With data, automation, and cloud computing threatening to dismantle legacy operating models, long-standing companies will need to make massive changes to stay afloat. Following in the footsteps of the Software as a Service (SaaS) model, companies like Airbnb and Uber are transforming "traditionally localized services" into industries that are now managed by cloud vendors and various Application Service Providers (ASPs).
It's time for legacy companies to do the same for their own industries -- before a new upstart beats them to it.
For example, in the past, travelers looking for a place to stay were essentially obligated to choose from a selection of local hotels and motels. Airbnb entered the picture in 2008, and hotel juggernauts felt the impact. In fact, HVS has estimated that hotels are losing around $450 million in direct revenue each year to their startup competitor.
Similarly, Uber and Lyft disrupted the transportation industry by making it easier than ever to find a ride to wherever riders are going. In 2016, taxi company Yellow Cab filed for bankruptcy, citing the ride-sharing services as part of the reason for its financial problems. While startups are offering transportation as a service and managing everything from the cloud (or, in Uber's and Lyft's case, an app), traditional businesses are struggling to keep up with the times.
With even large, established companies seeing revenues fall as a result of startups taking advantage of new technology, it's more important than ever that savvy business owners start looking into whether the "as a service" model could be applied to their own industries. To apply this model to your company, keep these pointers in mind:
1. Move Your Service to the Cloud
Consider Adobe and Microsoft, two companies that used to pride themselves on their brick-and-mortar offerings. For a few hundred dollars, customers could buy complete software packages. The problem was that every time a software update was released, customers had to buy a new version.
However, within the past few years, both Adobe and Microsoft have moved their services to the cloud. This allows customers to pay monthly for services, save their documents, and access their work from any place with internet access. It's a smart move, considering the needs of the new, mobile, constantly connected generation.
2. Find Opportunities for Consistent Engagement
On Twitter, you can be witty like Wendy's or observant like JetBlue. You can have real-time ratings like Uber or have a $1 sandwich day like Jimmy John's. No matter which path you choose to take, engaging with your customers and letting them feel like they're a part of your brand is critical to success.
Social media is a great route for this. Consider, for instance, the Lay's "Do Us a Flavor" campaign that employed the help of its audience to find new flavors for its chips. The winner was awarded $1 million, which sweetened the deal and encouraged more customers to get involved in the creative process. By engaging with its audience, Lay's not only discovered a new potato chip flavor, but it also gained new fans and followers in the process.
3. Use Engagement to Update and Improve Your Product
Small, continuous updates can be made based on the customer feedback you receive, and that feedback can even lead to new ideas for your company. Take the Apple Beta Software Program, for example, which allows Apple users to download the beta version of the upcoming Apple software update.
A feedback app is then installed on the user's device, which allows the user to report bugs, discover problems that need to be fixed, and note improvements made from the previous software version. This allows Apple to determine the best version of the software update to launch, which in turn improves customer satisfaction.
4. Examine the Inefficiencies in Your Industry
With the advent of social media, it's easier than ever for a company to listen to its audience and adapt accordingly. In an age when customer experience is so critical, longtime customer experience company TeleTech dared to ask, "Why not customer engagement as a service?"
TeleTech effectively changed its own business model to offer something that every company needs to excel today -- effective customer engagement -- through its new "as a service" platform, Humanify.
Kyle Priest, chief strategy and marketing officer at TeleTech, explains that "listening, understanding, and adapting to a customer's need in the moment, based on context plus cognitive capabilities, enables transformative experiences and interactions, making customer engagement a vital imperative for all companies."
As technology moves forward, even long-established companies need to adapt in order to survive. Evaluating the critical aspects of a legacy industry (like customer service) and examining client feedback may provide opportunities to adopt an "as a service" model in your own industry as well.