At Subscription Show 2021, Issac Sacolick, President of StarCIO and author on acceleration and transformation, shares his insights on how subscription businesses can accelerate growth and drive digital transportation.
Digital transformation is just one of the buzzwords circulating in the subscription industry these days, but what does it mean to actually achieve it? Issac Sacolick, President of StartCIO, took the main stage of Subscription Show 2021 to share the keys to achieving this change.
Four key focuses to transformation
Business owners in today’s market must realize they’re in a race. New competitors enter the market every day, offering new ways to buy content and to form entertainment in today’s business world. To stay relevant, business owners must adapt and always be racing their competitors.
“You really need to think about not what you’re delivering today and not what you’re delivering over the next couple of years, but look at three, five and 10-year horizons,” says Sacolick.
To create that roadmap, organizations need to start with four key focuses.
Customer acquisition and loyalty
As any business owner will attest, it’s hard to get customers to hand over their money. But once they’re signed up, subscribed and are in the business processes, Sacolick says, it’s crucial to develop their loyalty.
Netflix is a great example. The company moved from a strict subscription model that offered movies (first delivered to the front door and then via streaming) to a multi-media company that creates its own shows. These shows are not just great, but binge-worthy and many are winning major awards. Netflix listened to what their customers wanted and worked to retain them as subscribers.
This is a huge part of transformation ‒ recognizing where the business needs to go next. What’s driving the organization to better serve its customers? What do the customers want? What do they need? What is the customer looking for now given the circumstances they face in life?
Innovation and delivering value
Innovation in a vacuum isn’t going to generate income, as much as businesses wish otherwise. Innovation that delivers value to customers is what will accelerate transformation in a subscription business and help the business stay relevant.
Peloton is a great example of innovation that also delivers value, says Sacolick. They innovated already‒ using existing technologies like an exercise bike and exercise videos and bringing them together and creating a subscription model. As Peloton looks toward the future, they’re not resting on their laurels of offering live and on-demand spin classes, the bread and butter of their bottom line. Instead, they continue to release different types of workout and wellness videos that encourage customers to continue their subscriptions.
Machine learning and personalized experiences
Can companies learn enough to incentivize customers to buy new things from them every month using machine learning and creating customized offerings for customers? While many companies are working to incorporate it into their businesses, machine learning requires massive amounts of data to work well. Acquiring that data and making it work for the business looks like expanded offerings that will hopefully turn one-time and new customers into repeat customers.
Digital transformation or digital disruptions
How do companies transform and create disruptions in their industry? By acknowledging that what they do today needs to evolve and recognizing the consequences of moving too slowly. The pandemic was a great catalyst for inviting business owners to better understand what’s working, what’s not and what changes they can make that will allow them to pursue new opportunities while handling the challenges of running a business in today’s environment. (See Netflix above.)
What digital transformation is (and what it isn’t)
The technology available today will eventually become obsolete. The amount of work it takes to roll out new technologies and incorporate them into business processes can be tremendous. When these technologies become obsolete, it can be very painful for businesses to adjust and incorporate new technologies into their businesses.
“A big part of transformation is being able to take what you’re doing today and evolve it,” says Sacolick.
Use whatever business processes are in place now and find ways to evolve them. But, warns Sacolick, watch out for the pitfall of assessing business processes and simply replacing them with new technologies; this isn’t digital transformation. A transition and modernization of the company has occurred, which may result in a better experience and integration, but the core of the business is the same, which means transformation is lacking.
“The hard thing about transformation? You probably have to do multiple things at the same time. It’s not just one thing that you’re doing. You’re working on experiences, data, payments, changing the mindset and the culture of the people you’re working with,” says Sacolick.
And this is all being done while running the business in real-time. Imagine trying to troubleshoot the issues in a car engine while driving it down the road. Sacolick acknowledges this is not an easy process. But doing it effectively means continually accelerating and transforming with the times.
Technology companies themselves serve as a great example of this. They have not slowed down amidst all of the recent changes in their industry. Instead, they’ve figured out how to maximize a hybrid working environment; they continue to put out products, and they’re creating new competitors every day because they’re staying on top of trends.
When Sacolick talks about accelerating transformation, he means starting with the building blocks that are universal across industries:
- Analytics and reporting
- Data and technology
- Customer and employee experience
- Brand and marketing
When combined, these building blocks create an agile, collaborative culture. And while it may sound fantastic, it’s not easy to achieve. When one considers each of the main groups in the diagram below, it’s clear there are many other aspects that draw focus, resources and time away from the main building blocks themselves.
Depending on the industry, a company’s focus could be homed in on one of these main building blocks and optimizing in that area. While this is important, Sacolick points out it makes achieving the agile, collaborative culture very tricky to accomplish. Companies put their resources toward these building blocks because they have a specific goal in mind for each area: growth, experimentation, customer centricity or transformation. But creating a plan and sticking to it no matter what isn’t going to get businesses where they want to be.
“Our roadmap needs to be something that we’re continually experimenting with…a big part of transformation is not just being able to execute and plan. It’s figuring out what you’re going to do next. That’s what I mean by an agile, collaborative culture,” says Sacolick.
Transformation is not about taking what’s here today and using it better. It’s about looking at the business strategy through the lens of the organization’s technical capabilities and making changes to business operations and generating revenue.
“I’m going to share one secret with you: You cannot evolve the business just by taking costs out,” says Sacolick
Ultimately, the merits of cost savings don’t hold up against how an organization is going to generate revenue once a major change is made. It’s not just about customer experience, technology or analytics, but about the bottom line. And it’s about preventing disruption to that bottom line.
Digital transformation 2.0
When it comes to the new school of thought for digital transformation, Sacolick believes there are several key factors businesses must keep in mind.
First, part of transforming in this new age of running a business is being able to change and adapt based on evolving customer needs and experiences. As Ron Insana pointed out in his keynote for Subscription Show 2021, consumers are living in a post-war economy again. That means scarcity is driving consumer behavior which should be a factor for how businesses are meeting those needs.
Second, businesses must acknowledge circumstances in the global economy ‒ like supply chain issues ‒ and pivot. Given the lack of products and services available in the market, businesses must determine new ways to continue to provide their offerings. If they don’t, revenue disruption will occur.
Third, the workforce is transforming the way everyone does business. Hybrid working is now the norm and is expected by many job seekers returning to the workforce. In order to transform, companies must find ways to welcome new working conditions while still maintaining efficient and effective business operations.
Fourth, data and analytics are no longer something business owners can address through spreadsheets and manual processes. From company boards to consumers, integrated ecosystems that synthesize, analyze and offer suggestions based on the data collected are now the expectation. This is a key aspect to creating digital transformation in the present and beyond.
Fifth, in order to transform, businesses must take advantage of the technology now available in the market. Companies no longer have to do everything in-house; instead, they can easily find the tech that will support the growth and diversification of their company. If they don’t, their competitors will.
Finally, businesses must use security as a differentiator for why consumers should trust them. Security within a business and around consumers’ personal information can no longer take a back seat. This is affecting organizations around the world and is top of mind for customers now more than ever.
When it comes to creating digital transformation and accelerating growth, subscription business owners have a lot to consider and manage. But a few things are certain: first, staying in place will mean death to the bottom line; second, transformation requires more than just a few changes to business processes; third, accelerating growth means being willing to change, pivot and evolve to reflect the times.
