The Olympic Games motto of “Citius, Altius, Fortius” — faster, higher, stronger — has new relevance for businesses today. No longer shielded by reputation or longevity of operations, companies in today’s customer-driven market face the imperative to meet customer requirements with value propositions that excite and fulfill.
Whether this entails flipping what it means to “own” clothes, take out a “loan” or have a policy cover committed to social impact, only those businesses that get what it means to put the customer at the heart of what they do have what it takes to stay ahead.
But before I delve deeper into each of these examples, let me say that the era of disruption that’s upon us is not merely the result of exponential technological advancement or the emergence of edgy startups. It’s instead the outcome of what I would call customer disgruntlement. When customers turn their backs on tried and tested products and experiences because they find alternatives that meet the same needs, they create the conditions for disruption.
As a seasoned, consumer-centric industry leader, I see this shift reflected in what my clients demand. Aware of how quickly consumers are shifting loyalties to the next best (i.e., disruptive) experience, we are seeing clients asking for increasingly iterative and robust products and services. This is in keeping with the growing customer focus sweeping across industries that’s compelling businesses to respond to market demand for products/services tailor-made to fulfill personalized, individual needs.
Although the shift is a significant and momentous one, I would say it’s also one that provides businesses with an exciting opportunity. Namely, to revisit their “normal” settings, gear up for consumer-driven, innovative thinking and look forward to onboarding new and varied customers.
Encouraged by the authority to express and broadcast their views on user experience, customers in today’s digital era increasingly incentivize the rise and fall of trends and product aspirations. Their reactions have a powerful impact on the marketplace because they are quick to shift their loyalty to somebody offering a better alternative that meets their needs.
Disrupting Clothing Retail One Closet At A Time
Take, for example, clothing retailer Gwynnie Bee, a recent entrant to the online retail space, which started out in 2011 offering plus-sized clothing rentals. The company offers customers the opportunity to try on as many styles as they like in exchange for a monthly subscription. By replacing the usual “fashion by purchase” model with fashion by subscription, or clothing as a subscription, the company postpones the commitment to purchase while whetting user appetite.
Customers get trendy clothing with unlimited access to a range of items for a one-time or monthly fee. They are also able to make decisions about the fit, color and style of items they may want to buy. This data helps the firm suggest pieces that best fit users’ style.
The Takeaway: What Gwynnie Bee does in combining two unusual elements in its business approach is what any organization working in any domain can do, which is offer its target audience the choice to rent or pay-by-use a product, experience or service. That married with the practice of mining each transaction with the help of advanced tech proves to yield rich insights into customer preference.
Transforming The Credit Market With Peer-To-Peer Lending
Similarly, another company operating in comparably disruptive ways by leveraging advanced technology and data insights is LendingClub. Founded in 2007 as one of the first peer-to-peer lending company in the U.S., LendingClub specializes in offering low, fixed-rate, online personal loans to those user segments having a hard time borrowing money from banks and traditional lenders. It does this by leveraging advanced technology to lower costs and directly connect screened borrowers with lenders. The loans that could be for a wide spectrum of requirements like refinancing a home, consolidating debt or financing major purchases are “matched” to lenders according to their risk appetite, investment portfolio objectives and preferred timelines.
Since its inception, LendingClub is said to have helped more than 1.5 million customers manage their finances better, lending a total of over $28 billion till date. This is because unlike banks, LendingClub can operate its online credit marketplace at lower costs by relying on fully automated loan approvals, online-only operations and a small team.
The Takeaway: One of the valuable lessons that can be learned from LendingClub’s phenomenal success is the importance it gives to unpacking established business models. It disrupts the idea of a bank-like organization needing to function in a brick-and-mortar setting. It “passes on” the savings to its borrowers and uses technology to match borrowers to investors to ensure that credit is made more affordable and investing more rewarding.
Flipping The Insurance Industry With Lemonade
Similar disruptions are also taking place in the closely related field of insurance — a domain typically associated with old, set ways. Consider, for example, insurance company Lemonade. Founded in 2015, the firm has been valued at more than $2 billion in a recently concluded funding round functions by sanctioning prospective homeowners and home renters’ insurance policies within 90 seconds for as little as $5 per month.
It provides its consumers with an easy-to-use app to manage policy changes, including changes to coverage limits and claims processing by cutting downtime spent in face-to-face interactions. Further, Lemonade distinguishes itself by offering a flat fee, expediting claims in the shortest possible time and giving customers residual premiums to charitable causes.
The Takeaway: What Lemonade proves is the power advanced tech offers in doing away with the need for lengthy, in-person interactions. It provides companies everywhere with the opportunity to consider deploying data analytics to expedite core business processes and encourages firms to stay mindful of the value-driven end-user that today’s millennial generation is known for.
It’s clear to me that as the marketplace undergoes continuous and rapid transformation, the onus is on us to develop bold new business propositions — business ideas that improve, refresh and revive customer experience in ways that keep them coming back for more.