Software is the business

Companies in every industry are adopting digital business models based on subscription services. When you’re selling streaming media, telecom, or software as a service, it’s all about renewals and churns. That’s equally true for companies that deploy digital business models to sell cars, apparel, ice cream, or anything else as a service. The new emphasis is on transforming everything you offer into a unified experience that meets customer demands even before they articulate them.

That requires transformation at the core of the business and a culture shift that instruments customer success throughout the organization and focuses on persistent customer relationships. And that means transitioning customer engagement from transactional to relational.

Pay attention to new metrics and workflows. One-off sales are a thing of the past. What matters now is how products are being adopted and integrated, how the relationship can be constantly renewed, and whether customers are succeeding by using your goods and services. Assess what workflows you have in place and whether they’re automatically connecting front-, middle-, and back-office functions.

At ServiceNow, we use a customer churn prediction app that deploys artificial intelligence and machine learning to predict when we’re at risk of losing a customer. Such a warning triggers a playbook—a workflow—that can be followed to address customer concerns directly.

Changing metrics in retail requires moving away from a focus on same-store sales measures, instead making e-commerce metrics key, including tracking daily or monthly active users, engagement scores, and retention rates. Other digital operating models can build customer loyalty by delivering exclusive, personalized experiences and benefits through loyalty or membership programs.

The passive website that you once used to tell customers about your company has gone the way of the fax machine. Today’s consumers don’t want to read a static sales brochure. Instead, they demand digital services: mobile apps, messaging, chatbots, and other multichannel tools that let them immediately tap into what your company offers.

As you empower customers, their interactions with these new tools create windows into behaviors, interactions, and relationships. Simply monitoring this wealth of data as it’s created is wasteful. Monitoring is evolving into observability, defined as the ability to understand the dynamic interactions with users and customers at every touchpoint.

This also paves the way for proactive customer service that can anticipate issues and put users in the driver’s seat to find solutions. Creating opportunities for solutions such as self-service can enhance the customer support experience and save money.

For example, a customer-facing instance of ServiceNow’s Now Platform allows fully automated resolution for more than 100,000 customer requests that previously had been handled manually. The change freed up $21 million annually that now can be reinvested in customer support operations.