Digitally Disruptive Business Models and Adapting to Them
There is no doubt that digital technologies are changing the way we perceive products and services. These technologies have already disrupted many industries and many other are on its radar. Digital has paved its way to touch every small aspect of businesses.
Business which takes place in the balanced economy, wherein supply meets demands through buyers and sellers, digital is changing the way these businesses operate. Uber, disrupted the market with on the go, on demand cab services, offering a product from an automobile company in the form of car as a service. Similarly Airbnb, Foodpanda, Zomato, and Facebook have changed the way traditionally businesses used to be.
Customers have more ways to reach out to the brands they love, thanks to mobility. They can now access data on the go from anywhere, thumbs up to cloud. This has enabled creating a mini eco system within an individual itself. This ecosystem when capitalized in free economy has led to many disruptive business models such as the subscription model, the aggregator model, hyper-personalized model, free model, on-demand model, freemium model, the ecosystem model, access/rental model, and many others. Let’s look at the top 4 of these models in detail.
Uber has the largest fleet of cabs in the world, AirBnB highest number of estate properties listed with them but none of them have an inventory of their own. Hence, they do not have to invest in maintenance nor do they bear any cost of fixed asset depreciation. This is the beauty of aggregator model. With this model you can bring all unorganized products/services under one umbrella and offer it as a service with due credits to the owner and capping on the directives. This model has channelized many standalone businesses to offer their products/services via a medium. Outsourcing partners are an inseparable part of the eco system. As you put all bits and pieces together to reach out to customers effectively with best-in-class responses to their queries. Outsourcing partners have tremendous opportunities here. Being one the most adopted business model today, it has given rise to new avenues of capability outsourcing by on-boarding various partners and BPS compliments it impeccably.
From clothes to cars, everything can be personalized. This is now used as a customer retention strategy to achieve E2E customer delight. If customer lifetime value (CLV) is expected to be high then hyper-personalization becomes an essential. This model is very successful as customers get utmost attention, which makes a psychological impact — creating a positive attitude towards the products and services and making a strong association with the brand. Local Motors, Amazon, and Mercedes have adopted this model. Mercedes ran an Instagram campaign on custom-made Mercedes at door step at a click, based on complete likeability study. Customer experience was at the core of this model. With this, outsourcing partners will have to perform at their best to deliver for these rocketing business models.
The ‘as-a-service’ model popularly known as XaaS is one of the most used model in the digital era. All the tangible assets such as homes, resorts, restaurants, cars, cabs, land, inventories, machineries, and equipment for a run-way fashion are now being offered as-a-service. Products are now being offered as services on pay per usage basis. This has opened up a plethora of opportunities for those with an inventory of these assets in their kitty. It has helped to innovate faster, drive revenue, and reduce costs. As-a-service can transform business services, enabling more agile, intelligent, and robust business operations as well as innovation that disrupts existing business processes and supports entirely new business models. Many businesses such as storage space as a service – Pcloud, We Transfer, Luxury Cars as a services, Avis, Designer apparels as service, Rent The Runway, and many others are tremendously thriving and creating a benchmark in their respective industries.
The subscription model is on the rise, thanks to internet. Across the world internet data is now being given abundantly, boosting adoption of this model further. In this model products/services are consumed on subscription basis. Users can consume services based on their subscription plan. Owing to this revolution SaaS companies or software vendors and their customers are now closely knit. As a subscription company, one needs to constantly listen, assess and improve and figure out how to surprise subscribers often. The subscription model will help businesses capitalize on the same product Y-o-Y than investing in new products. As per a report by Zorua the SaaS model industry will cross $100 Billion by 2020. Outsourcing partners will play an important role, as the value chain of most businesses will be highly burdened if they want to insource services.
These top 4 disruptive business models are driven by many digital factors. Let’s take a look at how they have been adopted by traditional businesses — adding a cutting edge and helping them be ahead of competition.
These disruptive business models are must have when it comes to:
- Enhancing customer experience
- Reduce go-to-market time
- Reduce cost
- Customer retention
To embrace these factors, businesses need to adopt disruptive technologies. Hence, Tech Mahindra offers CareXa, a customer management framework. CareXa is a modular framework that can be deployed across all customer interactions, from acquisition to in-life management to retention/win-back. One size fits all is a thing of past, today buyers want the flexibility to choose solutions that best solve their problems. With over 2 decades of experience, we bring together best practices and experiences from across engagements combined with continuous innovation, actionable insights and analytics, and best mix of people and processes. Together, these services will help enterprises navigate the increasingly digital landscape to increase revenue and ARPU, reduce operating expenses (OPEX) and churn, and increase brand advocacy.
CONSULTING: Process improvement, re-engineering, and advisory services
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OMNICHANNEL: Tools to help seamless experience across channels of customer interaction
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