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1. Business Models in the Age of the Customer Kristoﬀer Okkels, Business Development Director Briefing, March 1, 2016

2. Agenda © Creuna 1  Business models and the age of the customer 2  Optimise existing revenue streams 3  Reduce costs and improve eﬀiciency 4  Create new services and platforms 5  Sum-up, tools and recommendations

4. What defines a business model? © Creuna

5. According to the old guru… © Creuna Assumptions about what a company gets paid for. Peter F. Drucker, Harvard Business Review Harvard Business Review: The Theory of Business ” ”

6. Harvard Business Review A few of the most popular current models… Most of thesemodels have toomuch focus onthe revenue sideof things…

7. According to Osterwalder © Creuna http://businessmodelgeneration.com/

8. According to Osterwalder © Creuna http://businessmodelgeneration.com/ 1. Optimize existing revenue streams 2. Reduce costs and improve eﬀicency 3. Create new services and platforms

9. What defines the age of the customer? © Creuna

10. A quick history lesson © Creuna Forrester: Winning in the Age of the Customer Age of manufacturing Mass manufacturing makes industrial powerhouses successful 1900 Age of information Connected PC’s and value chains leads to improvement in information flows 1990 Age of distribution Global connections and transportations systems makes distribution key 1960 Age of the customer Empowered buyers are here and they demand a new level of customer obsession 2010

11. The age of the customer is the age of emerging excpectations © Creuna

12. Expectations are rising… © Creuna Uber Newsroom

13. …and know no industry boundaries © Creuna Interfaces Selection Price/Quality Service http://trenddriveninnovation.com/ Eﬀiciency

14. The age of the customer is also a golden age of technology © Creuna

15. Yearly patent applications Speed of development is increasing… 1,05 mio. 2,57 mio. 1995 2013 Trend-Driven Innovation

16. …and organisations can’t keep up © Creuna Chief Martec Yes,, ’Martec’s Law’is absolutelyunscientifical…

17. What are the implications of the age of the customer? © Creuna

18. All companies are in the line of fire... Production gets automated Technology gets out-dated Service gets virtualised Experiences get digitised © Creuna

19. …and the boundaries between products and services and the digital and physical are getting blurry. © Creuna

20. The ways of the old world © Creuna Forrester: How to Embrace New Digital Business Models Online insurance GPS navigation Honda Civic Repair Shop Product Service Digital Physical Auto Industry

21. The ways of the new world © Creuna Forrester: How to Embrace New Digital Business Models Model S app GPS navigation Model S Charging Station Product Service Digital Physical Tesla

22. Customer value trumps brand value © Creuna Harvard Business Review 25% 20% 15% 10% 5% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 % of total business value Customer Value Customer data, loyalty, share of wallet, etc. Brand Value Identity, trademarks, designs, issues, etc.

23. What’s the smart reaction to the development? © Creuna

24. 1.  Attract 2.  Acquire 3.  Retain 4.  Co-Create Turn the brand into an Ecosystem © Creuna 14 3 2 Customer Experience

25. Use the right technologies to create intelligent and consistent experiences and services… Turn the brand into an Ecosystem © Creuna Customer Experience Technology

26. ...and create a united organization focusing on unprecedented customer centricity. Turn the brand into an Ecosystem © Creuna Customer Experience Technology Organization

28. Monitoring and analysising behavior and consumption enables dynamic, flexible and individual pricing in virtually every industry. © Creuna

29. Use consumption data to obtain full price… © Creuna https://www.go-drive.com/

30. …to get the exactly right price... © Creuna https://www.metromile.com

31. …or to take the ‘optimal’ price © Creuna ”As customers near the end of their allotment and become more desparate, Telstra has fewer incentives to discount.” Forrester: How to Embrace New Digital Business Models

32. Let behavior data determine the prices © Creuna https://www.progressive.com/auto/snapshot/

33. Use location data to control supply (and price) © Creuna Uber-efterspørgsel i New York City “Prices go up to encourage more drivers to go online. The increase in price is proportionate to demand.” Uber Blog & Washington Post

34. Context is important for most products… © Creuna Ad Age

35. …and weather data is an easy asset to use © Creuna http://www.skymosity.com/

36. •  Using consumption data to influence the pricing •  Letting behavioral data define the customer price •  Using location data to control supply (and price) •  Thinking context into the pricing model Optimise existing revenue streams by… © Creuna

38. Digitisation can make people smarter and processes more eﬀicient - and done right it will also create better customer experiences. © Creuna

39. Make employees smarter… © Creuna Oracle Case Study 15% increased productivity and 40% fewer ’where is the guy’- calls

40. …or digitise the decision making completely © Creuna BBC Business , Future AG & Fast Company

41. Automate demanding tasks... © Creuna CNBC: Drone Company That Checks On Oil Safety...

42. ...get performance-data in real-time... © Creuna Cummins Engines

43. ...and optimise logistics on-the-go © Creuna To Increase Case Study

44. Empower the customer! © Creuna QZ: Ralph Laurens High Tech Fitting Room Customers tried on 6 times as many clothes Cross-selling was increased by 80%

45. •  Making employees smarter •  Digitising the counselling and decision making entirely •  Using new technologies for demanding jobs •  Collect and use performance data in real-time •  Giving customers more responsibility and control Reduce costs and improve eﬀiciency by… © Creuna

47. Collect and enrich data to create valuable services and meet customer behavior by experimenting with digital channels and formats. © Creuna

48. Use the easy access to new customers… © Creuna China Daily The US export of lobsters to China has increased from 15 to 675 mio. dkr. in 5 years.

51. …and generate revenue on their work © Creuna 1,7 billion dkr. in revenue in Q3 2015 Forrester: How to Embracew New Digital Business Models

53. …or be the basis for entirely new services https://www.vestas.com/ve stasonline/ Breakeven on a 2-digit million dkr.investment in 8 months

56. …but also if your product isn’t digital at all © Creuna Fast Company ”It represents (…) the merging of the $115 billion global skin-care market with the $223 billion consumer electronics industry.”

60. •  Taking advantage of the easy access to new customers •  Creating revenue on user-generated content •  Letting sensors redefine your product •  Building new services based on data •  Thinking in platforms rather than products •  Facilitating the market Create new services, platforms, and revenue streams by… © Creuna

64. 2. APPLY1. ANALYZE TREND CANVAS CONSUMER What new consumer needs, wants and expectations are created by the changes identiﬁed above? Where and how does this trend satisfy them? Which (new) customer groups could you apply this trend to? What would you have to change?How are other businesses applying this trend? Which deep consumer needs & desires does this trend address? Why is this trend emerging now? What’s changing? Shifts: Long-term, widespread macro changes Triggers: Recent, short-term changes or technologies Emerging Consumer Expectations TREND: Basic Needs Drivers of Change How and where could you apply this trend to your business? Innovation Potential Inspiration Who …and develop the business based on trends and behavior Trend Driven Innovation

65. Business development, customer experience and product development are close to being three sides of the same coin. Eﬀiciency is hygiene – emotions diﬀerentiate. Positive surprises increases revenue and customer preference.1 Mobile moments are key to identifying new behaviour and the main ingredient in most of the modern go-to-market strategies. The metrics for success should be considered: perhaps lifetime value and share of wallet are more important than revenue. Data is heavily underestimated in most companies. It belongs on the balance sheet together with all the other intangible assets. Finishing remarks © Creuna 1 2 3 1 = Forrester: Understanding the Impact of Emotion... 4 5

66. thanks for listening! creuna.dk kristoﬀer.okkels@creuna.dk in/okkels slideshare.net/creuna +45 22 49 83 39 Kristoﬀer Okkels, Business Development Director

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