Businesses have more and more resources available to reinvent their business models.
For instance, artificial intelligence, internet-of-things, blockchain, augmented & virtual reality allow businesses to bring more value to their customers.
In a recent study* we assessed how digital assets may impact existing business models, and the creation of new ones through the development of new products and services. Our conclusion is that navigating in this fast-paced and complex ecosystem is a challenge for most organizations and digital assets pose opportunities for businesses to drive revenue growth in many ways.
Digital assets defined
Within Capgemini Consulting, we define digital assets as assets that add value through electronic interfaces. This is not just limited to hardware and software, but it’s the way they’re applied that makes it an asset. The image below shows the different assets per category to illustrate what kind of digital assets were assessed in our study.
How digital assets create value for your business
Using the Capgemini Benefits Logic® methodology, we were able to map the mechanism of how digital assets drive revenue growth. Our study shows that digital assets can help businesses to drive revenue growth in roughly three ways.
1) Increase number of revenue streams. Digital assets entail new business models and a new way of working that leads to new sources of revenue. Moreover, digital assets themselves contain troves of data: numbers, text, audio, video etc. By applying advanced data analytics to those datasets, businesses can gain precise and comprehensive insights in costumers and their behavior, including unrealized customer demands. Businesses can make better and faster decisions when it comes to developing new products and services thanks to data insights.
2) Increase number of customers and Customer Lifetime Value (CLV). Thanks to for example artificial intelligence, businesses can offer better and more personalized products and services to each customer at a faster pace. These technologies empower customers in such a way that making purchase decisions becomes effortless. More personalized products lead to faster purchase decisions and a better customer experience. A higher customer satisfaction rate, leads potentially to gaining new customers and increasing the retention rates of existing customers. Furthermore, digital assets could be a competitive advantage for businesses thus help businesses to sell a higher total volume, because customers return more often to spend. Monitoring Customer Lifetime Value provides the substantiation.
3) Optimize price offerings. Digital assets can also help creating more personalized products and services, which enable a better overall user experience. Moreover, online and offline marketing campaigns help creating better brand images which potentially may lead to an increase of prices of their offerings. Thanks to advanced data analytics tools, businesses can have the technical capabilities to optimize price offerings to each customer at specific time, maximizing revenue to the greatest extent.
Optimize your conversion funnel
In our study we enriched the traditional sales conversion funnel with the mechanisms from the Benefits Logic®. We found that digital assets typically add value in multiple steps of the conversion funnel. For example, in-store sensors and applications for online and offline experience integration can be used to help costumers explore options, but also enable bonding with brands. We identify both positive and negative reactions from costumers in our modified conversion funnel model. Positive reactions strengthen the loyalty loop, creating potential future value, while negative reactions provide valuable sources of feedback that businesses can use to improve their products and services.
The model is used to identify the potential of a digital asset in -at least- one step of a business specific sales process. By using a value-based approach, it’s possible to identify the right digital asset to build and implement, to unlock all the revenue potential in a business. After implementation the performance of the asset can be monitored to ensure the asset delivers and meets the revenue growth expectations.
*Study performed as an internship by Chao Bao and Kevin Tatetdagat under supervision of Moniek Nelissen. This article is a subtract of their final thesis for graduation in MBA, Nyenrode Business University and was published on LinkedIn.
Special thanks to Eva Lo – van Steenbergen for editing and advise.