There are mouth watering possibilities of ‘Next Service‘ to add on to business topline in today’s digitally connected world, (well also there are less but still opportunities in the physical world,) but only way to tap the opportunity to the fullest is to build concerted innovation & service/product design effort focusing on ‘Next Service‘, coupled with right marketing & digital muscle powers.
Well what is really a ‘Next Service‘? Traditional closest sibling is ‘horizontal integration’ on a product or service chain but it carries a different meaning in today’s market place. It means the next relevant thing (product or service) you can promote or offer to the same customer who has bought a primary product or service from you. Next service could as well trigger simply after customer interaction (without a purchase), for example you shared your location & status on Facebook, and FB immediately started monetizing that interaction using ‘Next Service’ philosophy (subject of this blog). The ‘Next Service‘ may be offered & consumed either during consumption process of the first service/product or anytime before or after the lifetime of the first product or service, depending on the context.
Today’s Platform Economy is bolstering this opportunity by a million times, simply because of ease of integration between platforms, crowd sourcing products & services, ease of access to sellers and buyers and above all feasibility of provisioning the ‘Next Service‘ to the customer with blink of an eye. From Financial services to ecommerce, from furniture manufacturers to home decors, hotel room aggregators to holiday planners, ‘Next Service‘ can be & must be cultivated. It is shaping up in the market place today but needs to happen at much faster pace, given the cut throat competition and very small of window of obsolescence. Sometime its really scary!!
I am digressing partially here but cant resist myself with this fascinating case study of taking revenue opportunity & market disruption for granted. Its story of a market leader & an early mover getting uprooted. Once, the homepage of internet, news, email of early 2000s….in 2002 they kissed (& missed) Google with a buy offer of $ 3 Billion, they were four times the size of Google then, in 2006 this company offered $850 million for Facebook which was shy by couple of hundred millions from actually pocketing the giant which now values $354 Billion…now this company just got itself (only the core businesses) sold at less than just $5 Billion…astonishing & shocking isn’t it…Yes ofcourse I am talking about Yahoo! These numbers are truly mind boggling and yes…if we don’t push ourselves towards ‘Next service’ on daily basis through disruptive thinking in order to create new revenue streams…we will go obsolete in no time. Do you have any clue on how many thousands of ‘Next Service‘ google runs today just inside it’s search engine business itself ?
Myself being a creativity/innovation instructor (by Dr. Debono Consulting) , practitioner & leader for more than a decade, I push myself all the time to create new ideas and I am excited to share with you my thoughts/ideas on ‘Next Service’.
Lets begin with classifying ‘Next Service’ so that we understand how to simplify the Innovation process & make it an industry agnostic replicable theory/approach.
- First the simplest of ‘Next Service’ that comes to our mind, that is bundling of Products/services, either they are used together or one complements other etc. In case of buying a product online, the platform uses recommender system (machine learning algorithm) which primarily are of two types. One is simply product based, if you are buying a 3d TV you could buy a pair of 3D glasses as well, pillows go with bed-sheets, a microsd card with a phone, pasta and pasta sauce, rice & dal (split pulses)…and so on…The same is true for physical retail stores, we buy associated products together with combo discounts etc. The ‘next service ‘ intelligence in this case is acting right at the time of sell of the core product or service. In this case the chain of associated products can be really long hence the potential revenue opportunity but it’s unlikely for customer to buy all at once despite recommender pushing those ideas. Propensity to buy the next product is more some time or few days later. another algorithm that works for online retail but can not for offline retail (as it need real time data crunching – market basket analysis) is recommending what other customers bought in bundle with the the core product, this data is already ready and churned at the time of buying, payment happen together. But at the core, we are just monetizing the data / the product customer chose to buy in the first place.
- Now let’s move to a scenario where next service or product is not related directly to each other but associated with the experience of the first product or service customer chose to buy. For example, you are booking movie tickets on your app, moment you chose the theater, Brands that sell in that shopping mall or nearby places to the theater based on buying patterns of the customer (machine learning algorithm again, they have learnt everything about your life…well I meant almost…through a naughty device called smartphone..), the movie ticket app will recommend brand or shop level discount coupons that you can use while at the mall or shop. This next service or product channel can be lethal and extremely powerful through analytics…the kind of depth it can get to may freak your mind…for example…based on the time of the movie that you chose the app may recommend breakfast lunch dinner coupons that could be redeemed in the mall….the gender of the buyer or age, religion, profession , health status…a next service list is really unlimited. Surprisingly the physical channel is also possible…give the customer associated vouchers at the theatre Box office counter. Other ideas that we can create from this movie example are also infinite….like this can take place in one physical shop for the nearby shops..again basically we are monetizing the ‘data’ that customer is either going to be present at a particular location at a particular time or is already present. Other than movie or shopping visits to a place …now we can stretch to other reasons of visits by customer and create new ideas to sell him the next service or product. … This is crazy right…?… Say a customer is going to an airport…you can obtain this monetizable data either from his etickets on email or may be customer is booking taxi ride to the airport…or more radical or our of the box would be the artifical engine ( neural network machine learning models) on your smartphone has processed your talks during the day and understood you are travelling to the airport…so it will start recommending the products you may want to buy at the airport….and yes intelligent selling that I already spoke about before….now forget airport..what about customer is going for a coffee or dropping kids to school or for that matter going to office…(Google now already knows my office address ..it tracks my parking lot & recommends me on my smartwatch estimated time to reach home as soon as I leave office) ….so potential of ‘next service’ is enormous….specially in a digitally connected ecosystem where all sellers are connected for each other and being good corporate citizens to promote each other in a mutually rewarding way..and this network of sellers connected to the big data of all buyers/ customers with individual behavior and demographics data..just imagine the power of this new currency called ‘data’…there exist million opportunities already today…it will only grow in geometric progression with network growing bigger and better.
- Now focusing on experience based next service, we can focus on how we can enhance the customer experience while using/consuming the first product or service. Say while watching a movie you need popcorn or coffee…while sitting in a taxi you may want a news paper or breakfast or snack or listen to a song or a movie or anything that can be push sold to you only in that window of time…which may not be relevant once the window is over. This is doable in the physical world …say while the customer is in Starbucks (alone) push him an insurance or wealth product or a great deal for a week end gateway with family (based on machine learning/recommender)…on his phone or by an physical agent, in this case pushing the next service offer while he/she is in the coffee shop is likely to be more rewarding as customer may have few minutes of spare time. While booking a hongkong trip offer him disneyland or a cruise trip or a travel pass…only relevant while the customer is in hongkong. Say an AirBnb room owner, also provides home cooked food for its guests or a babysitting service right in the room (owned by him so risk is very low)… woudn’t that be nice ? Say someone is booking an online classroom session either as a teacher or student…sell him a high quality headset or a speaker….(I bought mine immediately after I scheduled my first global online classroom as instructor for Simplilearn). Recently just two months back, BookMyShow (BMS), the largest movie ticketing app for India, has started ‘next service’ of providing original content in the form of movie reviews, trailers, news and features on film industry. BMS has invested a large amount of money to create additional revenue streams (Next Services) through machine learning/artificial intelligence.
- Another aspect of ‘Next Service’ innovation chain…we can ask what the customer needs before he can experience the first product bought…see the questions are changing…this time its not about how to make the first experience better…or location based push sell. This time the next service or product enables the customer before consumption of first product/service, the word ‘before’ & ‘enable’ are key words here. Like offer a taxi ride integrated with movie ticketing app…or google map has started providing Uber or OLA taxi service link when one is searching a destination on GMAP…or flight or railway tickets etc….now dwell on the same enablement idea for some more time…we can create more ideas from this same concept …transporting the customer is only one way think about it…what more ways we can enable a customer ? Say while booking a travel we can offer a short term loan or a visa service…or a paid travel consultancy on phone etc…and the list can go on…you do some more brainstorming on your own to create new ideas…!
- Lastly can we monetize the transaction post the customer has enjoyed edelweiss the product or service? Aim is to have a sustained revenue stream from the same customer, it can be done in million ways really…first one is feedback…movie…place…hotel…Airline..TV…and so on…then monetize or sell that customer feedback reviews and help build brands…TripAdvisor is greatest example…not only that we use machine learning on the feedback to generate more revenue in the future by pushing more relevant product or service to the customer…basically it helps the machine to ‘learn’ you better. What else can be monetized from the customer…any data outside the first service…say from smartphone ?…you can ask for direct customer referrals on return of some discounts or vouchers….goibibo app (India) gives you INR 50 each time anybody from your contact list booking a travel on the platform…this is next service to the next level where the target consumer is not same but you are monetizing the data procured from first client…not directly associated with the first transaction or product bought.
I would like to conclude this blog, by sharing the sweet & sweetest of next service. Sweet will be the ones that do not look to monetize alone the opportunity but adds value to the society at large…you want to surely sell more products and services to the customer but if the products itself are noble then it becomes very sweet. Like while booking a flight trip you donate a small amount to pure energy generation as a process to zeroise the net carbon footprint of your travel…or a donation to an NGO for a social cause etc…these are Next Service but adds incomparable value to mankind (money gathered from customer is not for your revenue).
But surely the the biggest & the best (sweetest for me) of next service in terms of size, amount of revenue, impact on planet earth, count of customers/lives impacted is : Tesla motor’s decision to buy (merge) SolarCity…at $ 3 Billion … Now why is it so sweet…we all know what Tesla makes…it makes revolutionary electric vehicles… which aims to build and run Tesla zero emission vehicles for entire human race worldwide, that too in real quick time frame. While it aims to build 500,000 mass market electric card model-3 annually (they will be driven across many countries outside USA by 2018)…other than truck loads of electronics semiconductors, microprocessors, sensors and carbon fibres…what ELON Musk will need is ‘one big heart’ for each one of these wonder machines…the power train which in this case is a long connected chain of lithium ion batteries…Elon Musk is also the founder of Solar city…it aims to convert US urban households to self sustaining solar powered entities (He will look beyond USA soon)…so essentially they make Solar panels & Powerwalls (storage & charging ports)…The common product between both the businesses is the powerwalls. Now think of the greatest potential of this Next Service….Tesla car owners will fit solar panels on their roof tops…connect the Powerwalls to Tesla cars to charge them….completely emission free clean energy for thousands household needs & personal transportation….and well truck loads of additional revenue for Tesla.
Did anybody on this planet before the great Elon think of a ‘Next Service’ like that while selling a vehicle to a customer ? Well whats your big ‘Next Service’ idea ? Do share….!
Looking forward to your debate/likes/dislikes/comments/feedbacks. Thanks for visiting my personal blog site & reading my blogs.