisor:
Set pricing or charging based on the impact or value received
Being prescriptive in terms of data to advice the customer
Connecting the customer to anyone anywhere who can add a value to that customer
All three models are still in the early stages of evolution. Trusted advisors have been around for a long time. However, in the old days it took a lot of time and effort to get to know an individual customer well enough to become one. In today’s digital world you can give advice using real time data at scale and become a trusted advisor to the mass market where you get to know an individual customer so deeply that you can become increasingly helpful to them in terms of suggesting things they haven’t even asked about based on their behaviours, the context they are acting in, their wishes, aspirations and capabilities. To help out on what things, people, platforms, communities, products or services they should connect with to get value. The more the customer lets you know about them, the better you will be able to help them as a trusted advisor. And the more other customers you serve, the better you can help an individual based on what you learn from others. This results in a scalable and individually adjusted business.