lunes, 25 de abril de 2011

A framework to understand what/how to deliver services/products to the new digital consumer

I was trying to find a good framework to analyze how a company should deliver their services/products on the new Web as it has been called by many. When doing this research I came across with a KPMG's paper titled "Emerging Business Models to help serve tomorrow's digital tribes".

In the paper they explain three key steps that most be followed by a company that is currently opearating or that is planning to target the new digital tribes. The concept of Digital Tribes is the name that has been giving to the new "Web Consumer" and the way they interact, and organize based on their interests.

I would like to pinpoint some of the things mentioned in the paper.

STEP I:  Understand your value proposition
 KPMG developed a set of 20 (20 C's) elements that enable individuals and companies to understand what they are really offering to their customers. Things like convenience, content, coverage, level of customization, interactivity, customer experience, consumer reviews, are some of the C's of their list.

STEP II: Understand your target audience
  They explain how the traditional way of segmenting the target customers, segments A-B-C-D, has lost validity. The main reasons why this has happened are related with the fact that people is grouping based on their interests, and not anymore based on their age, location, disposable salary. Due to tons of personal information is now currently in the web, ultra-targeting is now possible: the service/product we are delivering can be highly customized.

Regarding how the industry  is changing, and how to cope with it, Rio Careef was interviewed and mentioned two interest elements:
    - Evolving the way we make business: innovation in micro-transactions will bring new revenue models.
    - Surviving & creating the old "bariers to entry": alliances with the parties involved (network operators, service providers, distributors, manufacturers) are a smart way to keep up with the changes.

STEP III: Finding the right revenue model
 For this section I selected the key phrases that were introduced in the paper, and that in my opinion are a good summary of the elements mentioned in the paper.
  - Pay models make only sense when the content is truly unique, or compelling. When this is not the case, advertising and sponsorship should be use in order to deliver free content to customers.
  - One of the key issues is that people believe that as a principle content on the web should be available for free.
  - Content should not drive revenue model decisions.
  - Most if the times, a single revenue model is not enough. Hybrid systems  such as the ones used by Spotify and FT, seem to be in the right track by minimizing risk and creating tailored solutions for their customer base.

 Extracted from KPMG Convergence Equalizer (Digital Business): http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Emerging-business-models-digital-tribes.pdf

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